Power company plans $6 billion solar, battery investment

On Tuesday, power provider Duke Energy Florida announced a settlement with the state’s public service commission (PSC) to cease plans to build a nuclear plant in western Florida. The utility instead intends to invest $6 billion in solar panels, grid-tied batteries, grid modernization projects, and electric vehicle charging areas.
The new plan involves the installation of 700MW of solar capacity over four years in the western Florida area.
There’s excitement from the solar industry, but the announcement is more bad news for the nuclear industry. Earlier this year, nuclear reactor company Westinghouse declared bankruptcy as construction of its new AP1000 reactors suffered from contractor issues and a stringent regulatory environment.
Two plants whose construction was already underway—the Summer plant in South Carolina and the Vogtle plant in Georgia—found their futures in question immediately.
At the moment, Summer’s owners are considering abandoning the plant, and Vogtle’s owners are weighing whether they will do the same or attempt to salvage the project.
Duke Energy Florida hadn’t started building the Levy nuclear plant, but it did have plans to order two AP1000 reactors from Westinghouse. Now that Westinghouse company is in dire financial straits, the Florida utility decided that its money is better spent elsewhere.
Just last week, Duke told its PSC that it would have to increase rates by more than eight percent due to increased fuel costs. But with the new settlement that directs the utility toward solar and storage, customers will see that rate hike cut to 4.6 percent.
The Levy nuclear plant was proposed in 2008 and ran into hurdles early on. With cheap natural gas in 2013, Duke Energy Florida became nervous that it might not recuperate costs spent on the nuclear plant, especially with regulatory delays.
The company cancelled its engineering and construction agreements in 2013 but said that it was holding open the possibility of returning to Levy someday. Over nine years, about $800 million had been spent on preparatory work for the plant.
With Tuesday’s announcement, those costs are sunk costs now. But overall, the changes will save residential customers future nuclear-related rate increases. Those customers will see a cost reduction of $2.50 per megawatt-hour (MWh) “through the removal of unrecovered Levy Nuclear Project costs,” the utility said.
The 700MW of solar won’t exactly cover the nameplate capacity of the Levy plant, which was supposed to deliver 2.2 gigawatts to the region. But the Tampa Bay Times wrote that Duke “is effectively giving up its long-held belief that nuclear power is a key component to its Florida future and, instead, making a dramatic shift toward more solar power.”
Duke Energy Florida serves 1.8 million people, and Florida relies mostly on (currently cheap) natural gas. Duke said this week that it wants to raise its solar power capacity to eight percent of generating power in the next four years.
This isn’t the only planned nuclear plant to be cancelled in the last few days, either. The parent company of Duke Energy Florida—that is, Duke Energy—also pulled the plug on another planned nuclear plant in North Carolina last week, according to GreenTechMedia. There, the power company asked for a rate increase to cover more than $500 million in sunk costs related to the unbuilt Lee nuclear power plant. (It should be noted, though, that more than half of the rate increase was to cover costs related to cleaning up coal ash sites.)
While Duke said that its existing nuclear power plants were a “vital component” of the power mix, the company also said that “cancellation of the [Lee] project is the best option for customers.”
Experts don’t foresee a lot of nuclear investment in the next decade or so, according to UtilityDive. But experts are divided on whether focusing solely on renewable energy is a good thing. While opponents cite nuclear’s expense and safety risk, proponents say we need all kinds of greenhouse gas-free power online as quickly as possible.