WADSWORTH — After almost a decade-long process, the Nuclear Regulatory Commission granted permits to the South Texas Project to build two additional advanced boiling water reactor units at its Matagorda County site, doubling its electric output capacity.
“That’s the benefit from an STP perspective, the fact that we have these licenses is a major milestone or hurdle in the project’s life,” STP spokesman Buddy Eller said.
The Nuclear Regulatory Commission made the final decision to approve the two licenses Tuesday. The decision follows a November hearing in front of the NRC, said Mark McBurnett, CEO of Nuclear Innovation North America, the project’s developer.
“We expect to have the actual licenses signed and in hand later this week,” McBurnett said.
Since the current market is not conducive to building the reactors, STP officials will hold the licenses and move forward with construction when the time is right, McBurnett said. The permits do not go into effect until the units are operational, and do not have to be renewed for 40 years.
“Right now, with low gas prices and the economics of the Texas electric market, it’s not really a time to be building anything, particularly in nuclear,” he said.
Officials estimate the market should be good enough to begin construction in the next few years, with the units projected to be online by the mid-2020s, McBurnett said. STP bases that timeline on the federal government’s long-term projections for energy prices.
McBurnett said the licensing process takes at least four or five years, and having the documents ready cuts down the time frame to begin operations.
In the meantime, McBurnett and his team will continue to work on the business development aspects of the estimated $15 billion project in order to facilitate the proceedings when the market turns, Eller said.
The approval of the licenses helps the developer move past a financial obstacle, as well. Having the permits ready eliminates a measure of uncertainty with investors, McBurnett said.
“It reduces a substantial portion of the overall risk on the investor,” he said.
Also helping to reduce any further delays is the design of the site itself, he said. The facility originally was designed for four units.
“The land, water, transmission infrastructure, that’s all here already in place to support the expansion,” Eller said.
The plant is Matagorda County’s largest employer, with about 1,200 people on the payroll. The new units could create about 800 additional jobs, project officials have said.
STP’s two units produce 2,700 megawatts of carbon-free electricity — providing clean energy to 2 million Texas homes. Units 3 and 4 will double that production output, Eller said.
“They can help meet that base load demand in the future,” he said.
Although the Electric Reliability Council of Texas does not have many details from STP yet, the organization values the addition of energy generators, said Robbie Searcy, communications manager for ERCOT. The council manages the flow of electric power to 24 million Texas customers — about 90 percent of the state’s load.
“We’ll certainly continue to be in discussions with them about what their expectations are for any further development at that location,” she said.
The organization’s current capacity demand and reserve report shows margins currently over the target for the next several years, Searcy said. That report includes other energy expansion projects.
“Right now, our outlook is pretty good,” she said.
Searcy said when the units are completed, it will increase the long-term planning reserve margin in the region. The long-term planning reserve margin is one of the indicators the group looks at for long-term resource adequacy.