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Energy Harbor Sells Four Reactors to Texas Holding Company
- Mar 12, 2023 9:23 pm GMT
- Energy Harbor Sells Four Reactors to Texas Holding Company
- France / 10 European Countries Join Macron’s Push To Promote Nuclear Power
- France’s CEA Spins Off Two Companies For SMR Development
- NuScale Power Places First Long Lead Production Order with South Korea’s Doosan
- X-energy to Open First Plant Support Center for Xe-100 SMR
- Poland / Private Project To Build South Korean Reactors At Patnow Coal Site
- Uganda Inks Deal with China for New 1000 MW PWR by 2031
Energy Harbor Sells Four Reactors to Texas Holding Company
Vistra Corp (NYSE:VST) announced this week it is to acquire Energy Harbor Corp, formerly FirstEnergy, which it intends to merge into a new zero-carbon generation and retail subsidiary called Vistra Vision.
The giant corporate acquisition is one of the largest nuclear energy deals of its kind in recent years putting a lot of energy eggs in one basket.
FirstEnergy, rebranded and reorganized as as Energy Harbor (ENGH:OTC) operates the Beaver Valley nuclear power plant (2 reactors) in Pennsylvania and the Davis-Besse and Perry nuclear plants, both in Ohio. Vistra subsidiary Luminant operates the twin reactors at the Comanche Peak nuclear power plant in Texas. The companies anticipate closing the transaction in the second half of 2023, subject to regulatory approvals, which will include transfer of the current NRC licenses to the new owners.
Vistra Vision will combine Energy Harbor’s nuclear and retail businesses with Vistra’s nuclear and retail businesses and Vistra Zero renewables and storage projects. Energy Harbor’s legacy conventional generation fleet is not included in the sale. Energy Harbor has previously signed definitive agreements to sell these assets to third parties.
Vistra said the nuclear plants, and other Energy Harbor assets, will become part of Vistra Vision, a business unit that will have 7,800 MW of zero-carbon generation capacity, about five million customers across the country, and access to renewable energy projects for additional capacity.
Vistra Deal by the Numbers
The deal’s total compensation will consist of $3 billion cash and a 15% equity interest in Vistra Vision, with most Energy Harbor shareholders receiving cash at closing. Energy Harbor’s two largest shareholders, Avenue Capital Group and Nuveen, are to receive a combination of cash and the 15% ownership interest in Vistra.
Vistra Vision also will add $3.4 billion in debt, according to a company statement. Vistra will also assume about $430 million of net debt from Energy Harbor in the transaction. The firm comes to the deal carrying a market capitalization of $9.35 billion.
Vistra stated it intends to finance the majority of the $3 billion of cash consideration through debt financing, with all or a portion of the debt expected to be invested in Vistra Vision via an inter-company loan.
It’s a great deal for Vistra. Four new nuclear reactors could cost $8-10 billion each for a total of $32-$40 billion. By comparison, Vistra is paying $3 billion in cash (new debt), offering current investors a 15% equity stake equal to $1.4 billion, and assuming $0.43 billion in debt from Energy Harbor, for a total of $4.83 billion or roughly 12% of the cost of four new reactors.
The company’s strategy to own and operate new capacity is no different than a giant brewery snapping up smaller ones to gain market share without having to build new plants from scratch.
Morningstar describes VISTRA Energy, based in the Dallas, TX, metro area, is one of the largest power producers and retail energy providers in the U.S. Excluding the Energy Harbor acquisition, Vistra owns and operates 38 gigawatts of nuclear, coal, natural gas, and solar power generation. Its retail electricity segment serves 4.3 million customers in 20 states. Vistra’s retail business serves almost one third of all Texas electricity consumers.
FirstEnergy’s Scandal Ridden History
The planned transaction will bring to a close Energy Harbor’s (formerly FirstEnergy) presence in Ohio as a corrupt corporation. It has admitted to the US Department of Justice it paid bribes to multiple elected officials and the chairman of the Ohio Public Utilities Commission (PUC) in return for passage of legislation that provided subsidies for its nuclear power plants and for favorable rate rulings by the PUC.
Former state House Speaker Larry Householder and former Ohio Republican Party Chair Matt Borges were convicted in Federal District Court on March 9th in a $60 million bribery scheme that federal prosecutors have called the largest corruption case in state history. Both men face up to 20 years in prison. The verdict was announced following a trial that began on Jan. 23 before Senior U.S. District Judge Timothy S. Black.
During the seven week trial jurors were presented with firsthand accounts of the alleged scheme, as well as stacks of financial documents, emails, texts and wire-tap audio recordings.
