Toshiba Abandons Moorside Nuclear Project in the U.K.

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Toshiba Corporation (TYO:6502) (Tokyo, Japan) has decided to pull out of one of the U.K.'s largest planned nuclear power projects after the failure of 18 months of negotiations with potential partners.

The company, through its NuGeneration (NuGen) arm, has pulled the plug on its involvement with the 3,800-megawatt (MW) Moorside project in the northwest of England, which would be capable of supplying 7% of the U.K.'s total power. It has announced that it is winding up its NuGen company from January.

"After considering the additional costs entailed in continuing to operate NuGen, Toshiba recognises that the economically rational decision is to withdraw from the U.K. nuclear power plant construction project, and has resolved to take steps to wind up NuGen," the company stated.

Toshiba acquired 60% of the outstanding shares of NuGen in June 2014 and then the remaining 40% of NuGen's shares from France's ENGIE S.A. in mid July 2017. Despite putting NuGen up for sale, no deal has been struck. Last December, Industrial Info reported that South Korea's state-owned utility Korea Electric Power Corporation (KEPCO) had emerged as the preferred bidder. For additional information, see December 12, 2017, article - South Korea's KEPCO Rescues Largest U.K. Nuclear Project.

Tom Samson, the chief executive officer of NuGen told media: "Obviously today is a sad day for NuGen, despite our best efforts to find a solution and despite the tremendous hard work and commitment from everyone involved in our journey this far, we have been unable to find a buyer and the decision to wind up the business was an inevitable one for Toshiba. Many questions will be asked about why NuGen has been unable to find a buyer and continue forward at Moorside and I think there is really one very simple reason--that we were caught between a series of unplanned and uncontrollable events."

He added: "The bankruptcy of Westinghouse and Chapter 11 was the start of our sale process and that process was further complicated by the emergence of a potential new policy framework from the U.K. government to finance nuclear new build, the Regulated Asset Base--so called RAB model--in the midst of that sale process. The RAB model is still in early stages of development...and still faces a lengthy legislative process before it can be applied to new nuclear. It has not proven possible to find a buyer willing to take that level of policy and legislative risk when entering the U.K.; hence we have been unable to bring an acquisition to a conclusion."

Originally, Westinghouse was contracted to supply three of its AP1000 reactors for the project, but KEPCO, if it had bought into the project, would have insisted on using its own Generation III+ reactor, the APR1400. However, unlike the AP1000, the KEPCO reactor has not yet undergone the U.K.'s four-year Generic Design Assessment (GDA) process. Even with a new partner, it seems unlikely that the Moorside project will be completed before 2030, years after its original commissioning date of 2024.

Reacting to the decision to wind up NuGen, Justin Bowden, national officer of the GMB union, one of the U.K.'s biggest workers unions, said: "The British Government has blood on its hands as the final sad but predictable nail is banged into the coffin of Toshiba's jinxed jaunt into nuclear power. A new nuclear power station in West Cumbria remains vital for the U.K.'s future energy security and requires urgent action. The Nuclear Decommissioning Authority must be immediately given a role for nuclear development and tasked with developing a small modular nuclear reactor on site, tapping into the wealth of nuclear experience and expertise in the area and ensuring we have security of supply in years to come."

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