The Nuclear Regulatory Commission (NRC) has cleared the way for the agency’s Office of New Reactors to issue two Combined Licenses (COL) for Nuclear Innovation North America’s (NINA) South Texas Project (STP) site in Texas. The project involves twin 1350 MW ABWR nuclear reactors. The NRC certified the ABWR design in 1997

The licenses will authorize NINA to build and operate the units at the site near Bay City, Texas. The South Texas Project Nuclear Operating Company already operates two reactors at the site.

NRC’s staff will impose several conditions on the license, including:

specific actions associated with the agency’s post-Fukushima requirements for Mitigation Strategies and Spent Fuel Pool Instrumentation;

requiring monitoring and analysis of the reactors’ steam dryers during initial plant startup, in line with current procedures for existing boiling-water reactors approved to operate at increased power levels; and

setting a pre-startup schedule for post-Fukushima aspects of the new reactor’s emergency preparedness plans and procedures.

NINA submitted its application for the licenses on Sept. 20, 2007. In doing so it was the “first-mover” in what was thought at the time to be the bow wave of the U.S. nuclear renaissance. That vision eventually fizzled as natural gas prices tumbled to record low values removing the business case for many reactor projects in merchant markets.

What this all means is that NRG Energy and its partners, including Toshiba, have a go ahead from the NRC to build two new nuclear reactors near Houston. However, at this time the partners have no plans to actually proceed with the project. The key reason is that they lacks U.S. investors. The cities of San Antonio and Austin, TX, pulled out nearly half a decade ago and no others have stepped forward to fill their spots.

Austin, TX, burned by cost over-runs for the first two reactors at STP, was in no mood to take a risk on two more. A coalition of green groups, and an anti-nuclear municipal power director, convinced the city council to vote to withdraw from the project.

San Antonio’s mayor got cold feet about nuclear power when he encountered a political backlash from his constituents over the the costs of bonds, and electricity rate increases, needed to pay for construction of the reactors.

The NRG partnership continues to look for new U.S. investors to eventually move the project forward, NRG spokesman David Knox said in 2010 it would not invest more of its own money in the expansion. Not much has changed since then. The firm now estimates the cost of build the two 1300 MW units to be about $14 billion.

“Market conditions, currently dominated by low natural gas prices, make the economics of new merchant nuclear challenging,” Knox said in media interviews.

“However, we continue to believe that new nuclear power is important for Texas and a carbon-constrained world, and having this license will enable (the partners) to move quickly when market conditions support a construction decision.”

The existing South Texas Project is owned by NRG, Austin Energy and San Antonio’s CPS Energy. The expansion, if it were to be built, would be led by a company called Nuclear Innovation North America, or NINA, which is 90% owned by NRG and 10 percent by Toshiba.

If constructed, the project would add an additional 2,700 MW of carbon-free capacity at the existing South Texas Project site.

Texas, one of the nation’s leading fossil fuel states, has been a graveyard for new nuclear projects. In 2010 Exelon exited from a proposal to build two new reactors near Victoria, TX, leaving behind an application for an Early Site Permit that is good for 20 years. Comanche Peak stopped work on an NRC COL application to build two Mitsubishi 1700 MW PWR type reactors and the vendor has stopped work on design certification at the NRC.

The current low prices for natural gas, and diminished demand for electricity, have put the “bet the company” type investments in nuclear reactors out of reach for American utilities in merchant markets.

The situation in Texas is mirrored elsewhere in the U.S. As far back as 2011, then Exelon CEO John Rowe borrowed a line from the movie ‘Princess Bride’ saying it was “inconceivable” to proceed with Calvert Cliffs III, an Areva 1600 MW EPR, due to similar conditions in Maryland.

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