When venture capitalists invest in a company that fails, investors find solace in failing quickly and cheaply. That’s not the case for NRG Energy’s (s nrg) investment in expanding its nuclear project, acknowledged David Crane, NRG Energy CEO, at our Green:Net event last week. After five years and a $330 million investment, NRG Energy announced early last week that it will no longer fund its nuclear expansion project in Texas, and Crane said at Green:Net that failing quickly and cheaply “is something that we have failed to do.”
The discussion was one of the more intimate at our event last week, and for me, really drove home the massive implications that the Japanese disaster at Fukushima is now having on the nuclear industry. It was unclear just how dramatic the aftermath of Japan’s nuclear disaster would be for the international nuclear industry at large in the few weeks after the earthquake and tsunami. But Crane’s words and NRG’s decision seem like the short-term nail in the coffin for any so-called nuclear renaissance in the U.S.
The U.S. government clearly still stands behind nuclear projects, as it remains committed with Department of Energy loan guarantees. But without private industry to build these projects, they won’t go anywhere. Crane and NRG Energy also still remain committed to nuclear power, but the company just can’t sustain the investment any longer without more investment from its peers. Crane said at Green:Net:
Nuclear is the single most green thing that we can do, because there is nothing that reduces greenhouse gas emissions like nuclear power … That’s an enormous set back for the fight against climate change. A stunningly large set back.
For NRG Energy and Crane, it’s a sizable set back for the company, too. Last week, NRG said stopping the investment would lead to a first quarter 2011 pretax charge of about $481 million. Wall Street seems satisfied with the end of the nuclear investment; NRG Energy’s stock is trading at $22.47, one of its highest points in the last six months.