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GE and Hitachi's are NRG's nuclear option

Posted by: Ian Rowley on June 23, 2006

Renewed interest in nuclear technology shows no signs of letting up. According to reports in today’s Japanese press, NRG Energy is set to ink a deal with GE and Hitachi to build two nuclear power plants in Texas. The $5.2 billion project will come on stream in 2014 with each plant using boiling-water reactor (BWR) technology to produce 1.35 million kilowatts of power. If the deal gets approved—NRG has filed a letter of intent to Nuclear Regulation Commission—the two new plants will be the first in the U.S. since the Three Mile Island accident in 1977 and the first new plants commission since 1973. Hitachi, which makes about 12% of its revenue from its power and industrial systems biz, has confirmed the reports but says no contracts have been signed.

The proposed deal also highlights how keen Hitachi and Japanese rivals Toshiba and Mitsubishi Heavy Industries are to export their expertise overseas a time when interest in nuclear power has been reignited. In February, Toshiba beat off stiff competition to buy Westinghouse from Britain’s BNFL for $5.4 billion. While expensive, Toshiba is keen to use Westinghouse’s pressurized-water reactor (PWR) tech to grow in China. Mitsubishi Heavy, meanwhile, reports the Nihon Keizai Shimbun, is searching for a PWR partner and wants to establish a nuclear power venture in the U.S. With fears over energy shortages rising, expect more deals to follow.

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