NRG Energy Inc. has formed a new company that will invest in new nuclear projects in select markets across North America.
The company, Nuclear Innovation North America LLC, will take over the development of the planned nuclear plant expansion at the South Texas Project. The development of the two nuclear-generating units will be delayed as a result of the formation of the new company. Units 3 and 4 should come online in 2015 and 2016, respectively. The units had been slated to come online in 2014 and 2015.
Princeton, N.J.-based NRG (NYSE: NRG) is jointly developing two new nuclear reactors at the Bay City, Texas complex with San Antonio's CPS Energy. NRG will transfer its portion of the work to Nuclear Innovation North America.
Japan's Toshiba Corp., which is serving as the prime contractor on the South Texas Project expansion, will become an equity partner with NRG on the new venture.
Toshiba will invest $300 million in the company over the next six years in return for a 12 percent equity stake in Nuclear Innovation.
One advantage to the NRG-Toshiba venture is that Toshiba has agreed to extend pre-negotiated engineering, procurement and construction terms to Nuclear Innovation for two additional nuclear projects.
This favorable pricing structure could lead to a "nuclear renaissance" in the United States for new nuclear energy projects, according to NRG officials.
"New advanced nuclear is a key part of the future for affordable, reliable and zero carbon baseload generation not only in Texas but throughout the United States," says NRG President and CEO David Crane. "And after a 30-year hiatus, we believe the most cost-effective and risk-managed way to reintroduce nuclear ... is by working with the companies that have been so successful with on-time, on-budget nuclear construction in other countries."
By this, Crane is referring to Toshiba and its expertise in building Advanced Boiling Water Reactors throughout the world, including two completed in Japan.
"We are making a strong investment in renewing America's electrical infrastructure and meeting growing U.S. electricity demand," Crane says. "These projects represent at least $15 billion of direct investment in the U.S. economy through jobs and equipment."
(Source: San Antonio Business Journal)