December 5, 2023

NRG Abandons Project for 2 Reactors in Texas

But the project — planned by NRG, a New Jersey-based independent power producer, and its minority partner, Toshiba — was in considerable doubt even before the accident at Fukushima began on March 11. Texas has a surplus of electricity and low prices for natural gas, which sets the price of electricity on the market there.

The project could go forward if circumstances changed, said David Crane, the chief executive of NRG, but he said the prospect of that occurring was “extremely daunting and at this point not particularly likely.”

The plan was for the South Texas Project 3 and 4 reactors, and was identified more than two years ago by the Energy Department as one of the four candidates for loan guarantees that were authorized by the 2005 Energy Act.

It is the second of the four to die; Calvert Cliffs 3, in Maryland, seems unlikely at this point, because Constellation Energy could not reach financial terms with the Energy Department. The department has granted a conditional loan guarantee to one project in Georgia and may give another to a project in South Carolina.

In a conference call with investment analysts on Tuesday evening, Mr. Crane said that to proceed with the project, the federal government would probably have to institute a “clean energy standard” that would create quotas for nuclear power, as states have already done for wind and solar.

He said that Toshiba, which is writing off $150 million for the project, would continue to pay to proceed with a license application with the Nuclear Regulatory Commission for the time being, on the chance that a new investor could be found. But, he said, “we have concluded that financially, this is the end of the line for us.” If the plant goes forward, he said, “it will have to be funded by somebody else’s resources.”

The public’s appetite for nuclear power projects resembles the situation right after the Three Mile Island accident of 1979, said Charles A. Zielinski, a lawyer in Washington who is a former chairman of the New York State Public Service Commission. Companies now factor in the prospect of higher construction costs, mixed with a slack demand.

The South Texas Project “may have been on the fence already, and Fukushima pushed it over,” Mr. Zielinski said.

Tom Smith, an organizer in Austin with Public Citizen and a longtime campaigner against the project, cited higher construction costs and uncertainty after the Fukushima accident.

“The wheels are starting to fall off the nuclear renaissance,” he said.

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