While harnessing a clear exit strategy, NRG Energy revealed the sale of its 44 percent stake in a South Texas Nuclear Project outside of Houston, Texas, for $1.75 billion. With tax considerations, both parties say the 1100 MWs will likely be finalized at $1.4 billion.
According to a recent press release, NGR stated the sale proceeds would be utilized for corporate intentions and the repurchasing of common stock. Elliott Associates, an investing interest, has been targeting NGR, and this latest strategy potentially mimics appeasement.
As the largest owner and operator of domestic nuclear facilities, the South Texas Nuclear Project will be a welcomed addition to Constellation’s portfolio. Most of its reactor fleet came from a 2022 merger with Exelon Corporation, a Chicago-based company.
The South Texas Nuclear Project is made up of two Westinghouse four-looped pressurized water reactors, which were put into commercial service in 1988-89. Their operating licenses extend for nearly 20 years, and the units were constructed under a fully regulated entity no longer in existence in the state. Texas has combatted a capacity market; however, a recent vote enabled the state to spend nearly $5 billion on new gas-fired power generation to prop up reliability capability in response to past winter storm issues.
Nuclear power reactors utilize heat created from atomic fission to boil water. The boiled water creates pressurized steam, which is directed through the reactor steam system to turn turbine blades that drive magnetic generators. The end result is the production of electricity. When a neutron contacts a larger atom, nuclear fission takes place. A chain reaction occurs when additional neutrons are released. As each atom splits, a massive quantity of energy is released.
The core of a nuclear reactor contains fuel created from uranium ore, which is mined to be later fabricated into ceramic pellets. The energy produced by each pellet is nearly equivalent to 150 gallons of oil. Pellets are stacked end to end in 12-foot fuel rods, which are loaded into a reactor’s fuel assembly for plant operation.
Nuclear power plants have been responsible for generating approximately 20 percent of domestic electricity since the early 1990s. As of August of this year, 93 nuclear reactors operated at 54 nuclear power plants across 28 states. 19 of the 54 power plants contain one reactor, while 31 depend on two reactors. Only four have three reactors.
The United States alone generates more nuclear power than all other countries. As of 2021, 33 countries had commercial nuclear power plants. In 15, nuclear energy was responsible for approximately 20 percent of each annual power generation. With the United States being the top nuclear energy producer, France generated the second-largest nuclear electricity generation capacity and the third-highest nuclear electricity generation.
The recent NGR sale only solidifies the U.S. stake in nuclear power. As the country continues to entertain new possibilities in alternate energy sources, nuclear made its way to the domestic portfolio a long time ago. With it serving as a reliable source of power generation, nuclear asset mergers and acquisitions will likely continue to make the news.
Nick Vaccaro is a freelance writer and photographer. In addition to providing technical writing services, he is an HSE consultant in the oil and gas industry with twelve years of experience. Vaccaro also contributes to SHALE Oil and Gas Business Magazine, American Oil and Gas Investor, Oil and Gas Investor, Energies Magazine and Louisiana Sportsman Magazine. He has a BA in photojournalism from Loyola University and resides in the New Orleans area. Vaccaro can be reached at 985-966-0957 or email@example.com.