WADSWORTH — A lack of investors has led officials to scrap an estimated $15 million project that would have doubled electrical production output at Matagorda County’s largest employer.
Officials with the Toshiba America Nuclear Energy corporation — a U.S. wholly-owned subsidiary of Japan’s Toshiba corporation — announced Thursday plans to withdraw from a project to build two additional advanced boiling water reactor units at the South Texas Project’s Matagorda County site, according to a notice published on Toshiba’s website.
The project’s economic viability has declined due to significantly lower electricity rates stemming from the shale gas revolution, as well as the trend toward tighter regulation of nuclear power plants in the aftermath of the Great East Japan Earthquake, Toshiba officials said in the release.
Additionally, maintaining the project has proven costly and no investors have expressed an interest, despite it receiving combined licenses from the U.S. Nuclear Regulatory Commission, according to the release.
“Under current and expected economic conditions, further development of STP Units 3 and 4 has ceased to be financially viable,” the release stated. “In these circumstances, there is no clear pathway to securing profitability.”
An STP spokesman did not return a voicemail left to his office phone or respond to an email Friday afternoon.
Company officials will cancel all contracts related to Nuclear Innovation North America LLC, which was established by an agreement with NRG Energy Inc. in 2008 for the purpose of building the two additional units, according to the release.
The corporation also will cancel an engineering, procurement and construction contract it signed in 2009 with STP, as well as canceling deferred loans and forgiving loans under loan contracts, the release stated.
Following Thursday’s decision, Toshiba officials intend to meet with the Nuclear Innovation North America board of directors and continue the necessary withdrawal procedures with NRG, according to the release.
The corporation will have completely withdrawn from the project by the end of the year, the release stated.
The Nuclear Regulatory Commission granted permits in February 2016 to the South Texas Project for the construction of the two additional units.
Since the market was not conducive to building the reactors at the time, STP officials planned to hold the licenses and move forward with construction when the time is right, Mark McBurnett, CEO of Nuclear Innovation North America, told The Facts two years ago.
The permits would not have gone into effect until the units were operational, and would not have had to be renewed for 40 years, according to Facts archives.
The plant is Matagorda County’s largest employer, with about 1,200 people on the payroll.
The new units could have created 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 would have doubled that production output, STP officials have said.