The Babcock and Wilcox Co. has invested more than $360 million in a project that could result in a small nuclear reactor at the former Clinch River Breeder Reactor Site in west Oak Ridge, pictured above. (Photo courtesy Tennessee Valley Authority)
The Babcock and Wilcox Co. has already invested more than $360 million in a project that could result in a small nuclear reactor in west Oak Ridge, and now the North Carolina company is looking for investors and possibly majority owners.
The mPower small modular reactor, or SMR, program is expected to have a nuclear power plant operating at the former Clinch River Breeder Reactor Site by 2022. Initially, it could have two small reactors, a “twin pack,†and produce 360 megawatts.
On Wednesday, Marshall Cohen, B&W vice president for government affairs and communications, said the company is seeking major corporations who are interested in taking a “strong position,†up to and including ownership, including majority ownership.
“We would reduce our ownership to one that really matches the scope of work going forward,†Cohen said.
B&W’s specialty is nuclear fuel and the “nuclear island†of manufacturing, the heart of the reactor, he said. B&W would retain the rights to manufacture the reactor module and nuclear fuel.
A 15 to 20 percent ownership in the project would make sense for B&W, Cohen said.
“That’s the place that would be good for us,†he said.
Conceptual drawing of an underground containment structure housing two B&W mPowerâ„¢ reactor modules. (Image courtesy B&W)
In a press release, B&W President and Chief Executive Officer E. James Ferland called the search for more equity partners the next logical step in program development.
“Now is the time to bring in the right kind of investment,†Cohen said in a telephone interview. “It’s time to put this piece together.â€
He said possible majority owners could be firms in the nuclear industry, industrial manufacturing, or defense. JP Morgan is serving as B&W’s financial adviser to help find investment partners. That company has been involved in 80 percent of the major nuclear deals in the past 15 years, Cohen said.
“They know what this is about,†he said. “They know how to do this.â€
Cohen said B&W hopes to know more about potential investors in the first quarter of 2014.
The new investment partners would collectively own the majority equity interest in a joint development company called Generation mPower LLC, or GmP, which was formed by B&W and Bechtel in 2010, the press release said.
“mPower has evolved to the point where we need to complete the maturation of GmP,†said Christofer Mowry, Generation mPower president and chief executive officer. “Having a broader set of industrial partners and owners of GmP is important to ensure that we make a seamless transition into mPower licensing and construction—a transition that will begin over the next year as we start the formal design certification process with the U.S. Nuclear Regulatory Commission.â€
The small reactor project also involves the U.S. Department of Energy and Tennessee Valley Authority, the lead plant customer.
Federal officials agreed this summer to spend another $20.5 million on the project through what is known as the Small Modular Reactor Licensing Technical Support Program. DOE had earlier allocated $79 million when a formal agreement with B&W mPower was signed in April, and the federal government had also given about $2 million to national laboratories to perform important analyses and evaluation work. The new spending agreed to this summer brought the total DOE investment to $101 million during the initial project period.
Cohen said B&W wants to focus on making the first few reactors operational.
“We believe it’s a game-changing technology,†he said.
Ferland said B&W and its team have elevated the mPower program to a leadership position in the development of SMRs to meet domestic and global market demand.
“mPower is uniquely positioned to shift the paradigm for new nuclear plant deployment, and we are proud that mPower is leading this exciting global business opportunity,” Ferland said.
William Cramer says
I have heard this project was a big motivation for all the recent development in Oak Ridge. That’s why there was suddenly some urgency to get the mall updated, add new restaurants and businesses, and get the Kroger Marketplace/Lowes deal done. I have no idea if that’s true or not, but to me it kind of makes sense. They want to make Oak Ridge look like it’s on the rise to attract investors to make this project happen. I’m all for it.
Ben Smith says
Who are “they”? It certainly can’t be the city. The city has been trying to attract business (get a new mall owner, get a Target store,etc -only to be stopped again and again by misguided citizens who think that they are business “experts”) for years. And what “Lowe’s” project? There’s never been a whisper from any legetimate source that Lowe’s is part of the Kroger project. The misinformation that flows through this town is astounding.
