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With New York subsidy to FitzPatrick Nuclear Power Plant, Exelon has now bought this struggling station

Sold! FitzPatrick acquisiton complete, WRVO, 1 Apr 17, By  The transfer of the FitzPatrick Nuclear Power Plant to its new owner is officially complete. Exelon, which owns and operates the nearby Nine Mile Point Nuclear Facility Exelon, announced Friday that its negotiations with Entergy are done. The company bought the Oswego County plant last summer for $110 million.

FitzPatrick had been hemorrhaging money because of competition from natural gas. Entergy said the plant was losing the company about $60 million annually, so they moved to decommission it. But New York regulators stepped in to prevent its closure, passing a comprehensive clean energy plan that will  the state’s financially struggling nuclear plants, including FitzPatrick, with subsidies that are scheduled to kick in tomorrow. …….

the subsidy program supporting the deal may be in jeopardy. The New York State Assembly has proposed a one-house budget that would halt the program until they can hold a hearing with state officials. And several pending lawsuits also threaten the plan.http://wrvo.org/post/sold-fitzpatrick-acquisiton-complete

April 1, 2017 Posted by | business and costs, USA | Leave a comment

Is the nuclear game up, at last? Toshiba’s nuclear flagship goes bust after $10 billion losses

It’s now looking increasingly probable that the [British] Moorside project, given the state of the Nugen consortium and the massive failure of the AP1000 design, may never progress to construction.
The French government is selling assets so it can prop up its heavily indebted
nuclear utilities Areva and EDF. The French nuclear industry is in its “worst situation ever” according to former EDF director Gérard Magnin.

The crisis-ridden US, French and Japanese nuclear industries account for half of worldwide nuclear power generation. Other countries with crisis-ridden nuclear programs or nuclear phase-out policies account for more than half of worldwide nuclear power generation.

Meranwhile renewable energy generation doubled over the past decade and strong growth, driven by sharp cost decreases, will continue for the foreseeable future.

 
Toshiba’s nuclear flagship goes bust after $10 billion losses http://www.theecologist.org/News/news_round_up/2988820/toshibas_nuclear_flagship_goes_bust_after_10_billion_losses.html, Jim Green, 30th March 2017 News that one of the world’s biggest nuclear power constructors, Westinghouse, has filed for bankruptcy in with debts of over $10 billion has put the entire sector on notice and issued a dire warning to nuclear investors everywhere, writes Jim Green. Among the likely casualties: the UK’s Moorside nuclear complex in Cumbria.

The rapidly-evolving nuclear power crisis escalated dramatically yesterday when US nuclear giant Westinghouse, a subsidiary of Japanese conglomerate Toshiba, filed for bankruptcy.

The Chapter 11 filing took place in the US Bankruptcy Court for the Southern District of New York in New York City.

Westinghouse and its parent Toshiba are in crisis because of massive cost overruns building four ‘AP1000’ nuclear power reactors in the southern US states of Georgia and South Carolina.

The combined cost overruns for the four reactors now amount to about $1.2 billion and counting. And it has now emerged that they may never be finished at all. Whether the four reactors will be completed is now subject to an “assessment period”, according to Westinghouse.

The corporate mishap may also signal the end of new nuclear power in the US. No other reactors are under construction in the country and there is no likelihood of any new reactors in the foreseeable future. The US reactor fleet is one of the oldest in the world, with 44 out of its 99 reactors having been operated for four decades or more.

A $10 billion financial hole – and it’s getting deeper!

Toshiba says Westinghouse had debts totalling US$9.8 billion. Plans for new Westinghouse reactors in India, the UK and China are in jeopardy and will likely be cancelled. Bloomberg noted yesterday: “Westinghouse Electric Co., once synonymous with America’s industrial might, wagered its future on nuclear power – and lost.”

The same could be said about Toshiba, which is selling profitable businesses to stave off bankruptcy. Toshiba said yesterday it expects to book a net loss of $9.1 billion for the current fiscal year, which ends on Friday – a record loss for a Japanese manufacturer.

That projected loss is also well over double the estimate provided just last month, raising investor fears that the final figure may be greater still. “Every time they put out an estimate, the loss gets bigger and bigger”, said Zuhair Khan, an analyst at Jefferies in Tokyo. “I don’t think this is the last cockroach we have seen coming out of Toshiba.”

The BBC noted that Toshiba’s share-price has been in freefall, losing more than 60% since the company first unveiled the problems in December 2016. Toshiba president Satoshi Tsunakawa said at a news conference yesterday: “We have all but completely pulled out of the nuclear business overseas.”

Westinghouse is the major member of the Nugen consortium that’s set to build a massive three-reactor AP1000 nuclear complex at Moorside in the UK, next to the Sellafield site. The company has already stated that while it intends to progress the project through planning stages, it is unable to take on financing or construction and intends to sell its share.

