South Carolina's state utility says private firm set to restart abandoned $9 billion nuclear project

South Carolina's state utility, Santee Cooper, is negotiating with Brookfield Asset Management to revive the abandoned $9 billion V.C. Summer nuclear project, which ceased construction eight years ago after massive cost overruns and executive fraud. The proposed deal would see Brookfield develop the plants at its own risk, primarily selling power to high-demand entities like data centers, while providing some output to Santee Cooper, thereby shifting financial exposure away from ratepayers. This initiative reflects growing interest in nuclear power driven by surging demand from AI and data centers, alongside federal support, though significant regulatory, technical, and cost challenges persist, leading to skepticism regarding the project's ultimate completion.

Analysis

Santee Cooper is negotiating with Brookfield Asset Management (BAM) to revive the $9 billion V.C. Summer nuclear project, abandoned eight years ago after significant cost overruns and executive fraud. This proposed deal aims to transfer financial risk from ratepayers to Brookfield, which would develop the plants at its own risk, primarily to supply power to energy-intensive data centers and AI development, while providing some output to Santee Cooper.

The renewed interest in the project is driven by surging U.S. power demand from data centers and AI technology, coupled with federal support for nuclear power expansion, as indicated by President Trump's executive order. Santee Cooper received 15 formal proposals from 70 bidders, underscoring the broader market's interest in addressing this demand.

However, substantial challenges persist, including the necessity for thorough inspection of the less-than-half-finished plant after eight years of exposure and the probable need to renew permits and licenses from scratch. Skepticism from experts like Tom Clements highlights significant cost, technical, and regulatory hurdles, further complicated by Brookfield's contractual option to withdraw if the project proves unfeasible.

Key Decisions for Investors

• Monitor Brookfield Asset Management's (BAM) due diligence and negotiation outcomes, especially regarding the project's feasibility and any potential withdrawal clauses.
• Evaluate the broader implications for U.S. nuclear power infrastructure development, considering regulatory frameworks and the escalating demand from AI and data centers.
• Assess Brookfield's capacity to mitigate historical project risks and leverage its expertise, including the Westinghouse acquisition, in large-scale nuclear construction.