NRG has slashed its monthly spend on its planned new reactors at the South Texas Project (STP) by 95% pending the long-awaited decision on federal loan guarantees, but says the project schedule will not slip.
|STP's existing PWRs
The announcement was made in a presentation of 2010 second quarter results by the New Jersey-based generation company. In the absence of a decision on federal loan guarantees from the US Department of Energy (DoE), NRG president and CEO David Crane told investors that the company had severely reduced its spend on the project to build two new advanced boiling water reactors (ABWRs) at the Matogorda County site, already home to two pressurized water reactors (PWRs), to $1.5 million per month from 1 August. In total, the company has slashed its monthly spend on the project by 95% from the $30 million per month it was spending prior to July 2010.
"I am more confident than I have ever been that our project will ultimately be awarded a nuclear loan guarantee from the United States government," Crane told investors. However, the likely timing of final decisions by the DoE, and even more importantly, when the money for an award would be made available, remained impossible to predict, he said.
Crane said that the withdrawal earlier this year of municipal utility CPS from the project to build STP units 3 and 4 had made it impossible for NRG to continue spending on the project at the same rate. However, in the meantime, reactor supplier Toshiba has agreed to implement interim funding measures to help cover the gap, and there would be no schedule slippage, Crane assured investors. To achieve this, critical activities including Nuclear Regulatory Commission licensing activities, safety related nuclear island engineering work, instrumentation and control engineering and ongoing engineering work to Americanize the reactor design are to continue. Non-critical activities, including removal of existing redundant buildings from the proposed site, and the procurement of additional materials, have been suspended. The project would remain "fully on schedule for at least the balance of 2010", Crane said.
Earlier this year, Japanese utility Tepco agreed to take up a stake of at least 9% in the project once it secures a US federal loan guarantee, and Tepco, Toshiba and NRG are also involved in formal discussions with Japanese government financial institutions to try to secure financial support for the project. In addition, Crane said, NRG intends to accelerate efforts towards securing long-term offtake agreements for the plant's output over the coming months while it is waiting for the DoE decision. When questioned on likely time frames, Crane hazarded a guess that federal guarantees would likely be agreed at some point before February or March 2011. He said that he would be looking to secure binding offtake commitments from "several" potential sources within the second half of 2010 or possibly early in 2011.
An application for a combined construction and operating licence (COL) for the STP units was lodged with the NRC in 2007, and construction is expected to begin in 2012, with the two 1358 MWe units coming on line in 2016 and 2017 respectively.
Researched and written
by World Nuclear News