NRG first to slow US nuclear work after Japan

Tue Mar 22, 2011

Reuters News Service

While supportive of the Nuclear Regulatory Commission’s move to learn from the Fukushima emergency, Crane said the agency’s review must be timely. "We can’t afford a review that takes two years," Crane said.

New Jersey-based NRG said it remains committed to its choice of the Advanced Boiling Water Reactor (ABWR) design even though it expects some regulatory requirements to change.

Even a seemingly simple design change — such as requiring reactors on a single site to be built farther from each other — could be "fatal" to a project as far along as the South Texas Project expansion, Crane said.

"We’d have to start over with bedrock and soil studies," he said.

The plan to build new units at South Texas by 2016 was one of the most advanced amid a so-called renaissance in the U.S. atomic energy sphere, but had already run into trouble.

Last fall, NRG reduced its nuclear development spending to $1.5 million a month due to the delay in obtaining federal loan support Crane has said is critical to moving forward.

Overall spending by the partners, which had been $20 million to $30 million a month, will be cut to $8 million to $10 million, Crane said.

Tepco, which owns the damaged Fukushima plant, had agreed to invest $125 million in the Texas nuclear expansion project if it obtained federal loan support, but Crane said the status of Tepco’s involvement is now unknown as the company struggles to rebuild its Japanese plants.

Japan’s nuclear problem only makes it more difficult for U.S. developers to move forward.

"The economics were not good at all for the U.S. to build new nuclear plants given the low gas prices and the outlook for huge reserves of gas," said Jone-Lin Wang, managing director for global power for IHS CERA.

"Before this accident, the economics were a tough sell for nuclear, but you have to consider the diversity of fuel" and the expected 60-year lifespan of new reactors, she said.

While Crane said NRG will wait until late summer to decide whether to continue investing in the STP expansion, analysts have said a move by NRG to abandon the project could be positive in the long run.

NRG shares, which have risen since the March 11 earthquake, gained 14 cents on Monday, to close at $20.86 per share on the New York Stock Exchange.

(Editing by David Gregorio, Gary Hill)

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