TVA’s New Watts Bar Nuclear Unit Moves Ahead

On April 26^th, the Board of Directors of the Tennessee Valley Authority approved the continuation of construction of a second unit at the power provider’s Watts Bar Nuclear Plant. The project, originally approved by the Board in 2007, has experienced construction challenges that will delay its completion from a target date of 2013 until December of 2015. When complete, the new nuclear unit will put as much as 1,100 MW on the grid.

TVA officials told PACE that it became evident about nine months ago that the initial 2007 estimates on cost and time requirements for Watts Bar Unit 2 needed recalibrating. Not only were logistical construction issues disrupting the installment of the new nuclear unit [the latest unit is being installed next to an operating nuclear reactor], but initial cost estimates were also proving unreliable. In response, TVA leadership called on two independent groups to provide new estimates for the completion of Watts Bar, resulting in additional estimated costs somewhere between $1.5 billion and $2 billion. The new total cost of Watts Bar Unit 2 is expected to be about $4.2 billion.

TVA Chairman William Sansom put it bluntly in a written statement, “No one likes to miss the mark and that is what happened at Watts Bar Unit 2. We now know the original estimates in 2007 were incomplete and the execution was inadequate. I know; I was there.”

While construction delays and cost overruns are never welcome, there are some reasons to feel good about the developments at Watts Bar. First, the new unit will be among the first in the nation to come online since the Fukushima incident in Japan. The current delays mean that engineers and regulators have additional time to incorporate lessons from that disaster and ensure that best practices in nuclear unit construction are being utilized. Second, the delays will present no danger to TVA’s power supply, as demand for electricity has remained relatively stable in the current economic condition. The 1,100 MW provided by Watts Bar Unit 2 will be needed more in coming years than they are now. Finally, as we understand it, the cost overruns are likely to have little to no impact on power rates due to long-term financing of the additional costs.

Even with the additional costs, the truth is that Watts Bar Unit 2 will remain one of the most highly productive, least expensive power options for TVA planners when it comes online. That’s because nuclear plants, like coal and other fossil technology plants, are capable of running nearly all of the time and generating close to their nameplate capacity with little exception. Rain or shine. Day and night. It’s the kind of steady, on-demand power production that other competing energy sources can’t provide at any price. And as soon as the fuel is loaded at Watts Bar Unit 2, Bellefonte Nuclear Plant will begin its approved completion, eventually adding another 1,260 MW of nameplate capacity.

On May 5^th, Japan shut down the last of its fifty nuclear reactors. Germany is following the same path. PACE believes that taking energy options off of the table makes our nation less able to pursue the future it wants. For that reason, we support the TVA Board’s decision in the case of Watts Bar Unit 2 and look forward to the project’s completion.