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Ongoing collapse of UK’s Moorside nuclear project, as French nuclear industry mired in scandal

Another month in UK’s failing new nuclear programme nuClear News No.94 April 2017 The ongoing collapse of the Moorside nuclear project has hit the headlines. But the French nuclear industry continues to be mired in scandal as EDF starts pouring nuclear safety critical concrete at Hinkley. And now we learn that the chief executive of Wylfa Newydd developer Horizon Nuclear Power says he needs to raise cash or the Anglesey project will not go-ahead.

Moorside Collapse On 29th March 2017, Westinghouse Electric Company, a subsidiary of Japanese company Toshiba and the largest historic builder of nuclear power plants in the world, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in New York. (1)

Toshiba owns 60% of the NuGen consortium which is planning to build 3 AP1000 reactors at Moorside next to Sellafield in Cumbria. Senior figures in the UK nuclear industry told the Financial Times that Westinghouse’s bankruptcy has crystallised doubts about the project. There is now considerable doubt about whether NuGen will be able to find a new source of funding. (2)

As we reported last month the owner of 40% of the NuGen Moorside consortium, French company Engie (33% owned by the French Government) declared last December that it would like to abandon the project. (3) Now the Company has exercised its right under the NuGen consortium agreement to sell all of its shares to Toshiba in the “event of a default”. Toshiba’s decision to place Westinghouse – into bankruptcy protection qualifies as such an event. Toshiba said it would pay around $138.7m for Engie’s stake. Under its agreement with the French utility, it is required to pay at least the amount that Engie invested to acquire the stake. (4)…….

Engie is the seventh international energy utility to give up on UK new nuclear build. Over the past decade, on top of Toshiba, E-on (Wylfa), RWE Npower (Wylfa), Iberdrola (Moorside), SSE (Moorside), and Centrica (Hinkley Point) have all pulled out of developing new nuclear reactors in the UK. (6)

This leaves a very limited field of companies for the UK to approach in its hunt for a new partner for the Moorside scheme. South Korea’s KEPCO remains the most likely suitor, but Reuters reports that the giant utility won’t be rushed. It is one of few utilities remaining with global nuclear ambitions, but despite the fact that the AP1000 reactor has now received approval from the Office for Nuclear Regulation and the Environment Agency, may still want to use its own technology – the APR1400. This would delay the development by a further four to five years No2NuclearPower nuClear news No.94, April 2017 3 whilst the South Korean reactor is put through its Generic Design Assessment by UK Regulators. Greg Clark, the Business Secretary, was in Seoul for talks at the beginning of April, but offered no evidence of concrete progress in the negotiations. (7)

KEPCO would also want to know more about the causes of the problems with two new nuclear projects in the US, involving AP1000 reactor designs which brought Westinghouse to its knees. Were the problems specific to the AP1000 reactor or a classic big project issue of not having done your homework before you start digging? (8)…….

KEPCO is unlikely to be tempted into taking over the troubled Moorside nuclear project without some sort of public financing, says former energy minister and chairman of New Nuclear Watch Europe, Tim Yeo. He says they will also be hesitant to step in and save the development unless it can use its own reactor technology. “I’ve been arguing for some time that we should look at providing during the construction phase some government finance.” Yeo said this would have to be on the basis of repayments beginning as soon as the plant is generating. (10)

April 8, 2017 - Posted by | business and costs, politics, politics international, UK

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