NRG Energy

Asurge in applications for nuclear powerplant construction and operating licenses (COLs) has begun at the Nuclear Regulatory Commission. Nine applications have been submitted since July, and NRC expects 10 more this year, for a total of 19 plants and 29 units with a capacity of nearly 39,000 MW.

“Almost all this activity now is based on the Energy Policy Act of 2005,” says Steve Winn, CEO of Nuclear Innovation North America LLC, Princeton, N.J., a company formed by NRG Energy Inc. and Toshiba Corp. to develop new nuclear projects in North America. “We would not have applied if not for the Energy Policy Act,” he adds. Princeton-based NRG last September was the first to file a complete COL application with NRC, seeking a permit for two Advanced Boiling Water Reactors at the South Texas Project, Bay City.

UniStar Nuclear Energy LLC beat NRG’s filing with a partial COL application in July 2007, but completed it only last month. “NRC allows a two-part application,” explains George Vanderheyden, UniStar president and CEO. Reviewing the environmental impact statement takes longer, so it can be submitted first. “The more routine parts can be filed later,” he says. UniStar is a joint venture of Constellation Energy, Baltimore, and Electricite de France (EDF).

Critics call EPAct 2005’s incentives a giveaway that subsidizes a mature technology. But the industry needs the law’s tax credits and loan guarantees, Vanderheyden says. “Wall Street won’t underwrite projects because we don’t have a track record on [projects],” he says.

The law reduces the uncertainty added by the nuclear licensing process to the usual challenges inherent in developing a power project, adds Winn. The challenges ahead include training the workforce to construct and operate the new units and dealing with the uncertainty of loan guarantees promised in the 2005 law, he says. The Energy Dept. has not yet issued a solicitation for the $18.5 billion Congress has authorized for loan guarantees. Some industry sources have expressed fears that a new administration hostile to nuclear energy might place a hold on the guarantees if they are not locked in before the election.

NRG’s deal with Toshiba at least has relieved some of the uncertainty. “We’ve eliminated escalation from 2010 to completion because we have a firm-fixed-price contract with Toshiba,” says Winn. “NRG will get the fixed price on the same day as the license.”

NRG’s estimate is $2,900 per kW, says Winn. As an independent power producer, NRG must “keep the cost reasonable for investors,” he adds, noting a regulated utility can allow “an enormous range because they have cost recovery.”

UniStar is not divulging its costs but is counting on experienced partners and economies of scale to keep them under control, says Vanderheyden. Its reactor will be a version of the European Power Reactor now under construction in Finland and planned for France. The team’s French partner, EDF, was the architect-engineer and constructor of all of France’s 58 nuclear plants, and its design engineer, a consortium of Areva and Bechtel, also has a lot of nuclear experience. “They will be the consortium that builds the EPRs,” says Vanderheyden.

UniStar’s ambitious aim is construction of four U.S. EPRs. The first, to be added to the Calvert Cliffs plant in Lusby, Md., will become the model for the others, to be added to plants in New York, Missouri and Pennsylvania. Ground will be broken at Calvert Cliffs by the end of 2008, says Vanderheyden.