№6 June 2009
Four power companies are expected to split $18.5 billion in federal financing to build the next generation of nuclear reactors -- the biggest step in three decades to revive the U.S. nuclear industry and one that could vault the utilities ahead of some of the sector's strongest players. The four were chosen from an original pack of 17 companies that had proposed over $122 billion in guarantees and subsidies for consideration by the U.S. Department of Energy.
UniStar Nuclear Energy and NRG Energy Inc., two companies with business models based on commercial reactor production, along with Scana Corp and Southern Co., two utilities, are expected to share a set of loan guarantees to be awarded by the Energy Department. The guarantees would enable the companies to start building the reactors as early as 2011, with the plants likely to come online by 2015 or 2016.
Three of the four winners will be employing Toshiba-built reactor technology in their plans; only UniStar, a joint venture between France’s AREVA and Baltimore’s Constellation Energy, will use the AREVA-produced European Pressurized Reactor (EPR). The EPR is marketed in the U.S. under the name Evolutionary Power Reactor.
AREVA already notches around $13.5 billion in annual sales with EPR’s predecessor technology including an $11.9 billion contract with the PRC to supply nuclear power generation technology to that country’s hungry domestic electricity sector.
A notable loser in the quest to secure U.S. Government-backed loan guarantees is the GE Hitachi joint venture. As disappointing as it may be to miss out on government loan guarantees, the company is not suffering from wont of business outside of the U.S. In May 2009 construction firm Larsen & Toubro announced the signing of a memorandum of understanding with GE Hitachi to handle buildouts for the 10,000 MW capacity that the latter company has already contracted with the government of India.
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