August 4, 2017 Read More →

Vogtle, Kemper, V.C. Summer: ‘Is the Era of the Utility Megaproject Over?’

E&E News:

Vogtle. Kemper. V.C. Summer. A decade ago, this trio of sprawling power projects signaled the next wave of cleaner baseload energy that would keep air conditioners and the economy humming in the fast-growing Southeast.

Now, all three have become a symbols of broken promises and busted budgets — a narrative capped by Monday’s announcement that Scana Corp. and state-owned Santee Cooper were pulling the plug on the V.C. Summer Nuclear Generating Station after pouring in billions of dollars of ratepayer funds (Energywire, Aug. 1).

Lingering problems faced by all three power projects and the continuing transformation of the electric power industry begs a question: Is the era of the utility megaproject over?

“I think people are going to think twice about these type of cutting-edge projects,” said Paul Patterson, an analyst at Glenrock Associates LLC. “That goes for utilities and policymakers alike.”

While the high-profile Southeast power plants have become symbols for the challenges of developing multibillion-dollar power projects, they are by no means alone.

The price tag for Duke Energy Corp.’s 618-MW Edwardsport Power Station, a coal-gasification power project in Indiana completed in 2013, was almost twice its expected $1.9 billion estimate. And the Prairie State Energy Campus, a 1,600-MW supercritical coal plant in southern Illinois developed by Peabody Energy Corp., cost more than twice its initial $2 billion cost estimate.

In fact, cost overruns and delays on large power-sector projects are endemic in the U.S. and overseas, according to a December report by Ernst & Young LLP. The analysis of 100 of the world’s largest utility generation, transmission, distribution and water projects found that on average, they are $2 billion over budget and two years behind schedule.

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