The U.S. Nuclear Regulatory Commission (NRC) expects to formally vote March 30 on whether to issue a new combined construction and operating license, or COL, to SCANA (NYSE: SCG) and its partners for two new reactor units at the V.C. Summer station in South Carolina and the Shaw Group (NYSE: SHAW) will be watching closely.
Shaw Group is the engineering, procurement and construction contractor for Summer units 2 and 3, just as it is for the two new reactors being developed at the Vogtle complex in Georgia by a group led by Southern Co. (NYSE: SO) subsidiary Georgia Power. The NRC approved a new plant license for the first time in 30 years when it approved Vogtle units 3 and 4 in February.
The Louisiana-based Shaw Group is an EPG giant that is involved in construction, retrofits and maintenance at coal, gas and nuclear plants internationally.
Shaw Chairman, President and CEO J.M. Bernhard Jr. told analysts during a March 29 quarterly earnings call that Shaw recently landed a contract to perform maintenance on eight fossil fuel plants in Arizona Public Service’s fleet. Shaw Group already had a similar deal for maintenance and upkeep for nuclear units operated by APS, which is a subsidiary of Pinnacle West Capital (NYSE: PNW).
Shaw Group now has service agreements with eight fossil power plants in the United States and 44 of the nation’s 104 operating nuclear reactors. It hopes to more than double its coal plant outage business in the next couple of years, Shaw officials said.
Shaw said it continues to anticipate a rebound in the air quality control market with new awards expected within the next 12-18 months for the scrubber market, as well as new-build gas plants in the U.S. and selective coal opportunities internationally. As previously announced, received full notice to proceed on Entergy’s (NYSE: ETR) Ninemile combined-cycle gas project in Louisiana.
While some previously idle domestic natural gas plants are being dispatched more these days, Bernhard said Shaw expects a slow, steady growth in construction of new gas-fired power plants in the next 10 years. This is because cheap natural gas is revamping the power market, the executive said.
Bernhard called the U.S. market for power generation increases or “uprates” at existing nuclear plants is very robust. Internationally, several counties such as Saudi Arabia are planning to build new nuclear power plants. The Shaw Group is interested in the market for small modular reactors but expects that SMR commercialization is probably a decade away.
Shaw Group and V.C. Summer owners, SCANA’s South Carolina Gas & Electric and Santee Cooper had hoped to receive the new nuclear plant license a few months earlier but it’s not a major delay, Bernhard said.
Because of the Fukushima disaster in Japan, the work involved in building new U.S. nuclear plants could be increased incrementally, Shaw officials said.
On the new coal power plant front, Shaw officials said the company has nearly completed two new U.S. coal plants, including Dominion’s (NYSE: DOM) Virginia City Hybrid facility in Virginia.