Financial Meltdown for U.K. Nuclear Project

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The development company behind the proposed £10 billion Moorside nuclear power project in northwest England has postponed the project, creating a domino effect that has forced the U.K.'s grid operator National Grid plc (NYSE:NGG) (London, England) to "pause" its supporting £2.8 billion ($3.6 billion) grid connection project.

NuGeneration (NuGen), a U.K. joint venture between partner Toshiba Corporation (TYO:6502) (Tokyo, Japan) and ENGIE (EPA:ENGI) (Paris, France), claimed recent problems with key investors and technology providers had forced it to launch a Strategic Review of the project.

Speaking to Cumbrian stakeholders recently, NuGen Chief Executive Officer Tom Samson pointed out the "tough start to 2017," with the severe financial issues experienced by Toshiba and its reactor company, Westinghouse Electric Company (Pittsburgh, Pennsylvania), which filed for Chapter 11 bankruptcy protection. As Industrial Info reported last month, this led to key partner ENGIE announcing that it was backing out of the project, with plans to sell its 40% stake. For additional information, see April 11, 2017, article - ENGIE Offloads 40% Stake in U.K. Nuclear Project.

"At the end of March, it became clear we at NuGen had to take a step back due to these circumstances and revisit some fundamental elements on which we had been building the programme to deliver Moorside," Samson explained. "As has been reported, we took the decision to 'hit the pause button' in order to explore our options to move forward to our objective--which is to deliver the next generation of low-carbon baseload electricity by the mid-2020s, for the benefit of the U.K.'s future prosperity. The key exam questions are straightforward in the circumstances. What is the best option for Moorside in technology and funding, to allow us to progress this phenomenal project of national significance, with confidence?"

This week, National Grid said that it has now paused its work to advance the £2.8 billion North West Coast Connections project, a 164-kilometre connection for the proposed Moorside nuclear plant.

"NuGen has announced it is conducting a strategic review to look at its ownership and technology vendor, National Grid said in a statement. "As a result of focussing their efforts on this review, NuGen are pausing work on their development consent order for Moorside. In light of this, we have decided to pause our work to consent NuGen's connection and take the time to understand NuGen's programme to make sure our projects are aligned. Despite this pause, we are confident the connection will still be ready when NuGen requires it and are continuing to work closely with them."

Moorside would be the largest nuclear plant in the U.K., capable of supplying six million homes with power. Westinghouse was contracted to supply three of its AP1000 reactors for the project, which would have a generating capacity of up to 3,800 megawatts (MW).

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