April 28, 2011

NRG Energy pulls the plug on 2 nuclear plants


Blaming uncertainties arising from the nuclear crisis in Japan, NRG Energy says it will write down its $481 million investment in two planned new nuclear reactors in South Texas.


NRG Chief Executive David Crane said Tuesday it was unlikely the two reactors could be completed in a timely fashion.
One of NRG's partners was to be Tokyo Electric Power Company (TEPCO), the Japanese utility that owns the reactor complex crippled by last month's earthquake and tsunami.
However the project was in trouble for economic reasons well before the nuclear disaster in Japan last month. 

In September 2007, NRG Energy filed a full application to build 2 reactors totaling 2,700 MW of capacity for a cost of $10B or $13B after taking into account financing costs. 

In October 2009, the main contractor on the project, Toshiba informed the investors that the project was likely to cost $4B more than estimated. That would put the cost per kW at between $5,185 and $6,296 per kW. That news was enough for CPS Energy a 50% stakeholder at the time to pull out, to be replaced by TEPCO. 

Nuclear can no longer compete economically with other electricity power solutions. In Texas alone, NRG Energy is producing 5x as much electricity from natural gas than from nuclear. 
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