Luminant in Talks with Mitsubishi Heavy Industries for Supply of Reactors to Comanche Peak Nuclear Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Mitsubishi Heavy Industries Limited (TYO:7011) (MHI) (Tokyo, Japan) will be holding talks with Luminant Generation Company LLC (Dallas, Texas), a subsidiary of Energy Future Holdings Corporation (Dallas), for the supply of two1,700-megawatt (MW) reactors for the expansion operations planned at the Comanche Peak nuclear plant in Somervell County, Texas.

Claimed to be the world's largest nuclear reactor, the U.S. variant of the 1,700-MW advanced pressurized water reactor (APWR) has been designed on the lines of MHI's 1,538-MW APWR model, installation of which is proposed at the Tsuruga power station of Japan Atomic Power Company (Tokyo).

The U.S.-APWR model has a few custom features that have been incorporated to meet the regional requirement for enhanced performance. The reactor unit has been designed to achieve high thermal efficiencies of about 39%, the highest in the world to date. Also, the plant's building volume has been cut down by 20%. A 24-month fuel cycle, a high-performance reactor core capable of handling uranium-plutonium mixed oxide fuel, long-cycle operations, larger key components, larger instrumentation and control systems, and integrated safeguard systems are some of the key factors that characterize the unit. Belonging to the third-generation light water reactor fleet, the APWRs offer increased reliability, safety and economy in addition to being easily operable and eco-friendly.

In a bid to double earnings from its nuclear ventures, MHI has embarked upon a plan to market the 1,700-MW APWR variants in both Europe and the U.S. To this effect, the firm established Mitsubishi Nuclear Energy Systems Incorporated (MNES) (Washington, D.C.) in 2006. MNES will be responsible for attracting greenfield and replacement orders from power producers in the U.S. and will exist apart from the sales promotion and public relations of MHI's nuclear business.

MHI and Luminant, along with their joint venture entity, Comanche Peak Nuclear Power Company LLC (CPNPC), and MNES recently signed a non-binding agreement to decide on the procurement, engineering and preliminary construction plans for the proposed expansion of the Comanche Peak nuclear power plant. MHI has a stake of 12% in CPNPC, which will oversee the construction and development of the proposed units. CPNPC will also finance the expansion program apart from operating the new reactors.

Luminant, which owns a share of 88% in CPNPC, selected MHI's APWR model for units 3 and 4 of the Comanche Peak power plant from among other prospective nuclear technologies evaluated in 2007. In December 2008, Luminant had applied for a combined operating license to build and operate the third and fourth units of the nuclear power plant. The U.S. Nuclear Regulatory Commission (NRC) is expected to review the application by December 2011. The NRC is at present processing MHI's design certification application for the U.S.-APWR, which is also expected to be cleared around the same time.

MHI is expected to sign the final agreement with Luminant for the design and supply of reactors by June 30, 2012. The nuclear plant is slated to commence operations anytime between 2015 and 2020. Meanwhile, the stakeholders of the venture have decided to continue negotiations with U.S. and Japanese financial firms such as Nippon Export and Investment Insurance (Tokyo) in order to obtain the required funds for the project.

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