Toshiba’s nuclear dominoes collapsing
Westinghouse may be sold off for its technology and services lines of business, but new investors will be needed for the projects in the UK and India.
A sense of panic is emerging globally as Toshiba, troubled by extensive losses and fake financial reports, heads toward a complete exit from the commercial nuclear energy industry. The two countries that will be hardest hit by the expected actions will be the UK and India.
Unlike the situation following the Fukushima crisis, in which the Japanese government in effect nationalized TEPCO, no bailout of Toshiba is expected to come to its rescue. ……..
NuGen Project Faces Investor Uncertainty
Toshiba will likely end its planned commitment for a 60% equity stake in the NuGen Consortium at the UK Moorside project located in Cumbria. An effort to build three 1150 MW Westinghouse AP1000 nuclear reactors will now need new investors or a new reactor vendor or both.
In the UK backers of the NuGen project are looking to see if the government will directly fund the effort with Westinghouse acting as a technology vendor uncoupled from its parent’s convoluted corporate structure. ……..
The question is whether South Korea would want to take on another major project while it is still completing the other three units in the UAE plus it has domestic reactors that have capital requirements. The risk of being overextended in terms of money and management capability is one the firm will likely weigh relative to its interest in entering the UK nuclear market.
It is also less likely that Chinese state owned nuclear firms will have an appetite for further investments in the UK’s new nuclear build. They already have a full plate. Two firms have combined to take a 33% stake in the massive Hinkley Point C project. Also, they have also committed to enter the costly and lengthy Generic Design Assessment effort for the Hualong One reactor.
The two firms building the units at Fangchenggang hope to export the Hualong One to the UK for the Bradwell site once the Hinkley project is complete sometime in the mid-2020s. The firms have plans for a majority equity stake in the Bradwell project which could cost $10 billion. That’s a lot to take on and the prospect of being overextended is very real.
NPCIL Sees Andhra Pradesh as Now Being “Impossible”
Efforts by Westinghouse to close a deal to build six AP1000s for NPCIL at a coastal site in the southern state of Andhra Pradesh will go by the boards. The Indian government has not make any official statement about Toshiba’s problems. However, Reuters reported that it was told it now looks to be “impossible” for the six unit project to move ahead.
The Indian utility had been seeking U.S. Export Import Bank loan guarantees for the project which has cost estimates of at least $15 billion. Congress throttled the bank’s loan powers in 2015 and is unlikely to loosen the restraints for a project sponsored by Toshiba, at least in its current financially distressed state.
What Future for Westinghouse?
The risks that Westinghouse faces even if the reactor division is able to establish itself as an independent vendor to EPC firms and investors include keeping its work force intact during what could be a lengthy transition. Layoffs and cost cutting could reduce the core competencies of the firm and its ability to meet the service needs of existing customers much less be a vendor of nuclear technologies for new projects…..
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