A jury in Cincinnati found the two guilty of conspiracy to participate in a racketeering enterprise involving bribery and money laundering after nine hours of deliberations over two days. Two defendants previously pleaded guilty to their roles in the bribery scheme along with a former dark money group, while a third died by suicide.
U.S. Attorney Kenneth Parker said the government’s prosecution team showed that “Householder sold the Statehouse, and thus he ultimately betrayed the people of the great state of Ohio he was elected to serve.” He called Borges “a willing co-conspirator.”
The Ohio news media has called it the most elaborate and extensive bribery scandal in the history of Ohio politics, with $60 million in bribes paid by FirstEnergy, one of the nation’s largest investor-owned electric systems, to influence legislation in Ohio to get their customers to bail out two failing nuclear power plants.
The conspiracy involved nearly $61 million in bribes paid to a 501(c)(4) “dark money” entity to pass and uphold a billion-dollar nuclear plant bailout.
According to court documents and trial testimony, from March 2017 to March 2020, the enterprise traded millions of dollars in bribery campaign donations in exchange for Householder’s and the enterprise’s help in passing House Bill 6. The defendants then also worked to ensure that Ohio legislative bill HB 6 went into effect by defeating a ballot initiative to overturn the legislation.
In March 2017, Householder began receiving quarterly $250,000 payments from the related-energy companies into the bank account of his 501(c)(4) political action committee called Generation Now. Householder and his team spent millions of the company’s dollars to support Householder’s political bid to become Speaker, to support House candidates they believed would stand by their pledges to back Householder, and for their own personal benefit.
DOJ detailed that Householder spent more than half a million dollars of the dark money to pay off his credit card balances, repair his Florida home, and settle a business lawsuit. Borges used approximately $366,000 for his personal benefit.
The other parties involved include former Ohio Speaker of the House Larry Householder, Householder’s political staffer Jeffrey Longstreth, former FirstEnergy CEO Chuck Jones, former FirstEnergy senior vice president for external affairs Michael Dowling, former chair of the Public Utilities Commission of Ohio (PUCO) Sam Randazzo, Cleveland business owner Tony George, lobbyist and former chair of the Ohio republican party Matt Borges, Ohio lobbyist Juan Cespedes, and deceased Ohio lobbyist Neil Clark.
FirstEnergy later admitted to its role in the corruption and fired six top executives including CEO Chuck Jones. The State of Ohio eliminated surcharges for taxpayers in a partial repeal of the legislation. However, other parts of HR6 remained on the books including a subsidy for an unrelated coal fired power plant and the gutting of support for renewable energy projects.
PUC Chairman also Bribed
Separately, the US Justice Department investigated whether a $4M payment to the now former head of the State Public Utility Commission was intended to influence his decision making relative to the utility’s filings with the PUC. In July 2021 FirstEnergy said it bribed a regulator for $4.3 million.
FirstEnergy admitted in court documents it paid the state’s top utility regulator $4.3 million to use his position to save the company hundreds of millions via favorable administrative rulings. It previously had paid him a reported $22M in consulting fees in prior years.
The company’s allegation against Sam Randazzo, the now former chairman of the Public Utilities Commission of Ohio, came in a deferred prosecution agreement in July 2021with the U.S. Attorney’s office. FirstEnergy agreed to pay a $230 million criminal penalty and admit to a lengthy statement of facts about its conduct. So far Randazzo has not been charged with a crime. He has resigned from the PUC.
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France / 10 European Countries Join Macron’s Push To Promote Nuclear Power
(NucNet) France is making an aggressive push to promote nuclear power in the European Union, persuading 10 countries to join an alliance calling on Brussels to do more to back the construction of reactors, a move they argued would help meet climate goals while protecting the bloc’s energy independence.
The move comes amid a dispute between France and like-minded countries who want more EU policies to promote nuclear as a low-carbon energy source, and those like Germany and Spain who say nuclear should not be put on a level footing with renewable energy.
A meeting, convened by French energy minister Agnes Pannier-Runacher on the sidelines of a meeting of EU countries’ energy ministers in Stockholm, discussed the contribution of nuclear energy to climate change goals and energy security, a French official said.
The French government said that at the meeting 10 member states – Bulgaria, Croatia, Hungary, Finland, the Netherlands, Poland, the Czech Republic, Romania, Slovakia and Slovenia – had joined France in reaffirming their desire to strengthen European cooperation in nuclear energy.
Pannier-Runacher said she had a “productive discussion” with her German in Stockholm, but the pair did not resolve their differences. “We do not want nuclear to be discriminated against,” she said.
