NRG Energy, the majority owner and operator of the South Texas Project, on Tuesday said it was pulling its financial support for a multibillion-dollar project to build two new advanced boiler water reactors (ABWRs) at its nuclear plant in Matagorda County, Texas, because the Japanese nuclear crisis had “diminished prospects” for that project.
The company based in Princeton, N.J., said it would “write down its investment in the development” of Units 3 and 4, and while it would cooperate with and support its current partners and any prospective future partners in attempts to develop the nuclear project, it would not “invest additional capital in the STP development effort.”
“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&4 can be successfully developed in a timely fashion,” David Crane, president and CEO of NRG, said in a press release on Tuesday.
Crane added that NRG believed in the “absolute necessity of a U.S. nuclear renaissance and that STP 3&4 is the best new nuclear development project in the country bar none.” However, he added, “the extraordinary challenges facing U.S. 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.”
NRG has spent $331 million on planning and permitting the expansion. Toshiba American Nuclear Energy Corp., its partner in the Nuclear Innovation North America (NINA) joint venture spearheading the expansion contributed $150 million to the project.
NINA last month announced it had indefinitely suspended all detailed engineering work and other preconstruction activities and cut the project workforce. The joint venture company is expected now to be focused solely on securing a combined operating license from the Nuclear Regulatory Commission (NRC) and on obtaining a loan guarantee from the U.S. Department of Energy. Those two assets would be “absolutely essential to the success of any future project development,” NRG said.
NRG’s withdrawal means that Toshiba will be responsible for costs to continue the NRC licensing process. NRG holds an 88% share of NINA, while Toshiba holds the remaining 12%. The Tokyo Electric Power Co. (TEPCO)—a company whose finances have taken a beating after a debilitating earthquake and tsunami severely damaged its Fukushima nuclear power plant in Japan—was expected to take a 10% share in the STP expansion once NINA secured a DOE loan guarantee.
TEPCO served as a technical consultant for the STP expansion, chosen because of its experience with ABWRs. NINA says on its website that TEPCO brought two ABWRs online “on time and on budget,” and “literally wrote the book on training the workforce for Advanced Boiler Water Reactor technology.” The Fukushima crisis has, however, raised questions about TEPCO’s continued participation in the South Texas expansion.
Toshiba, along with GE-Hitachi, designed the Generation III ABWR (for more on the history of this and related reactor technologies, see “The Evolution of the ESBWR” in POWER’s November 2010 issue) and it has built two of four ABWR units already commissioned in Japan.
NINA’s former 50-50 partner in the STP expansion, San Antonio municipal utility CPS Energy, early last year pulled its investment of about $386 million and reduced its share in the expansion project to 7.6% after a dispute arose concerning preliminary cost estimates to build the two new units. Toshiba reportedly gave CPS Energy a cost estimate of $4 billion more than the preliminary total project cost of $13 billion.
The disagreement escalated after NRG Energy sued CPS Energy, claiming the utility should forfeit its $300 million investment and lose all value in the project. CPS then countersued the New Jersey energy company for $32 billion, claiming NRG, NINA, and Toshiba failed to disclose critical cost information and disparaged CPS to hurt the utility’s ability to sell part of its stake in the nuclear project.
Sources: POWERnews, NRG Energy, NINA, POWER