Speaking at the Energy Innovation Symposium in Washington D.C. on July 23, Southern Co. CEO Tom Fanning said that he would love “to announce another nuclear plant” later this year.
But Fanning made it clear during his keynote address to attendees at the Bipartisan Policy Center’s American Energy Innovation Council–sponsored event that he favors an “all of the above” approach. While noting that Southern Co. is pursuing the “newest generation of nuclear technology in the world today” and “leading the renaissance,” he also highlighted the company’s other energy technologies.
Fanning emphasized the importance of coal as an energy resource. With 28% of the world’s coal reserves, he said, the U.S. must “work constructively to find ways to innovate around the issues in coal.” Fanning mentioned that Southern Co. runs the nation’s carbon capture research center for the Department of Energy, but also cited the company’s own coal technology, which is being deployed at the Kemper County Energy Facility in Mississippi. The plant will strip 65% of the CO2 from the flue gas to be used for enhanced oil recovery making the carbon footprint of the plant cleaner than natural gas while helping to recover an additional 2 million barrels of oil per year.
Fanning also explained that Southern Co.’s fuel mix has changed dramatically over the years. At one time, it developed 70% of its energy from coal and only 16% from natural gas, but those percentages have changed to 35% and 45% respectively. Southern Co. is currently the third largest consumer of natural gas in the U.S. But here again, Fanning suggested that natural gas was not the sole answer.
“It is not a panacea. We have to find ways to incorporate gas into the portfolio, but it is not the only answer. There’s a lot of important work to be done to make sure that the other important parts of the portfolio work well with natural gas,” Fanning said.
The Southern Co. CEO also noted that he is bullish on renewables, particularly photovoltaic (PV) solar. The company is one of the largest PV owners in the U.S., but he was careful to stress that renewables are not going to solve all of the nation’s energy problems, at least not in the near term.
Another area that Fanning said the company was doing “deep research” in is energy storage. “We’re getting close to announcing that we’ll be involved in a big commercial venture on storage. That could be a game changer and that’s exciting,” he said.
While mentioning the investment Southern Co. has made in smart grid technology—$7 billion over the last 12 years—Fanning showed confidence in the U.S. grid overall, calling it “the best in the world,” but he noted that cyberthreats are a concern.
Fanning remained unwavering in his support for nuclear, which adds some credence to the idea that another new plant announcement could be coming in the future. “Nuclear must be a dominant solution,” he said. Fanning noted that it isn’t for every energy company to pursue, however. Southern Co.’s Plant Vogtle construction is a $14 billion project expected to take 10 years to complete. Not every company can engage in that type of investment. Fanning said three things were needed: Companies of scale, credibility of operations, and consistent financial markets.
Lastly, the electricity market plays a large role in whether or not a new nuclear plant is feasible. Fanning suggested that there are essentially two markets. “One of which is deregulated and one of which remains integrated regulated. In my opinion, the deregulated markets—the merchant markets—are badly flawed and, as currently structured, will never support the kind of environment necessary to get companies to commit to big projects like nuclear. It is a flaw in the system. So the companies that will do it are big companies in the integrated regulated realms.”
—Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)