Call For Nuclear-Based Clean Hydrogen
France, which has historically derived about 70% of its power from nuclear reactors, and the other 10 countries, want more EU recognition of nuclear energy. They are, for example, pushing for nuclear-based hydrogen to count towards EU renewable energy targets.
Nuclear Energy Production of Hydrogen: Image: US DOE
On the other side are countries such as Germany, which is phasing out its reactors, and Spain. They say they acknowledge nuclear’s low-carbon contribution, but that it should not be put on a level footing with renewable energy sources like wind and solar.
Earlier this month the European Commission published rules that could allow some hydrogen produced by nuclear-based energy systems to count towards EU renewable energy goals.
France’s president Emmanuel Macron focused on nuclear energy in late 2021 with a €50 billion plan to renew some of France’s ageing nuclear reactors from 2035, and, significantly, to build six new 1600 MW EPRs.
Pannier-Runacher told Les Echos newspaper this week she had asked industrial groups whether building more than 14 reactors by 2050 was feasible.
In a sign of Macron’s commitment to the issue, he used a video address this week to urge the European Investment Bank to break wih its past lending practices to finance all “low carbon technologies at our disposal, including nuclear”.
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France’s CEA Spins Off Two Companies For SMR Development
(WNN) The French Alternative Energies and Atomic Energy Commission (CEA) has spun off two nuclear start-ups – Hexana and Stellaria – for the development of small modular reactors (SMRs).
Hexana aims to develop an SMR featuring a sodium-cooled fast neutron reactor, integrated with a high temperature storage device. A plant would comprise two of these reactors (400 MWt each) supplying a heat storage device. An adjoining conversion system will allow it to produce electricity on demand and in a flexible manner to compete with gas-fired power plants, but also to supply heat directly to nearby energy-intensive industries. (Image: GEN IV)
CEA said fast neutron and sodium-cooled reactors are of “major interest in the management of nuclear materials: they operate without natural or enriched uranium but with depleted uranium combined with plutonium from reprocessed fuel from the French nuclear fleet in the form of mixed oxide fuel (MOX).
It added: “These reactors will thus contribute to energy sovereignty and to the reduction of the volumes of high-level nuclear waste in a logic of closing the nuclear fuel cycle.”
Stellaria aims to develop an energy system based on a chloride molten salt reactor (MSR). The reactor proposed by Stellaria will be very compact – measuring 4 cubic metres – and, like Hexana, will be able to use a diversified range of nuclear fuels (uranium, plutonium, MOX, minor actinides, even thorium), “thus fitting perfectly into the French strategy of closing the cycle.” The reactor will produce 250 MWt.
The CEA intends to find partners beyond the nuclear sector for these two start-ups, which will be able to apply for the France 2030 call for “innovative nuclear reactors” projects: a program endowed with EUR500 million (USD534 million) which will part of the government’s desire to close the nuclear fuel cycle.
In addition, Macron said EUR1.0 billion will be made available through the France 2030 re-industrialization plan for France’s Nuward small modular reactor project and “innovative reactors to close the fuel cycle and produce less waste”. He said he had set “an ambitious goal” to construct a first prototype in France by 2030.
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NuScale Power Places First Long Lead Material Production Order with South Korea’s Doosan
NuScale Power Corporation (NYSE: SMR), announced that at the end of 2022, as scheduled, it placed the first upper reactor pressure vessel (RPV) long lead material (LLM) production order with Doosan Enerbility (Doosan), a manufacturing and engineering company based in South Korea.
The order includes key materials necessary for NuScale’s clean-energy technology, the NuScale Power Module, and is a significant step toward commercialization. (Image: NuScale)
The order is for materials essential to commence manufacturing of the first NuScale Power Modules that are scheduled to be in commercial operation at the Utah Associated Municipal Power Systems’ Carbon Free Power Project as early as 2029. In addition, NuScale and Doosan are aligned to manufacture additional modules for future NuScale VOYGR SMR power plant projects with similar delivery dates.
In preparation for the long lead order, NuScale and Doosan initiated an effort in April 2022 to complete the manufacturing for the forging dies for the upper RPV. Building on this completion, the new LLM order includes heavy forgings, steam generator tubes, and weld material for six upper RPVs. The total estimated weight of the materials for six upper RPVs is more than 2,000 tons.
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X-energy to Open First Plant Support Center for Xe-100 Advanced Small Modular Reactor Fleet
X-Energy Reactor Company, LLC announced plans for its first Xe-100 reactor fleet management, monitoring, and training facility in Frederick, Maryland. Called the Plant Support Center-East (PSCE), this regional center marks the first step in X-energy’s Commercial Operations Services business and will support the initial deployment of the Company’s advanced modular reactor plants.
