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Apr. 21, 2011

Taro Koyano, Correspondent
Yomiuri Shimbun

NEW YORK–NRG Energy Inc., a leading U.S. utility, announced Tuesday that it would not spend any more money on a project it has been promoting with Toshiba Corp. to build new reactors at the South Texas Project nuclear power station.

The announcement effectively means that NRG has given up on plans to build two additional reactors at the plant. Toshiba had contracted to build the two reactors single-handedly, in what would have been a first for a Japanese nuclear plant maker.

NRG’s decision, which came as Japan has been struggling to deal with a nuclear crisis at the Fukushima No. 1 nuclear plant in Fukushima Prefecture, will likely deal a great blow to Japan’s joint public-private sector efforts to increase nuclear power plant exports, industry sources said.

NRG and Toshiba jointly established a nuclear development company–Nuclear Innovation North America–in February 2008 to build two new reactors with a combined capacity of 2.7 million kilowatts at the plant, which has two reactors already.

Tokyo Electric Power Co. agreed last year to invest up to 155 million dollars (about 12.8 billion yen) in the Texas project.

But given the crisis at its Fukushima plant, which was crippled in the aftermath the March 11 earthquake and tsunami, TEPCO recently announced a plan to freeze foreign investments.

Wednesday, April 20, 2011

Dallas Morning News

The old saw "Politics makes for strange bedfellows" was in evidence today as apparently unlikely allies–environmental and consumer groups and the Tea Party, represented by former GOP gubernatorial candidate Debra Merdina–spoke out against legislation that would allow nuclear waste from all over the country to be shipped to a West Texas disposal site.

April 20, 2011

World Nuclear News

The future development of South Texas Project (STP) units 3 and 4 looks unlikely after majority shareholder NRG Energy announced that it will write down its investments so far in the project and make no further investment.

The project to construct two Advanced Boiling Water Reactors (ABWRs) at STP is being developed by Nuclear Innovation North America (Nina) – jointly owned by NRG Energy and Toshiba. It had been considered among the leading new build projects in America, and was one of the few that had survived both the financial crisis and the new availability of cheap natural gas.

NRG noted that it does not have the unilateral right to cancel the project, only the right to terminate its participation in it. The company said, "while it will cooperate with and support its current partners and any prospective future partners in attempting to develop STP 3 and 4 successfully," it will not invest additional capital in the STP effort. NRG will write down its investment so far in STP units 3 and 4 and record a first-quarter 2011 pre-tax charge of some $481 million, for "the impairment of all of the net assets of Nina." The write down consists of $331 million of Nina net assets funded by NRG, together with $150 million of net investment contributed by Toshiba.

The company blamed the move on the continuing emergency at the tsunami-hit Fukushima Daiichi plant in Japan and the subsequent safety review by the US Nuclear Regulatory Commission (NRC) that could lead to modified design requirements for the STP units. Although an engineering, procurement and construction (EPC) contract for the project has already been awarded, it is impossible to finalize a price without the final design, said NRG. Furthermore, discussions about power purchasing agreements are "pointless" without a firm price for the new units. In addition, NRG said that planned Japanese financial participation in the project is "now significantly in doubt."

David Crane, chairman of Nina and CEO of NRG, said: "The tragic nuclear incident in Japan has introduced multiple uncertainties around new nuclear development in the United States which have had the effect of dramatically reducing the probability that STP 3 and 4 can be successfully developed in a timely fashion."

He added, "We continue to believe both in the absolute necessity of a US nuclear renaissance and that STP 3 and 4 is the best new nuclear development project in the country bar none. However, the extraordinary challenges facing US nuclear development in the present circumstance and the very considerable financial resources expended by NRG on the project over the past five years make it impossible for us to justify to our shareholders any further financial participation in the development of the STP project."

Last month, Nina announced that development of the new STP units had been slowed in response to regulatory uncertainty following recent events at Fukushima Daiichi. At that time, the company said that it was reducing the scope of development of the units "to allow time for the US NRC and other nuclear stakeholders to assess the lessons that can be learned from the events in Japan." For the time being, it had said, work related to development of the two new units would be limited to licensing and securing a federal loan guarantee for the project.

Nina will continue work on securing a combined construction and operating licence (COL) from the NRC and on obtaining a loan guarantee from the US Department of Energy, as these "two assets are absolutely essential to the success of any future project development." It noted that Toshiba will be responsible for funding ongoing costs to continue the licensing process. NRG said that it expects to incur one-time costs, related to a contribution to Nina, of up to $20 million.

Toshiba received a 12% stake in Nina, in return for a $300 million investment over six years. Half of this investment is to support the proposed new ABWRs at STP through Nina Investments Holdings. The other half is for new ABWR projects in North America with other potential partners. Nina holds a 92.4% stake in the project to build STP Units 3 and 4, with the remaining 7.6% held by CPS Energy (which owns 40% of the existing STP units). The project had originally been a 50-50 venture between Nina and CPS, but CPS decided to withdraw from the project altogether. However, in February 2010 an agreement was reached under which CPS would retain a small stake. CPS recently announced that it was indefinitely suspending all discussions with NRG regarding a power purchase agreement for electricity from the planned new STP units.

