Even before TVA finishes building its new nuclear unit, the utility is preparing to spend hundreds of millions of dollars to replace faulty steam generators in the new reactor within the first decade of its operation.
TVA directors voted Thursday to pay $160 million to Westinghouse to build four steam generators to replace those in the Unit 2 reactor at the Watts Bar Nuclear Plant near Spring City, Tenn. The existing steam generators were built with a metal alloy that has prematurely developed leaks and other problems at other nuclear plants. But the faulty equipment was installed decades ago and TVA determined it would be too costly to replace those units during the construction of the second reactor at Watts Bar, which has been under construction or maintenance now for more than 40 years.
TVA previously had to replace steam generators at three other comparable units -- two at the Sequoyah plant near Soddy-Daisy and the other at Watts Bar Unit 1 -- by cutting holes in the top of the container buildings and removing the faulty steam generators. Planning and installation of the new equipment is expected to cost nearly $200 million, bringing the total costs of the new equipment, installation and lost power for the Watts Bar steam generator project to more than $300 million.
Chip Pardee, chief operating officer for TVA, said buying the replacement units now is expected to save $47 million from what TVA would have to spend if it bought the equipment later once the units started showing signs of failure.
But critics of nuclear power said Thursday the equipment purchase will add to the growing bill of the Unit 2 reactor, which TVA started building 40 years ago.The project was stalled for nearly two decades and TVA wrote off most of the initial $1.5 billion-plus investment in the unit.
But Mike Skaggs, the TVA manager overseeing the Browns Ferry work, said the project is on time and on budget and should begin generating power by December 2015.
"Nuclear power is always sold as the cheapest power until it isn't," said Stephen Smith, executive director for the Southern Alliance for Clean Energy, an anti-nuclear group based in Knoxville. "It's not cost competitive when you have these billion-dollar cost overruns that we've already experienced at Watts Bar 2 and now we're having a look at what will probably be a half billion dollar replacement project in the not too distant future."
But TVA President Bill Johnson said nuclear power remains the utility's second cheapest source of power, behind only its power generating dams, and Watts Bar Unit 2 is likely to be finished at only half the cost of other new nuclear plants being built in Georgia and South Carolina.
While TVA's nuclear program may be expensive, it is showing improvement. The U.S. Nuclear Regulatory Commission lifted a red finding at the Brown Ferry and lesser yellow and white findings at Sequoyah and Watts Bar in the past two months.
TVA's incoming chairman Joe Ritch, who has headed the board's nuclear oversight committee, said the new leaders of the nuclear program are improving performance at TVA's three operating nuclear plants and the construction of the new Watts Bar unit.
"It's a very different team than we had a few years ago," Ritch said. "We brought in some of the real experts in the industry and the results are already being demonstrated. We still have a long way to go, but I think we're headed in the right direction."
TVA also is moving toward more natural gas generation to replace its aging coal plants.
Johnson told the TVA board Thursday that the a combined-cycle natural gas plant will be erected at the Paradise Fossil Plant in Kentucky to replace the two oldest units at Paradise, which have been in operation for the past half century.
The gas plant, slated to be in operation by the summer of 2017, will be similar to what TVA built to replace the John Sevier plant in Northeast Tennessee and is projected to cost about $1 billion, Johnson said. Closing the Paradise coal units will cost about 200 jobs, but TVA said the units would have to be revamped with scrubbers and other expensive pollution controls to meet stricter new air pollution standards.
"We have determined that a combined-cycle gas plant at Paradise will help ensure power system stability and reliability in the northern-most part of our service area while meeting environmental regulations," Johnson said.
TVA has bought or built five combined-cycle gas plants since 2007. Johnson has set a long-term goal of getting 20 percent of TVA's power generation from natural gas, compared with 20 percent from coal, 20 percent from hydro and other renewable sources and 40 percent from nuclear power.
Contact Dave Flessner at email@example.com or at 757-6340.