Babcock & Wilcox talks small reactors, coal retrofits

Babcock & Wilcox (NYSE:BWC) updated financial analysts Feb. 28 on its efforts to develop a small modular reactor at the Tennessee Valley Authority (TVA) Clinch River nuclear site.

The power industry vendor also updated analysts on the sluggish state of the market for environmental retrofits at existing coal plants in the United States.

B&W CEO James Ferland said finalizing its November 2012 agreement with the U.S. Department of Energy (DOE) award with matching funds should be signed within a few months – and last for five years.

The process might be moving a bit slower following problems with other DOE loan recipients such as Solyndra, Ferland said.

Ferland also said B&W wants to add partners in its mPower small nuclear reactor venture, although he doesn’t expect to announce any partners for a few quarters.

B&W, with its history in U.S. Navy ships, is an emerging international player in the fledgling small reactor market. Its units are designed to be 180-MW and would have a four-year operating cycle.

With the delay of the Cross-State Air Pollution Rule (CSAPR) the U.S. sulfur dioxide scrubber market remains unclear, Ferland said. A federal appeals court vacated CSAPR in the summer of 2012. B&W expects EPA could need up to four years to write a replacement rule.

Bidding for mercury and air toxic standards (MATS) projects is picking up with the approach of a 2015 deadline for the EPA rule, the B&W official said.

Speaking of the U.S. coal market, Ferland said coal plants are again starting to dispatch ahead of gas units in some areas as natural gas prices start to “inch up” from last year’s lows.

During 4Q 2012, B&W was awarded an environmental control equipment contract for an Iowa power plant, officials said.

Company officials said that progress is slow in growing B&W’s nuclear services business.

B&W reported fourth quarter 2012 revenues of $865.3m, an increase of $64.5m, or 8.1% from the fourth quarter of 2011. GAAP earnings per share for the fourth quarter 2012 were $0.33 compared to a loss of $0.53 in the fourth quarter of 2011. Adjusted earnings per share were $0.56 for the fourth quarter of 2012, a decrease of 13.8% from the adjusted earnings per share of $0.65 for the fourth quarter of 2011, excluding the impact in both periods of the mark-to-market adjustments for pension and postretirement plans and non-recurring tax adjustments.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.