In May 2010, Japanese utility Tokyo Electric Power Company (Tepco) – owner of the stricken Fukushima Daiichi plant – agreed to invest $155 million for a 9% stake in the project to construct the new STP units, with an option to later increase this stake to some 18% for an additional $125 million within about one year. Tepco has been providing technical consulting services to the project since March 2007. The extent of the company’s future involvement in the STP project is uncertain.

The South Texas Project currently consists of two pressurized water reactors (PWRs), which together produce some 2700 MWe. The reactors were brought online in August 1988 and June 1989. The facility is operated by STPNOC and owned by NRG Texas (44%), CPS Energy (40%) and Austin Energy (16%).

Although the COL for STP is not anticipated until 2012, an engineering, procurement and construction (EPC) contract for the project has been awarded to a consortium of the Shaw Group and Toshiba America Nuclear Energy Corporation, and an order for one of the reactor pressure vessels has already been placed with Japanese engineering company IHI. Construction of the two new ABWRs at STP was expected to begin next year, with the first 1358 MWe unit coming online in 2016 and the second in 2017.

Researched and written by World Nuclear News

Wednesday, April 20, 2011

By Tracy Idell Hamilton
San Antonio Express-News

NRG Energy stopped all spending on the South Texas Project nuclear expansion and will write off its investment in the face of deeply diminished prospects for the project since Japan’s worst-ever nuclear accident.

"The project is not dead," CEO David Crane said Tuesday, "but it’s not moving forward at this point, and to be frank, under the current circumstances, the reality of it moving forward in the foreseeable future is not high."

The company plans to record a first-quarter pre-tax charge of about $481 million from Nuclear Innovation North America, its joint venture with Toshiba, NRG said. Toshiba funded $150 million of that.

NINA will continue to seek an operating license from the Nuclear Regulatory Commission, Crane said, as well as a federal loan guarantee from the Energy Department.

He called that decision "smart asset management," saying he could see a time when the project near Bay City, with a license and loan guarantee in hand, will be attractive to new investors.

Toshiba, which holds a 12 percent stake in NINA, will take over the costs of pursuing the NRC license. But Crane acknowledged any roadblocks in that process could cause Toshiba to drop its funding.

CPS Energy, which retains a 7.6 percent stake in the expansion, said it will continue to support efforts to secure the federal loan guarantee and operating license. It stopped its investment, which totaled about $386 million, more than a year ago.

The city-owned utility would receive $80 million from NINA if the project gets the loan guarantee.

Spokeswoman Lisa Lewis said it’s too soon to tell whether CPS ultimately will lose its investment in the project. She noted there were times during the development of STP’s original two reactors when the project looked dead, only to be revived by new partners and new circumstances.

CPS is a 40 percent owner in STP 1 and 2; Austin Energy owns 16 percent and NRG 44 percent.

Anti-nuclear activists cheered Tuesday’s announcement but were dismayed that NRG didn’t pull the plug entirely.

Karen Hadden of the SEED Coalition, an Austin-based environmental organization, said her group and others would continue to fight the licensing efforts.

NRG recognized last month that it likely lost a major investor in the expansion after Tokyo Electric Power’s Fukushima Dai-Ichi nuclear reactors were crippled by a tsunami spawned by an earthquake. NRG then suspended indefinitely all detailed engineering work and other pre-construction activities. That reduced the project workforce from 1,000 to about 350.

NINA will keep three employees on the project, Crane said.

The South Texas Project Nuclear Operating Co. had about 120 workers assigned to the expansion at its peak; that number now is 24.

Tepco’s president confirmed Monday, according to a story on Nikkei.com, that the company will reconsider its overseas business strategy as it focuses on bringing the damaged reactors under control.

04/20/2011

By Sumeet Singh Gill
TopNews NZ

NRG, a New Jersey-based independent power producer, in collaboration with Toshiba was planning to build two giant reactors in South Texas as a part of their largest nuclear project in the United States but recently it announced to give up its $331 million of investment in the wake of uncertainties created by catastrophe in Japan.

David Crane, the Chief Executive of NRG is of belief that there were some chances of project going forward if the circumstances changed.

It was more than two years ago when the Energy Department had identified the plan for the South Texas Project 3 and 4 reactors as one of the four candidates for loan guarantees.

Granting a conditional loan guarantee to one project in Georgia and with the possibility of another grant to a project in South Carolina, experts believe that this is the second of the four projects which seems like losing its breath.

Mr. Crane is of opinion that instituting a clean energy standard will surely lead to the need of creating quotas for nuclear power and it does not seem like a sensible step to go for under the given circumstances.

In addition, he said, "Toshiba, which is writing off $150 million for the project, will continue to pay to proceed with a license application with the Nuclear Regulatory Commission for the time being, on the chance that a new investor could be found".