A recent report from Fitch Ratings views growth prospects for the nuclear electricity industry as uncertain.
The report cites the U.S. Energy Information Administration’s prediction, made earlier this year, that the amount of electricity generated by nuclear sources would decrease by approximately 10,800 megawatt hours by 2020. This figure is attributed to expected stagnation of electricity demand and low-cost natural gas sources.
The report also notes that construction of both the Virgil C. Summer and Vogtle nuclear plants have fallen behind schedule, with costs reaching approximately $12.4 billion and $14.5 billion respectively. This comes despite the utilization of modular construction that was developed by Westinghouse Electric Company, intended to streamline construction so that it is a faster and less-costly process.
Despite this, Fitch does recognize that the recent Clean Power Plan from the Environmental Protection Agency and recent federally funded nuclear research could lead to positive growth factors in the longer term.
Fitch said that only five plants are currently under construction and that a majority of the 99 nuclear reactors in operation have received 20-year extensions beyond original 40-year initial life spans. As part of the Clean Power Plan, credits are given to support the construction of new plants and to make needed upgrades to existing plants, the Fitch report said this potentially would slow the apparent decline in nuclear power generation.
