AI Demand Could Revive Zombie Nuclear Reactors

Restarting the Virgil C. Summer Nuclear Project

A utility company in South Carolina is seeking to resume construction on a nuclear power plant that was suspended eight years prior. This occurred following significant cost overruns and ultimately contributed to the bankruptcy of a prominent American corporation.

Capitalizing on Data Center Demand

Santee Cooper, the state-owned utility, is actively searching for partners to provide the necessary funding and complete the construction of two reactors at the Virgil C. Summer Nuclear Power Station. This initiative is driven by the increasing power demands of data centers, as reported by the Wall Street Journal.

Project History and Challenges

The Virgil C. Summer Nuclear Power Station currently operates with a single reactor. An expansion project, initiated in 2008, aimed to add two new reactors. However, construction was halted in 2017.

An audit revealed that the project's expenses had escalated dramatically, jumping from an initial estimate of $9.8 billion to $25 billion. Furthermore, the completion timeline was significantly extended, resulting in the loss of $2 billion in federal incentives.

Impact on Westinghouse and SCANA

This costly undertaking played a role in the bankruptcy of Westinghouse, a nuclear power company with a long history dating back to the origins of the American electric industry.

The situation also led to legal repercussions, with two executives from SCANA, Santee Cooper’s partner in the project, being convicted of securities fraud.

Comparison to Vogtle Electric Generating Plant

The reactors under construction at V.C. Summer are similar in design to those installed at the Vogtle Electric Generating Plant in Georgia. The Vogtle expansion, despite facing years of delays and substantial cost overruns, was finally commissioned in 2023.

This experience cast a shadow over the broader U.S. nuclear power sector.

Renewed Optimism and Current Opportunities

Despite the troubled past of the V.C. Summer project, Santee Cooper expresses optimism about attracting investors. This optimism is fueled by a renewed interest in nuclear power, driven by the escalating power needs of artificial intelligence data centers.

Recent Developments and Potential Buyers

Several recent developments support this outlook. Microsoft has entered into an agreement with Constellation Energy to reactivate a reactor at Three Mile Island.

Additionally, Meta is actively seeking proposals from developers for 1 to 4 gigawatts of new nuclear capacity.

Santee Cooper is reportedly aiming to sell the project to a consortium that includes a technology company seeking a secure power source.

Political Considerations

Any potential agreement reached by Santee Cooper will likely encounter political complexities. A state law previously allowed utilities to pass on the costs of new nuclear reactors to ratepayers.

Completing the expansion and securing a buyer for the generated power could alleviate this financial burden on consumers. As a state-owned utility, any deal will inevitably attract scrutiny from politicians.