Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Since 2001, we and just about every other business publication have written stories on the coming nuclear renaissance. (http://www.businessweek.com/magazine/content/01_17/b3729077.htm?chan=search ) It’s a development that was seen as almost inevitable. The country needs more electricity. And with coal plants being blocked or cancelled because of concerns over global warming, nukes were looking more and more attractive. Sure, there are still lingering worries over waste disposal and nuclear proliferation, but the new generation of plants are safer and, the industry expected, cheaper to build. The question was, who would take the first leap?
Now we have an answer. It’s a Princeton, NJ-based utility named NRG. http://www.nrgenergy.com/
On Sept. 24, the company and South Texas Project Nuclear Operating Company filed an application with the Nuclear Regulatory Commission to build two new nuclear units at the site of two existing nukes in Texas. "We think the nuclear renaissance is finally upon us," says NRG CEO David Crane.
Going first is risky. The application will test the NRC's new application process, which will grant both an construction and operating license. (In the past, companies had to first get a construction license, and then, once the plant was built, an operating license). The new approach is supposed to trim the time needed to get a plant up and running by a number of years. But no one knows yet what snafus will appear. If the process takes longer than expected, the utility that goes first could lose money.
That's why the half-joke in the industry has been that everyone was racing to be second. Let someone else test the process, but stay ahead of all the others.
Crane, however, argues that not being first is also risky. One little known fact is that there's only one supplier of the huge forgings that make up the pressure vessel--a Japanese steel company. If you don't snare their upcoming production soon, you won't even be able to build a plant. NRG has already contracted to buy the forgings it needs. "We had to order now for a plant that won't be online until 2014," says Crane. "It is very Machiavellian, trying to secure your forging." NRC was able to get the ones it needs by ordering through Toshiba.
Another potential hurdle for those who follow is finding people who know how to build a complex nuclear plant. "We think filing later is risky because of a shortage of skilled labor," explains Crane.
So it's reasonable to expect that one or two other companies will jump in soon, in the wake of NRG. But those who wait too long will end far behind.
What about opposition? Nuclear power is an uncomfortable issue for the environmental community. Some groups, such as the Pew Center on Global Climate Change, have grudgingly accepted that, in the battle against global warming, nukes are a necessary evil. Others remain adamantly opposed. “Building nuclear reactors to solve our energy problems is like going fishing with grenades: it’s expensive, stupid, and dangerous, and there’s a ton of better options,” says Luke Metzger, director of Environment Texas. With the new plants being built on the site of existing ones, however, the opposition is not expected to be strong enough to derail the plans.
BusinessWeek correspondents John Carey and Mark Scott, cover the green scene, keeping on top of the business aspects of energy, the environment and climate change, as well as the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.