NRG to Spend $16 Billion on New Generation -- Including Two New Nuclear Reactors

Just off the wire this morning -- from NRG's press release (not available online):

NRG Energy, Inc. (NYSE: NRG) today announced plans to develop approximately 10,500 megawatts (MW) of new generation capacity over the next decade to help meet the energy needs of its high-demand, capacity-constrained markets and to support NRG's continued growth. This repowering initiative, which will be funded with the support of partners and project finance debt, would represent a total investment of $16 billion.

With this repowering initiative, NRG will:

• Enhance its dispatch mix with almost 8,000 MW of new baseload capacity --– including 2,700 MW of nuclear --– and 2,500 MW of new, highly efficient intermediate and peaking capacity;

• Further diversify its fuel mix and reduce reliance on higher-priced, imported fuels, not only through its solid fuel repowerings, but also through the acquisition of a new wind development company with wind projects in active development in Texas and California;

• Create thousands of new construction jobs and 1,500 permanent jobs; and

• Reduce the carbon intensity of NRG's baseload fleet by 20-25 percent.

Those 2,700 MW will come in the form of two additional reactors at the South Texas Project. Also from the press release:

On June 19, 2006, NRG filed a letter of intent with the Nuclear Regulatory Commission to construct 2,700 MW of nuclear power at the existing South Texas Project (STP) nuclear facility...

(snip)

Construction of Units 3 and 4 is expected to cost $5.2 billion, creating approximately 3,000 construction jobs per unit during the peak construction period and an additional 500 new operating staff positions per unit. Our development plan for each of the new nuclear units is expected to create over $9.2 billion of economic activity for the State and result in 5,600 new permanent jobs statewide.

NRG will proceed with permitting and development of new nuclear power generation at STP based on ABWR nuclear power plant technology, which is proven in design and construction and has a track record of reliable and safe operation. NRG filed its letter of intent to submit an application with the Nuclear Regulation Commission on June 19, 2006 to construct two new ABWR units at STP. The ABWR technology is the most advanced nuclear technology in operation in the world today with a history of on time, on budget construction in Japan. The General Electric Company's ABWR design has been certified by the U.S. Nuclear Regulatory Commission. It is NRG'’s intent to work with GE and Hitachi,(which has been involved in developing and constructing four ABWR plants in operation in Japan) as well as GE's other international team of suppliers with experience in successfully constructing ABWR nuclear power plants.

"“Nuclear power is an important part of the continued development of our baseload fleet in Texas,"” said Steven Winn, NRG'’s Executive Vice President and President, Texas Region. "We recognize the need for new, low-cost generation and we recognize the importance of reducing the emissions profile of power generators within the growing ERCOT market."”

For more on the ABWR design from Wikipedia, click here. This past January, our CEO Skip Bowman delivered a speech at the Houston Forum on why America needed more nuclear generating capacity where he said the following:

In 2004, South Texas Project and Comanche Peak produced about 11 percent of the state's electricity.

Replacing the South Texas Project (STP) and Comanche Peak generating capacity with fossil fuel sources would mean an additional 31.6 million tons of carbon dioxide. That'’s the equivalent of emissions from six out of every seven cars in the state.

By building emission-free generating capacity such as new nuclear power plants to meet growing electricity demand, we reduce the clean-air compliance costs that otherwise would fall on other types of generating capacity that do produce emissions. Nuclear power plants create headroom underneath emissions caps for the industrial sector and for transportation, and to allow continued economic growth.

To the extent we build new nuclear power plants, we also reduce the demands placed on natural gas supply. This time last year, as many of you know, the Texas Institute for the Advancement of Chemical Technology proposed construction of a new nuclear power plant in the Texas Gulf Coast region. That study was inspired, in part, by the desire to free up natural gas supplies used in the electric sector for hard-pressed industrial users.

The idea deserves your consideration.

Glad to see the message got through. For more, click here.

UPDATE: Coverage from the Houston Chronicle.

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