Cancellation of Maryland Plant Delivers Double Whammy

Constellation's pullout from Calvert Cliffs project is a blow to France's EDF and U.S. nuclear prospects

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Cancellation of Maryland Plant Delivers Double Whammy

Constellation Energy's decision this last week to not build a nuclear reactor after all in Maryland was a big shock to its partner EDF, which had been banking on the alliance to serve as its wedge into the U.S. reactor market, and to the market itself.

Constellation's reason for pulling out was the high fee the Energy Department proposed to charge for extending a Federal loan guarantee to cover the project, estimated at $10 billion. DOE and nuclear regulators had come under fire from influential nuclear critics like former NRC commissioner Peter Bradford for extending loan guarantees on excessively soft terms, at growing risk to U.S. taxpayers.

There's no gainsaying that nuclear construction projects are looking riskier all the time, especially in the United States, where many factors have conspired to spoil dreams of a big nuclear renaissance: declining energy demand since the onset of the global economic crisis (down 4 percent since 2007 in the States); plummeting natural gas prices (down almost half from what they were a few years ago); collapsing prospects for enactment of a U.S. climate bill (which would have raised the costs of fossil-fuel-generated electricity); and soaring reactor construction costs (with EDF's current reactor 40 or 50 percent more expensive than originally billed).

An analysis in the Financial Times deems Constellation's decision "strategically devastating" for EDF--but also potentially helpful in the long run, because France's national utility already was widely believed to have been putting too much money on its losing U.S. bet.

POSTSCRIPT, Oct. 14: It's being reported today that EDF, attempting to keep Calvert Cliffs alive, is offering to either buy out Constellation's stake in the project or assume all project development costs until construction begins. It wants Constellation to drop a contractual option that could force EDF to buy up to $2 billion in conventional generation assets from the U.S. energy company.

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This photograph shows a car with the words “We Drive Solar” on the door, connected to a charging station. A windmill can be seen in the background.

The Dutch city of Utrecht is embracing vehicle-to-grid technology, an example of which is shown here—an EV connected to a bidirectional charger. The historic Rijn en Zon windmill provides a fitting background for this scene.

We Drive Solar

Hundreds of charging stations for electric vehicles dot Utrecht’s urban landscape in the Netherlands like little electric mushrooms. Unlike those you may have grown accustomed to seeing, many of these stations don’t just charge electric cars—they can also send power from vehicle batteries to the local utility grid for use by homes and businesses.

Debates over the feasibility and value of such vehicle-to-grid technology go back decades. Those arguments are not yet settled. But big automakers like Volkswagen, Nissan, and Hyundai have moved to produce the kinds of cars that can use such bidirectional chargers—alongside similar vehicle-to-home technology, whereby your car can power your house, say, during a blackout, as promoted by Ford with its new F-150 Lightning. Given the rapid uptake of electric vehicles, many people are thinking hard about how to make the best use of all that rolling battery power.

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