Southern Company (SO) Expects Further Delay for Georgia Vogtle 3
Southern Company’s SO subsidiary, Georgia Power, announced another setback in the commercial operation of the newly constructed Unit 3 reactor at the Vogtle nuclear power plant. A degraded hydrogen seal was discovered in the main generator during the start-up and pre-operational testing, leading to further delay in the project.
Vogtle Nuclear Power Plant Expansion - Background
The Vogtle nuclear power plant, located southeast of Augusta, GA, has been undergoing expansion with the addition of Unit 3 and Unit 4 reactors. The project has faced numerous delays and cost overruns, significantly impacting its timeline and budget. Unit 3, which is currently under scrutiny, was expected to start commercial operations in June 2023.
Delay Due to Degraded Hydrogen Seal
The degraded hydrogen seal in VogtleUnit 3’s main generator caused the utility company to delay the reactor's commercial operation by at least another month. The estimated in-service date has now been set for July 2023. It is important to note that this issue pertains to the generator and not the reactor itself.
Progress and Challenges in Unit 3 Testing
Despite the setback caused by the degraded hydrogen seal, Georgia Power reported that Unit 3 operated as designed during the pre-operational testing and start-up sequence. Power-ascension testing, which measures the reactor's performance at various power levels, is approximately 95% complete. However, it is worth mentioning that Unit 3 has experienced a series of complications and risks of delays throughout its construction.
Impact on Vogtle Plant Expansion Project
The Vogtle plant expansion project has been affected by significant delays and cost increases, causing the budget to exceed $16 billion. The recent delay in Unit 3's commercial operation adds to the project's challenges.
These setbacks disrupt the timeline and escalate capital costs, as additional repairs and adjustments are necessary to address the issues. Furthermore, such delays hamper the role of new nuclear reactors in meeting renewable energy goals and reducing carbon emissions.
Conclusion
The inevitable delay and cost overrun for Georgia Power's Vogtle Unit 3 highlights the complexities and risks involved in building new reactors. In order to avoid such instances in the future, Georgia Power needs to ensure nuclear power's safety, reliability and efficiency for the energy transition.
Zacks Rank and Key Picks
Southern Company is an American utility firm that provides electricity to customers across southern United States. It is one of the country's largest energy companies, focusing on clean energy and sustainability.
Currently, SO carries a Zacks Rank #3 (Hold).
Investors interested in the utility sector might look at some better-ranked stocks like Veolia Environnement VEOEY, sporting a Zacks Rank #1 (Strong Buy), and MYR Group MYRG and E.ON EONGY, each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Veolia Environnement: The company is worth approximately $22.92 billion. VEOEY currently pays a dividend of 46 cents per share, or 2.89% on an annual basis and
VEOEY is a global company providing environmental services in the water, waste management, energy and transportation sectors. Its shares have risen 40.3.% in the past year.
MYR Group: The company is worth approximately $2.22 billion. Its shares have rallied 62.2% in the past year.
MYR Group is a holding company of specialty contractors, providing comprehensive electrical infrastructure services in Canada and the United States. It offers design, engineering, procurement, construction, upgrade, maintenance, and repair services for transmission and distribution networks, and substation facilities of any size and type.
E.ON: The company is valued at around $32.86 billion. In the past year, its shares have risen 40.9%.
EONGY is the world's largest investor-owned energy service provider with operations in energy, chemicals, real estate, oil, telecommunications, distribution/logistics, aluminum and silicon wafers.
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