Nuclear or natural gas?

• Author: Marsh, Kevin
• Position: THE CAROLINAS' NUCLEAR CLUSTER

Nuclear or natural gas? Which is the best option for powering South Carolina's long-term needs for base load electric power?

South Carolina Electric & Gas and state-owned utility Santee Cooper are working together to build two nuclear-powered electric generating units at our jointly-owned V.C. Summer Nuclear Station near Jenkinsville, S.C. The project is progressing well and is currently $550 million under the cost originally approved by the Public Service Commission of South Carolina in 2009. However, with natural gas prices at relatively low levels, some are asking if it might make sense for us to stop work on our nuclear project to pursue a natural gas generation strategy.

It's a legitimate question, one we have, in fact, studied. That analysis still points to moving forward with new nuclear. When evaluating options for generating electricity, it's not just about construction costs. There are many other considerations.

First is fuel costs. Although natural gas prices are relatively low right now, it's still cheaper to produce electricity using nuclear fuel. It's extremely positive that natural gas prices are low today, but a 20-year historical review will show significant volatility in its cost.

The natural gas industry is changing. Today, about 30% of our electric generation is fired by natural gas. Our customers are enjoying the benefits of lower cost gas that shale gas fields and fracking technology have made available recently. However, this same technology is relatively new. Wholesale natural gas prices are currently unregulated. and many question the long-term impacts of fracking. Gas producers are working on strategies to export their natural gas to overseas markets, which may place .upward pressure on price. For all of these reasons, betting South Carolina's energy future primarily on natural gas is not without risk. Gas has a role--a supporting role--in a balanced portfolio that will protect customers against price swings in any one fuel supply.

Nuclear power does not emit carbon dioxide: natural-gas-fired generation does (about half as much as coal). President Obama's recent introduction of a new Climate Action Plan, specifically targeting carbon emissions, further increases the likelihood of stringent new regulations on carbon emissions. Those regulations will come with significant expense. Once our new nuclear units are complete. our generation production will be roughly 60% non-emitting, reducing the impact of generation...