Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
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the entrance of CBI into the nuclear field with the acquisition of The Shaw
Group, which has an exclusive relationship with Toshiba Corporation related to
the Toshiba Advanced Boiling Water Reactor (ABWR).
evolutionary than revolutionary the ABWR is supposed to be superior other designs
in its light water reactor class.ABWR produces
power by superheating water to the boiling point. The resulting steam is then
used to drive a turbine attached to a generator. Other light water reactors also heat water,
but not to the boiling point.Instead
the heated water is held in a pressurized vessel and the energy generating heat
is exchanged with a lower pressure vessel.It is the heat exchange process that creates steam and drives the
first basic boiling water reactors were produced in the early 1960s. There has
been considerable tweaking of the design over the years, resulting in the
advanced version in the late 1990s.There
are about a dozen or so deployments of the ABWR design by various power
companies in the U.S., China and Japan, the only three jurisdictions where the
ABWR design is licensed.Construction
continues on several and some of the older unit built in the 1990s and early
2000s are still in operation.Indeed,
several of the completed units have had to be taken off line for repairs of one
kind or another.
the ABWR is supposed to be advantageous over other designs through reduced capital
and operating costs.In the U.S. market
cost advantages could not be more critical than at this particular time when
swollen natural gas supplies have put other energy sources at a
disadvantage.Some have even called the
end of the nuclear energy industry as utilities have shuttered aging nuclear
plants rather than incur the expenses of repair and refurbishing.
Kashiwazaki-Kariwa Nuclear Power Plant
virtue of its investment in The Shaw Group with its Toshiba relationship, CBI
now has both feet in the nuclear power plant business.CBI also has some new competition from General Electric (GE:NSYE).GEH’s
first ABWR installation began commercial operation at Kashiwazaki-Kariwa in
Japan, in 1996.GE partnered with Hitachi
in 2007 to produce ABWRs.The GE-Hitachi
tie-up has and total of four ABWR plants completed in Japan and two in
Taiwan.We count another ten units
planned in Japan and the U.S. that have ordered from GE-Hitachi.
is not be outdone by its competitor.Most
recently Toshiba was been tapped as a contractor for the third and fourth
operating units of the South Texas Project in Matagorda County, Texas.The South Texas Project is a nuclear power
joint venture among Austin Energy, CPS Energy and NRG Energy. The consortium brags that the first two units
of the South Texas generating station “produce 2,700 megawatts of carbon-free
electricity - providing clean energy to two million Texas homes.”
is where The Shaw Group (now CBI) comes into the picture.Shaw is responsible for the engineering,
procurement and construction portion of the South Texas contract.Shaw came up with $250 million for the
strategic partnership with Toshiba when it was set up, of which $100 million
was earmarked for a credit facility to finance the South Texas expansion.
South Texas project is going forward natural gas prices be damned.It will be Toshiba and its Shaw Group/CBI partner
which reap the initial benefits.The
saying says ‘watched pots never boil’ but Toshiba and Shaw/CBI have figured
out how to turn a coin with boiling water nonetheless.
Neither the author
of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies
mentioned herein.CBI is included in the
Nuclear Group of The Atomics Index.