Britain’s Moorside nuclear power project on the rocks?

Moorside on the rocks? NucClear News October 18

 Plans for a new nuclear power station in Cumbria are on the verge of collapsing after the Toshiba-owned company – NuGen – laid off 60% of its workforce and embarked on a final effort to sell the project. Toshiba was due to sell the NuGen consortium to South Korean state-owned firm Kecpo in early 2018, as the Japanese firm exits international nuclear projects and looks to recoup some of the £400m it has spent on the Moorside plant.

But Kepco has been delaying a final decision, due in part to the UK government signalling a new approach to financing nuclear power stations. That has forced NuGen to cut 60 of its 100-strong workforce after a six-week consultation with staff. (1)

Unions said the project’s problems showed the need for the government to take a stake in Moorside. Justin Bowden, the GMB national secretary, said: “The looming collapse of this vital energy project has been depressingly predictable for months.” The GMB wants the NDA to be scrapped as it currently exists and a Nuclear Development Agency created to make sure Moorside and the accompanying creation of thousands of new jobs and apprenticeships, goes ahead. (2) The skeleton NuGen team is now focused on clinching a deal with Kepco by the end of the year before Toshiba writes the unit off entirely at the end of March 2019. Success will hinge on whether Kepco buys into a new financing approach for nuclear power plants that the government is exploring, known as the regulated asset base (RAB) model. Officials think it could deliver the government’s nuclear ambitions more cheaply for consumers than alternatives.

The RAB approach involves a regulator – in the case of nuclear power stations most likely to be Ofgem – setting a fixed sum for the costs of the scheme, and a fixed return for the project’s backers. Those returns would be funded by energy bill payers. But the model is likely to be ditched if Jeremy Corbyn comes to power. Alan Whitehead, the shadow energy minister, said: “Using customers’ bills to make a bet that construction of such large and complex projects will not overrun in terms of cost or time is a reckless act.” (3)

The Chief Executive of NuGen said he will “fight tooth and nail” to salvage the £15 billion Moorside nuclear power station in an impassioned speech to industry leaders gathered in Cumbria. He says he is fully behind using the RAB model. (4)

 The FT reported that Toshiba had entered talks with Canadian asset manager Brookfield over the potential sale of NuGen. Brookfield bought Westinghouse from Toshiba for $4.6bn in January after the US nuclear business filed for Chapter 11 bankruptcy protection in 2017. (5) But the claims were later rubbished by Toshiba. It added that it was still considering the sale of NuGen to Kepco. (6)

Later NuGen admitted that there are no firm plans to save Moorside. (7)

 Workington Labour MP, Sue Hayman, co-chair of the All Party Parliamentary Group on Nuclear Energy, wrote to the Secretary of State for Business, Greg Clark MP, at the end of July, when NuGen announced it was consulting on job losses, calling on him to guarantee Government support for the project and 20,000 future Cumbrian jobs. Mr Clark said in June that he “will consider direct Government investment” in the proposed Wylfa nuclear power station in Wales, but he has refused to make any similar commitment to Cumbria. In a response to Sue’s letter, energy minister Richard Harrington MP said: “The Secretary of State and I understand the potential importance of the Moorside project to the local area. However (…) the proposed sale of NuGen is principally a commercial matter for Toshiba and it would not be appropriate for me to comment on those ongoing negotiations.” Sue Hayman said: “This Tory government could not care less about the Cumbrian economy, the Moorside project, or the 20,000 future jobs it will bring.” (8)

but he has refused to make any similar commitment to Cumbria. In a response to Sue’s letter, energy minister Richard Harrington MP said: “The Secretary of State and I understand the potential importance of the Moorside project to the local area. However (…) the proposed sale of NuGen is principally a commercial matter for Toshiba and it would not be appropriate for me to comment on those ongoing negotiations.” Sue Hayman said: “This Tory government could not care less about the Cumbrian economy, the Moorside project, or the 20,000 future jobs it will bring.” (8) http://www.no2nuclearpower.org.uk/wp/wp-content/uploads/2018/09/NuClearNewsNo111.pdf

September 29, 2018 - Posted by Christina Macpherson | business and costs, politics, UK