Hitachi inks contract with URS but for what?
May 20, 2009 (Victoria Advocate - McClatchy-Tribune Information Services via COMTEX) -- Exelon Nuclear has denied reports that a company was selected to build the proposed Victoria County plant. Reuters reported May 14 that Hitachi signed an engineering, procurement and construction contract (EPC) with URS Corp. to build the proposed plant.
"It's not true," said Craig Nesbit, an Exelon spokesman. "We haven't signed anything with anybody."
Exelon has an agreement with Hitachi to perform preplanning services such as licensing and cost estimating, Nesbit said.
"That's a huge difference than engineering, procurement and construction," he said.
URS will perform preplanning work under a contract Exelon has with Hitachi. URS is basically an Hitachi subcontractor, Nesbit said.
See updates below 05/15/09, 05/16/09, 05/18/09 for breaking news
And here is the original blog post
Just when you thought Exelon’s new nuclear reactor build at Victoria, TX, was coming off the rails, we spot news that the project is back on track. This week Hitachi hired construction giant URS (NYSE:URS) to build two 1,350 MW ABWR reactors. While none of the parties released information on the value of the contract, if the reactors are priced at $4,000/Kw, the 2,700 MW of electrical generation capacity weighs in at $10.8 billion.
The news this week is giving a lift to URS which is making its first entry into the market of building the new generation of nuclear power plants. URS Chief Martin Koffel announced the deal, but declined to provide any other details about it. It is known that once the reactors enter revenue service they will supply electricity to San Antonio, Houston and other cities in Texas.
This is also good news for the small Texas community which last November saw Exelon, the utility that wants the reactors, bid goodbye to the GE-Hitachi ESBWR, an untested 1,560 MW reactor.
A combination of problems between GE and the NRC in completing the design certification review of the new ESBWR reactor caused Exelon’s DOE loan guarantee application to be ranked near the bottom of the pile. The Department of Energy, reckoning that the ESBWR was not ready for prime time, or for market, told Exelon it was no longer in the running for the loan coverage.
Subsequently, Exelon chose the older, but certified ABWR design. Exelon must modify its NRC license application to reflect the change in reactors. Even so Exelon is proceeding without the loan guarantee coverage. DOE has in the meantime selected four other projects for its short list.
While Victoria, TX, Exelon, and Hitachi are all celebrating their giant leap forward, an industry analyst told Reuters the bad news is the Obama administration has a “nebulous” policy toward nuclear energy. The analyst said nuclear energy “offers a clear path to reducing carbon emissions.” Deep in the heart of the Texas gulf coast, everyone concerned knows the second part to be true.
Update 05/15/09
In the department of one hand not knowing what the other is doing comes this report via Platts. Exelon will "delay or cancel" plans to build two reactors in Texas because that project was not among final four selected by DOE for the first round of loan guarantees.
Exelon Chairman/CEO John Rowe said in a speech at the National Press Club in Washington May 15 . . .
Getting sustained support for new nuclear power in Congress "will remain avery difficult challenge until large majorities of both parties conclude thatit's needed," he said. However, "more and more people will come to realize"that any low-carbon generation strategy that is "competitive and effective"must "include a large component of nuclear energy."
File this under the general heading of WTF given the Reuters report of 05/15/09 that said the reactor vendor has inked an EPC contract for two reactors. I'll post additional updates as I get them.
Update 05/16/09
If you think some folks aren't talking to each other, you might be right, or someone isn't reading Platts or the Houston Chronicle, which had the same news. The latest news is that Martin M. Koffel, Chairman and CEO of URS, said on May 15 at the URS Corporation Q1 2009 Earnings Call transcript his firm has a deal with Hitachi at the Victoria, TX site. Here it is.
"We’re currently supporting three major generation III nuclear technologies; the advanced boiling water reactor, the economic simplified boiling water reactor, and Mitsubishi Heavy Industries advanced pressurized water reactor.
In fact, we’re pleased to announce that URS has signed an agreement with Hitachi to provide licensing, cost estimating, and scheduling services for Exelon’s proposed two unit nuclear power plant in Victoria, Texas. Hitachi has been selected by Exelon to participate in this new plant using the advanced boiling water reactor technology.
Preliminary work will be conducted over the next several months, and then as the project proceeds, URS has an exclusive agreement with Hitachi to provide engineering procurement and construction services for the two nuclear units."
Whatever is going on doesn't make sense. On one hand Exelon is saying it plans to cancel the project, and on the other URS, says they are going to build it. Stay tuned.
Update 05/18/09
In response to the previous updates, an expert observer of the nuclear industry wrote in an email to this blog,
"Now from a regulatory standpoint, it's likely Exelon will go ahead with the COL application, and needs Hitachi and its subs (including URS) to develop the safety and engineering design for the application, a required exercise under Part 52. It's likely Exelon will go forward with the application, given that the COL doesn't require any actual construction to occur. The license lasts for 20 years and can be renewed, so they can hold onto the paper and wait out the financial situation."
"Rowe seems to have his nuclear ambitions in South Texas trained on NRG and the South Texas Project. He can have Victoria when STP 3 & 4 are built. "
Comments anyone?
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