Last month, TXU
First, the announcement was a severe blow to Westinghouse (which is controlled by Toshiba), because earlier, TXU CEO C. John Wilder had indicated that his company intended to use its advanced pressurized water reactor.
The news was all the more surprising because Westinghouse's reactor design had received final certification from the federal government's Nuclear Regulatory Commission and Mitsubishi's has not.
This suggests that the advantages of Mitsubishi's cost-effective reactors, which can produce 1,700 megawatts apiece, were enough compared with Westinghouse's technology to convince TXU to select the yet-to-be-certified reactor. It further suggests that Mitsubishi's advanced reactors also have some characteristics that make them more appealing than General Electric's
The news is also important because it suggests that as the environmental costs of coal-produced electricity become better-known, nuclear power becomes a more attractive option for producing electricity than coal-fired power plants.
You might recall that environmental groups were very active in the negotiations leading to Kohlberg Kravis Roberts' decision to make an offer to buy TXU, and it's believed they were instrumental in convincing TXU to reduce the number of coal-fired plants it planned to build in Texas from 11 to three.
It's difficult to imagine that these environmentalists were not also consulted regarding TXU's decision to proceed with the construction of two new nuclear plants. If so, it's yet another indication that the U.S. is on the verge of a nuclear renaissance.
And as more nuclear power plants are approved, investors are encouraged to closely monitor which companies are supplying the reactors, because there's big money involved. TXU's order has been estimated to be worth $5.1 billion in revenue for Mitsubishi.
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