X-energy recently announced plans to install its first Xe-100 reactor at one of Dow’s U.S. Gulf Coast sites. X-energy’s PSCE will support training and operations for that plant, as well as subsequent owners and operators of the first Xe-100 plants. The Company will open additional regional centers to support a growing reactor fleet, which will become hubs for X-energy’s operations, maintenance, and training services business.
A 3D rendering of a high-fidelity main control room simulator which integrates real-time plant instrumentation and control systems with X-energy’s custom 3-D virtual reality environment.
The PSCE’s centerpiece is a high-fidelity main control room simulator that integrates real-time plant instrumentation and control systems with X-energy’s custom 3-D virtual reality environment. This innovative technology builds on more than two years of work in partnership with the U.S. Department of Energy’s Advanced Research Projects Agency–Energy (ARPA-E) and the Electric Power Research Institute (EPRI) to develop an innovative “digital-twin” maintenance lab and a U.S.-based, continuous fleet monitoring and diagnostics initiative.
X-energy is combining this technology with artificial intelligence and machine learning into a suite of proprietary tools called Xe-100 Data Analytics Tools & Applications, or X-DATA, to improve reliability as well as reduce predictive and preventative maintenance costs for X-energy’s customers.
A 3D rendering of a high-fidelity main control room simulator which integrates real-time plant instrumentation and control systems with X-energy’s custom 3-D virtual reality environment
As the Xe-100 fleet grows, regional centers will be expanded to provide support services to Xe-100 owners and operators, offering business services in areas such as plant diagnostics, maintenance planning, outage scheduling, supply chains, human resources, and regulatory compliance.
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Poland / Private Project To Build South Korean Reactors At Patnow Coal Site
(NucNet) Polish private energy company ZE PAK and state-controlled Polska Grupa Energetyczna (PGE) have signed an agreement to establish a joint company to manage the proposed deployment of an APR-1400 power station in Poland.
A joint statement by the companies said that the new entity will carry out a feasibility study, site survey, and environmental impact assessment in preparation for construction of at least two, and as many as four, South Korean APR-1400 pressurized water reactor units. They said the first unit of the proposed power station could be online as early as 2035.
In October 2022, ZE PAK and PGE signed a letter of intent with Korea Hydro and Nuclear Power (KHNP) for eventual deployment of the company’s APR-1400 PWR technology at the Patnow coal-fired generation site, owned by ZE PAK.
The project is to be developed as a private initiative and would not be run by the government under its central 2020 nuclear energy program, although PGE is majority-owned by the Polish state.
PGE and ZE PAK said they will each have a 50% share in the new company. The move will be subject to regulatory approval before taking effect later this year.
The companies said two APR-1400 PWRs at Patnow could provide Polish homes and businesses with about 22 TWh of electricity or about 12% of today’s power consumption in Poland. Patnow is close to a key national power hub and this is expected to minimize losses related to energy transmission and enable the optimal use of the power grid, PGE and ZE PAK said.
In November 2022 Poland chose Westinghouse to supply and build its first nuclear power plants, but France’s EDF and KHNP are still potentially in the running for a second phase of new-build being. Both companies had offered bids to build Poland’s first reactors. The government’s program expect to see Poland’s first nuclear station built by US-based Westinghouse Electric in the Pomerania region of northern Poland.
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Uganda Inks Deal with China for New 1000 MW PWR by 2031
(Reuters) – Uganda said on Thursday it expects to start generating at least 1000 megawatts (MW) from nuclear power by 2031 as it moves to diversify its sources of electricity and accelerate its energy transition, a key part of its climate change response.
Uganda has uranium deposits and President Yoweri Museveni has said his government was keen to exploit them for potential nuclear energy development.
The east African country has signed a deal with China under which the China National Nuclear Corporation (CNNC) would help Uganda build capacity in the use of atomic energy for peaceful purposes.
Energy and Minerals Minister Ruth Nankabirwa Ssentamu told the Reuters wire service the first nuclear project, Buyende Nuclear Power Plant, would be located at Buyende, about 150 km (93 miles) north of the capital Kampala. The best site will likely be on the shore of nearby Lake Yyoga.
“Preparation to evaluate the Buyende Nuclear Power Plant site is ongoing to pave the way for the first nuclear power project expected to generate 2,000 MW, with the first 1000 MW to be connected to the national grid by 2031,” she said.
The cost of the first unit, which will likely be a 1000 MW PWR type Hualong One, is said to be $10 billion based on a 2022 estimate.
Uganda has an installed generating capacity of about 1,500 MW but officials say they expect the country’s energy needs to jump in coming years as earnings from oil exports fuel an economic boom.
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