If the Tennessee Valley Authority (TVA) decides to develop a nuclear reactor at the Bellefonte site it will cost far more to build than TVA’s completion of the unfinished Watts Bar unit while both nuclear options cost more to construct than natural gas generation.
TVA President and CEO Bill Johnson told lawmakers from Tennessee recently that it currently expects to complete the roughly 1,200-MW Watts Bar 2 in Tennessee in FY 2016 at a construction cost of $5bn including allowance for funds used during construction (AFUDC). The Watts Bar 2 construction cost without AFUDC is $4.2 bn. As a federal utility, TVA uses a federal fiscal year that runs from Oct. 1 through Sept. 30.
The spending information was among the data contained in slides that Johnson presented during a Sept. 13 presentation he made during a panel discussion at the Howard Baker Center for Public Policy at the University of Tennessee in Knoxville. Both of Tennessee’s Republic U.S. Senators, Lamar Alexander and Bob Corker, were in attendance, said a TVA spokesperson. Rep. John Duncan, Jr. (R-Knoxville) was also on hand for the discussion.
“This roundtable is meant to discuss the focus of TVA, which is about jobs and family incomes and improving the lives of people in the Tennessee Valley’s seven states – especially in Tennessee, which nearly 70 percent of the families that TVA serves call home,” Alexander said in a news release.
The current Watts Bar 2 construction figures are far larger than TVA first envisioned after announcing plans to complete the nuclear reactor in 2007.
If TVA is to build a commercial reactor at the Bellefonte nuclear site that could go online in FY 2021, TVA currently assumes it would have a construction cost of $8.1bn with AFUDC.
TVA has not decided whether it will go ahead with the much-discussed Bellefonte project so 2021 is not an expected schedule, the utility has said. Because of budget austerity, TVA has said it is facing ‘hard decisions’ at the Bellefonte site in Alabama.
By comparison, TVA also expects it can build a new combined-cycle natural gas power plant in FY 2021 that would only cost $1.2bn with AFUDC.
The slides in Johnson’s presentation also indicate that TVA expects to spend $217m on generic coal ash or Kingston coal ash cleanup-related expenses in FY 2014.
In FY 2013, TVA got 41% of its energy from coal; 31% from nuclear; 12% from hydro and 7% from natural gas. The rest came from either purchased power (8%) or renewables (1%).
In FY 2023, the breakdown would look like this if Bellefonte is not built: Nuclear 41%; coal 29%; hydro 13%; gas 11; purchases 5% and renewables 1%.
If Bellefonte is built, nuclear would account for 46% in FY 2023; coal 27%; hydro 13%; gas 9%; purchases 4% and renewables 1%.
The electric revenue trend for TVA has not been good in the past couple of years. After earning $11.7bn of electric revenue in FY 2011 the figure has been declining and is expected to hit $10.3bn in FY 2014.