A utility in South Carolina is seeking to resume construction on a power plant that was halted eight years ago due to budget overruns, which ultimately led to the bankruptcy of a well-known American corporation.
In pursuit of the booming demand for power from data centers, the state-owned utility Santee Cooper is actively seeking partners to finance and complete the two reactors at the Virgil C. Summer Nuclear Power Station, according to the Wall Street Journal.
The Virgil C. Summer Nuclear Power Station currently operates a single reactor. Santee Cooper initiated the construction of two additional reactors, an expansion project that began in 2008. However, work on the project was suspended in 2017 when an audit revealed that costs had soared from $9.8 billion to $25 billion, with delays pushing completion far longer than anticipated, resulting in the loss of $2 billion in federal incentives.
This costly misadventure contributed to the bankruptcy of Westinghouse, a nuclear power company that evolved from one of America’s earliest electric firms. Additionally, it resulted in securities fraud convictions for two executives at SCANA, the partner utility in the project.
The reactors under construction were similar to a pair at the Vogtle Electric Generating Plant in Georgia. That expansion was finally completed in 2023 after numerous delays and extensive budget overruns, casting doubt over the future of the nuclear power industry in the U.S.
Despite the troubled past of V.C. Summer, Santee Cooper remains hopeful about attracting buyers, especially as interest in nuclear energy rises in response to the surging electricity demands generated by AI data centers.
The utility has some advantageous developments: Microsoft recently reached an agreement with Constellation Energy to reactivate a reactor at Three Mile Island, while Meta is seeking proposals from developers for 1 to 4 gigawatts of new nuclear capacity. Santee Cooper reportedly aims to collaborate with a consortium that includes a tech company interested in securing energy resources.
Any agreement arranged by Santee will likely encounter political challenges. A portion of the expenses for the V.C. Summer project was passed on to ratepayers due to a state law permitting utilities to shift the financial burden of new nuclear plants. Successfully completing the expansion and securing a buyer for the generated power could alleviate some of this financial strain. Being a state-owned entity, any deal will attract considerable political attention, for better or worse.
Compiled by Techarena.au.
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