By David Adams
MIAMI (Reuters) - Duke Energy Corp said on Thursday it will not proceed with a $24 billion nuclear power project in central Florida because of licensing delays and doubts about cost recovery, but may use the site for nuclear power generation in the future.
The announcement was the latest blow to nuclear power investment in the Sunshine State and reflected the boom in natural gas development nationwide.
Although it is pulling the plug on plans to build a nuclear plant in Florida's Levy County, the company said it continues to regard the Gulf Coast site as a "viable option for future nuclear generation."
"We continue to believe that a balanced energy portfolio, including renewable energy, energy efficiency, and state-of-the-art cleaner power plants are critical to securing Florida's energy future," Alex Glenn, president of Duke Energy's utility operations in the state, said in a statement.
He cited delays in the licensing of new plants by the Nuclear Regulatory Commission, as well as uncertainties about cost recovery, as among leading reasons plans to build the plant had been put on hold.
"Nuclear energy should remain an option to meet Florida's future energy needs," said Glenn.
Duke Energy Florida provides electricity to approximately 1.7 million customers in Florida.
Duke Energy, the biggest power company in the United States, announced in February that its Progress Energy Florida utility would retire the Crystal River nuclear plant on the state's west coast.
The plant had been offline since late 2009 due to damage done to the reactor's containment structure during a power upgrade and the replacement of the unit's steam generators.
The Levy project decision was welcomed by critics of nuclear energy in Florida. "Duke's leadership has taken a fresh look at these unnecessary nuclear projects and has absolutely made the right decision for Florida consumers," said Stephen A. Smith, executive director of Southern Alliance for Clean Energy.
"While important details are still being resolved, Florida consumers should rejoice in knowing that the fleecing associated with this nuclear project will end," he added, noting that the Levy project cost had "skyrocketed."
Duke said it will continue the process to obtain a license to build the plant, but in the meantime it plans to seek to construct or acquire natural gas-fired power generation.
"It is encouraging to see Duke recognize the value of nuclear energy by keeping its options open for this site," said Jerry Paul, a Florida-based nuclear engineer with the Energy Information Institute. "Most experts would agree that zero-emission nuclear energy must play a role in America's and Florida's future energy supply," he added.
Paul said the Levy decision appeared to be based on a narrow set of factors related to Duke's Florida territory, including electricity demand projections and the timeline for available energy from that plant compared with the delays in the permitting process.
There are currently 100 reactors licensed to operate in the United States. The reactors have a total capacity of about 97,843 megawatts (MW) and generate about 20 percent of the nation's power.
In February Duke said it was evaluating the potential to build a new gas plant that could come online as early as 2018.
In 2012, before the merger with Duke, Progress said it delayed the proposed in-service date for the Levy county nuclear power plant to 2024 with a second unit following 18 months later. The company also boosted the cost estimate for the 2,200-MW project to between $19 billion and $24 billion.
(Additional reporting by Scott DiSavino; Editing by Phil Berlowitz)