Feds approve 2 new nuclear reactors in Texas

Dive Brief:

The Nuclear Regulatory Commission this week approved construction of two new nuclear reactors being developed near Houston, Texas by Nuclear Innovation North America LLC (NINA), a partnership between NRG Energy and Toshiba.
But it is unlikely the new units will be constructed anytime soon, reports Fuel Fix, as NRG is the majority owner and indicated five years ago it would not be investing any further in new nuclear.
The project has an estimated cost of $14 billion, and Texas power prices are some of the lowest in the nation because of cheap gas and an abundance of wind energy.
If constructed, the project would add an additional 2,700 MW of carbon-free capacity at the existing South Texas Project site.

Dive Insight:

Building new nuclear generation is a tough proposition: Years to get project approval, billions to construct it, and it might not turn a profit? Despite federal approval for two new reactors this week, NRG Energy decided back in 2011 that it would not invest in new nuclear. If market conditions turn favorable for new nuclear, "NINA will need to find a new U.S. investor to replace NRG and invest in the construction of the plant" in order for the reactors to get built, NRG Energy's Senior Director of External Communications David Knox told Utility Dive in an email.

“Market conditions, currently dominated by low natural gas prices, make the economics of new merchant nuclear challenging,” NRG spokesman David Knox told Fuel Fix. “However, we continue to believe that new nuclear power is important for Texas and a carbon constrained world and having this license will enable (the partners) to move quickly when market conditions support a construction decision.”

The license application was originally filed by South Texas Project Nuclear Operating Co., but was later taken over by NINA. NRG owns 90% of NINA, and Toshiba owns the remaining 10%.

Conversly, Tennessee Valley Authority's Watts Bar Nuclear Plant Unit 2 will almost certainly be the first new generation to be brought online in this century. TVA received an operating license for the new unit in October, and according to the project's web site the "team will now focus on preparing for initial fuel load and readying all the key components and systems for operation. The unit is on schedule for operation in 2016."

TVA said that when combined with already-operating Unit 1, Watts Bar will produce nearly 2,300 MW of carbon-free energy.

Correction: An earlier version of this post stated that NRG Energy would not invest in new nuclear unless market conditions became favorable. That is incorrect. NRG Energy will not invest in new nuclear, according to spokesman David Knox, even if market conditions become favorable. In order for NINA to build the two reactors that were permitted this week, NINA "will need to find a new US investor to replace NRG and invest in the construction of the plant," Knox told Utility Dive.