The seller and the buyer stand facing each other with a barrel between them and strike a deal. The cash is put on the barrel, the seller takes the cash and the buyer takes the barrel after he paid for it "on the barrel head".
Critics of nuclear energy claim the technology is too expensive and too risky and that investors will stay away. If that was really the case, then the reports that follow would not be happening.
Florida Decisions
CWIP was approved by the Florida state legislature in 2006. Utilities can pass along to rate payers the cost savings of not having huge interest payments on borrowed funds to build new reactors. FPL said it estimates CWIP will save ratepayers $1.5 billion in costs to build its two new reactors.
A week earlier the Florida PSC unanimously approved a request by Florida Power & Light (FPL) for $196 million towards costs of building two new nuclear reactors at the utility's Turkey Point site. The money also will go toward upgrading existing reactors. Assuming the reactors are licensed by the NRC and built by the utility, they could enter revenue service starting in 2022.
In both cases the PSC pointed out that state law requires that once the utilities demonstrate the need for the nuclear reactors, they can proceed with the requests for CWIP. The PSC doesn't authorize the whole cost of each reactor all at once. It grants incremental increases based on cost data provided by the utilities. Also, it has the legal ability to review any of its actions if new information becomes available.
The NRC is on the verge of issuing the design certification for the Westinghouse AP1000 nuclear reactor. The 1,150 MW unit is planned for both the Progress and FPL power stations. Once that happens, it will add certainty the plans for all four reactors since the design certification is a perquisite for the combined construction and operating license the utilities need to build the plants.
Fluor takes $30 million stake in NuScale
Fluor, which is the nation's largest publicly traded engineering services firm, said it is making the investment because it sees demand for less costly nuclear reactors. The firm also said it expects to work on the engineering and construction of NuScale reactors at customer sites.
The action comes following commitments by Fluor competitors Bechtel and Babcock & Wilcox to build a 125 MW light water reactor. That effort has a deal to build a first of a kind unit at TVA's Clinch River site.
NuScale said it expects to submit its design for safety review and certification by the NRC in 2013 and have the first unit in operation by 2020. B&W said its plans for its mPower reactor have a similar time frame. NuScale is based in Corvallis, OR, and B&W is in Lynchburg, VA.
UK sees cash and a renewed loan for large forgings
The German consortium planning to build new nuclear reactors at multiple sites in the UKis planning to allow vendors of nuclear reactors to invest up to {e}5 billion in return for a 25% stake in the projects. E.on and RWE, which form the Horizon Consortium, said the equity option is on the table in terms of whether it chooses Areva or Westinghouse reactor designs for its power stations.The scope of the planned construction is significant on a global scale. Two or three reactors will be built at Wylfa with the first unit scheduled to enter revenue service in 2020. Two or three more reactors will be built at Gloucestershire. Taken together, both power stations will when complete account for 30% of the UK's nuclear based electricity generating capacity.
There is good news for Sheffied Forgemasters which wants to manufacture large forgings for the 19 GWe of planned new nuclear reactors for the UK. The government has decided to offer the firm a loan of {L}36 million to add production capacity to its plant.
This is a scaled down loan from one proposed last year for {L}80 million. The new loan agreement may revive plans by Westinghouse to take an equity position in Sheffied Forgemasters.
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3 comments:
I like the idea of reactor equipment vendors investing in an equity stake in the reactor. That will provide some incentives for keeping the project cost under control and will also provide the vendors with a stream of income for many years.
The real money in nuclear energy is not in building plants and it should not be in maintaining plants if the plants are designed to be as reliable as possible. A well designed and built reactor should have a service organization that is a bit like the Maytag man.
However, operating reactors and producing massive quantities of emission free electricity with a small input of well crafted nuclear fuel is a high margin business in competition with plants that have to burn fossil fuel or plants that can only produce electricity at the whim of the weather.
I don't see how the Florida legislature allowing power companies to tax consumers is evidence of investor support for nuclear. In fact, it is evidence of exactly the opposite.
I would like to see nuclear expansion but not on the backs of everyday consumers with zero guarantees that any plant will ever be built. CWIP is a scam and the Florida legislature is beginning to regret their 2006 vote and Florida residents are irate!
I have one slight conceptual problem with the CWIP idea.
I do understand that it helps save money, and helps rate payers to pay lower rates. . . in the FUTURE.
The rate payers will not see the benefit of those lower rates for 10 or 20 years.
Many of today's ratepayers in a given market won't be ratepayers in that market in 10 or 20 years. They move. They die.
So, you are basically forcing today's ratepayers to subsidize the rate payers in 10 or 20 years, and you are forcing ratepayers to pay money, which will probably never be returned to them, so that someone else (the utility) gets an ownership stake in a very valuable nuclear reactor.
If you are going to use CWIP financing, then every rate payer should get stock in the utility, so that they are getting something to represent their "investment" in the utility. Better yet, the utilities should go to the public markets or private equity to get financing and not use the power of government to force other people to make investments they don't want to.
I'm pro-nuclear, but very much anti-CWIP because of the injustice of the scheme.
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