Exelon Nuclear no longer thinks GE-Hitachi's Economic Simplified Boiling Water Reactor (ESBWR) is the best choice for its proposed new plant at Victoria, Texas, and is in discussions with reactor vendors to decide on an alternative.
According to Exelon, it is dropping the ESBWR as its preferred design for the new two-unit plant after studies it carried out this summer showed that other technologies would offer "greater commercial and schedule certainty." Although it has evolved from GE-Hitachi's existing boiling water reactor designs, the design has not yet been built and has yet to receive certification from the US Nuclear Regulatory Commission (NRC). This leads the company to describe the ESBWR as still in the early design phase.
Exelon's change of mind has been driven by the need to secure federal loan guarantees, which the company says are essential for financing the project. "We are seeking improved eligibility for federal loan guarantees, which is critical to the advancement of the project," said Exelon vice president for new plant development Thomas O'Neill. While the company continues to believe the ESBWR is a design of "great promise", its development schedule "does not meet the needs of our Texas initiative", he added.
Exelon selected the ESBWR as its preferred design for the new site in November 2007. At the time, O'Neill praised the design for meeting the company's main priorities of safety and minimizing its carbon footprint, as well as GE-Hitachi's proven track record as a plant designer. Now, according to O'Neill, Exelon expects to decide on an alternative technology early in 2009.
The company submitted a combined Construction and Operating Licence (COL) application, which cost it some $23 million to prepare, to the NRC in September. It now says it will revise its application accordingly once it has decided on its new choice of reactor design. In common with other would-be reactor builders who have applied for COLs, Exelon takes pains to point out that the application for a licence does not imply a commitment to build, but says that decision is expected in 2010.
Loan guarantees made available by the US Department of Energy (DoE) to nuclear and other clean-energy technologies help would-be builders raise the necessary finance for their projects by acting as a catalyst and reducing financing cost. Should the project be delayed because of troubles with government-related consents, such as safety regulation or planning permission, the DoE would cover excess finance costs to the utility from the delay in repaying its loans. First-stage applications for guarantees to support 19 new reactors at 14 US sites were submitted by the DoE's September deadline, but the available guarantees are not sufficient to cover all of them, so it would make sense for applicants to try to climb DoE's rankings. The speed with which technologies can be commercialized is one of the DoE's selection criteria in deciding which advanced technology projects receive guarantees. Preliminary approvals are expected in 2009.
The applications submitted to DoE cover five reactor designs that are currently certified by the NRC or, like the ESBWR, are undergoing the design certification process. Of those five, only two reactor designs are currently certified by the NRC: GE-Hitachi's Advanced Boiling Water Reactor (ABWR) and Westinghouse's AP-1000 pressurized water reactor (PWR). Also awaiting design certification, along with the ESBWR, are Areva's US Evolutionary Pressurized Water Reactor (US-EPR) and Mitsubishi's US Advanced Pressurized Water Reactor (US-APWR), plus an amended version of the AP-1000.
NRG rebuffs Exelon
Meanwhile, the board of generator NRG has unanimously rejected Exelon's latest unsolicited proposal offering to exchange 0.485 Exelon shares for each share of NRG stock and has recommended that NRG stockholders do not take up Exelon's offer. Exelon initially launched its $6.2 billion offer for NRG in October. This was rejected in early November, but Exelon immediately responded with plans to approach NRG's shareholders directly.