Development of units 3 and 4 at the South Texas Project (STP) has been slowed in response to regulatory uncertainty following recent events at Japan's Fukushima Daiichi plant, nuclear development company Nuclear Innovation North America (Nina) announced.
Nina - jointly owned by NRG Energy and Toshiba - said that it is reducing the scope of development of STP units 3 and 4 "to allow time for the US Nuclear Regulatory Commission (NRC) and other nuclear stakeholders to assess the lessons that can be learned from the events in Japan." It added that, for the time being, work related to development of the two new units will be limited to licensing and securing a federal loan guarantee for the project.
David Crane, chairman of Nina and CEO of NRG, said: "Our best course of action in this immediate period of uncertainty is to minimize project spend, continue with those activities we can control and wait until there is more information upon which we can base our long-term decisions." He added, "This is the financially disciplined course of action in uncertain and challenging times."
Crane said that a repeat of events at Fukushima Daiichi - which saw some reactors left without heat removal systems or backup power by the tsunami that followed an earthquake on 11 March - is unlikely to happen at the existing and planned units at STP. He said, "Since STP is very differently situated from the stricken nuclear plant in Japan - ten miles from the Gulf of Mexico, in a non-seismic area with hardened watertight protection around both its backup generation and its spent fuel storage facilities - it is not obvious to us that any modifications are necessary to regulatory requirements applicable to either our existing or planned nuclear facilities."
However, he added, "As we unreservedly support our government's proposed nuclear safety review, the prudent thing for us to do is to await the outcome of that review before committing more of our own or our partners' capital."
NRG said that it remains committed to the timeframe previously established for making key decisions on its continuing involvement in the development of the planned news Advanced Boiling Water Reactors (ABWRs) at STP.
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.
In May 2010, Japanese utility Tokyo Electric Power Company (Tepco) – owner of the 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 remains to be seen.
CPS ends talks
Yesterday, CPS announced that it was indefinitely suspending all discussions with NRG regarding a power purchase agreement for electricity from the planned new STP units.
CPS president and CEO Doyle Beneby said, "As we have indicated for months now, we are currently pursuing an array of other clean affordable supply options. Terminating discussions with NRG allows us to devote more resources in pursuit of the other options." However, he added, "When the development of STP 3 and 4 moves forward again, our present ownership interest will remain unchanged."
CPS said that it is not ruling out future discussions with NRG, but "if and when those discussions reconvene, the two parties would start anew."
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 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 is expected to begin in 2012, with the first 1358 MWe unit coming online in 2016 and the second in 2017.
Researched and written
by World Nuclear News