William Cramer says
I apologize I did not do more fact checking. I don’t have access to the sources of information that you apparently do. I wasn’t trying to stir up anything. I had talked to several people who live/work in the area where the Kroger is going and they sounded sure that Lowes was going to move into the lot next to Kroger that stretches from Ivanhoe to Robertsville Rd. Again I’m not trying to spread rumors, I trusted the people I talked to and I have no means of confirming or dispelling the rumor.
I also just thought it was coincidental that we finally found an investor for the mall, we got a Kroger Marketplace, and half a dozen new restaurants in town around the same time this project started gaining traction. Maybe it is a big coincidence and they’re completely unrelated.
Ben Smith says
We got a new Kroger because the Kroger company is moving to upgrade many of their locations (this will be the 4th expansion in OR in the past 30 or so years). We’re getting new restaurants because OR is a good restaurant market – though not all restaurants succeed, even in OR. The current mall owners were perfectly happy with the status quo, as they were probably making money so long as the existing anchors (Penny’s, Sears, and Belks) continued to be in business. As soon as Sears folded and that rental income was lost, the current mall owners became much more interested in getting out. The reactor project is far from a done deal. No company would be making business decisions based on the construction of a brand new nuclear reactor with a new design that doesn’t even have a construction permit (or even investors) yet and even in the best of circumstances won’t be completed for nearly a decade.
William Cramer says
I’m sure you’re right. I’m not quite sure what this issue with my original comment was? I wasn’t trying to spread rumors, just speculation. I apologize if I said something you were offended by.
Ben Smith says
“Speculation” (as you call it) that has no basis in fact can be very damaging to the city’s business future. Let’s take your Lowe’s “speculation” as an example. If the Kroger developer is trying to attract some company to open a store next to Kroger and that company hears that Lowe’s is going into the space, how difficult does that “speculation” make it for the developer? In your first post you start out that “You heard…”, then you proceed to pass on the unfounded rumors. Then you say that wasn’t your intention, yet that is exactly what you did. Why is that so hard to understand?
William Cramer says
Couldn’t the business looking to move in just ask either the city or Kroger if Lowes is coming in next door? Seems to me a simple phone call could straighten out any uncertainty. As fine a website as this is, I sincerely doubt that any developer is getting worked up over idle speculation, rumors, gossip, whatever from this comments section. I also made it clear that I had no idea if my original rumor/speculation/whatever was true or not. I’m sorry you were offended by my comments and that I possibly damaged any development opportunities for the new Kroger Marketplace. I am the manager at the American Red Cross office in Oak Ridge, please drop by any time if you would like an apology in person.
Ben Smith says
Oh, gee, it was an illustrative example about the harm that unsubstantiated “speculation”, aka rumors, could do. Do you always take everything so literally?
William Cramer says
I get it, you think I’m an idiot. Thanks for the discussion though, it was great talking with you.
johnhuotari says
William, I think your comments were fine.
The rumors about the Lowe’s were fairly widespread. I don’t where they originated, but I’ve talked to the Oak Ridge Chamber of Commerce and merchants at Grove Center and neither was aware of any proposed Lowe’s development. There were some people claiming on Facebook that a letter had been sent out to residents in the area north of Ivanhoe Road. If I recall correctly, a chamber rep asked if someone could provide a copy of that letter, but as far as I know, that hasn’t happened.
Lowe’s has expressed interest in building in Oak Ridge before, and that proposal was made public. I think that was in the mid-2000s. I covered that for The Oak Ridger. If I recall correctly, the proposal included a Target, and it would have been split between the area in front of AMSE and the Big Lots shopping center across South Illinois Avenue.
I have not heard of any connection between the proposed small modular reactor and any retail projects here. The SMR was proposed several years ago, when I was still at the newspaper, and most of the retail proposals are newer.
I have heard more people cite the proposed multi-billion dollar Uranium Processing Facility at Y-12 when they discuss some of the new retail and commercial developments in Oak Ridge. Not that they’re necessarily implying that one led to the other, just that the combination of projects suggest an encouraging economic development environment. I have heard some officials connect the UPF to the SMR and other industrial projects such as the carbon fiber plant at Horizon Park when discussing industrial development opportunities.
dtschuck says
With a power hungry customer right next door, this project makes sense, especially with TVA shuttering the worst of their pollution belching coal plants.