Nugen’s other member, the French energy company Engie (formerly GDF Suez) has also gone on record as wanting to extricate itself from the Moorside project in favour of the ‘new energy’ economy based on renewable, storage and smart grid technologies.

It’s now looking increasingly probable that the Moorside project, given the state of the Nugen consortium and the massive failure of the AP1000 design, may never progress to construction.

The good news for the nuclear industry? The UK’s Office of Nuclear Regulation (ONR) today – with impeccable timing – accepted the AP1000 design as “suitable for construction in the UK“ and issued Westinghouse a Design Acceptance Certificate.

Is the nuclear game up at last?

A similar crisis is unfolding in France, which has 58 power reactors but just one under construction. French ‘EPR’ reactors under construction in France (Flamanville) and Finland are three times over budget – the combined cost overruns for the two reactors amount to about €12.7 billion and counting.

The French government is selling assets so it can prop up its heavily indebted nuclear utilities Areva and EDF. The French nuclear industry is in its “worst situation ever” according to former EDF director Gérard Magnin.

Meanwhile a simple comparison of decommissioning provision between France and Germany indicates that EDF has massively under-budgetted for its liabilities. Germany has set aside €38 billion to decommission its 17 nuclear reactors (€2.2 billion each), but France has set aside only €23 billion to decommission its 58 reactors (€0.4 billion each).

When the real costs, for which EDF will be liable, come in, they could easily bankrupt the company. This in turn puts the UK’s Hinkley Point double EPR nuclear project, in which EDF is the main partner, in doubt.

The crisis-ridden US, French and Japanese nuclear industries account for half of worldwide nuclear power generation. Other countries with crisis-ridden nuclear programs or nuclear phase-out policies account for more than half of worldwide nuclear power generation.

Meranwhile renewable energy generation doubled over the past decade and strong growth, driven by sharp cost decreases, will continue for the foreseeable future.

 

March 31, 2017 Posted by | 2 WORLD, business and costs | Leave a comment

Shock to global nuclear industry as Westinghouse goes bankrupt

Westinghouse Files for Bankruptcy, in Blow to Nuclear Power, NYT By DIANE CARDWELL and JONATHAN SOBLEMARCH 29, 2017, Westinghouse Electric Company, which helped drive the development of nuclear energy and the electric grid itself, filed for bankruptcy protection on Wednesday, casting a shadow over the global nuclear industry.


The filing comes as the company’s corporate parent, Toshiba of Japan, scrambles to stanch huge losses stemming from Westinghouse’s troubled nuclear construction projects in the American South. Now, the future of those projects, which once seemed to be on the leading edge of a renaissance for nuclear energy, is in doubt.

“This is a fairly big and consequential deal,” said Richard Nephew, a senior research scholar at the Center on Global Energy Policy at Columbia University. “You’ve had some power companies and big utilities run into financial trouble, but this kind of thing hasn’t happened.”

Westinghouse, a once-proud name that in years past symbolized America’s supremacy in nuclear power, now illustrates its problems…..Slowing demand for electricity and tumbling prices for

natural gas have eroded the economic rationale for nuclear power, which is extremely costly and technically challenging to develop. Alternative-energy sources like wind and solar power are rapidly maturing and coming down in price. The 2011 earthquake in Japan that led to the nuclear disaster at the Fukushima Daiichi plant renewed worries about safety. Westinghouse’s problems are already reducing Japan’s footprint in nuclear power, an industry it has nurtured for decades in the name of energy security. Even before the filing, Toshiba had essentially retired Westinghouse from the business of building nuclear power plants. Executives said they would instead focus on maintaining existing reactors — a more stable and reliably profitable business — and developing reactor designs.

That has made the already small club of companies that take on the giant, expensive and complex task of nuclear-reactor building even smaller. General Electric, a pioneer in the field, has scaled back its nuclear operations, expressing doubt about their economic viability. Areva, the French builder, is mired in losses and undergoing a large-scale restructuring………..Toshiba said Westinghouse had total debt of $9.8 billion. The Chapter 11 bankruptcy filing was made in federal bankruptcy court for the Southern District of New York.

A decade ago, Toshiba was dreaming of a big global expansion when it bought Westinghouse for a surprisingly high $5.4 billion and made plans to install 45 new reactors worldwide by 2030…….In its bankruptcy filing, Westinghouse said that its top 30 unsecured creditors held over $508 million in claims. Among those creditors are big engineering and construction companies like Fluor and CB&I, and Nuclear Fuel Services, a fuel supplier.

To shepherd its case through Chapter 11, Westinghouse has hired a number of advisers, including the investment bank PJT Partners, the law firm Weil, Gotshal & Manges, and the consulting firm AlixPartners.

Westinghouse also said in its bankruptcy filing that it had taken out an $800 million loan from a group led by Citigroup to support itself through the bankruptcy process.

March 31, 2017 Posted by | 2 WORLD, business and costs | Leave a comment

Toshiba’s record loss: shares plummet due to nuclear failures

Toshiba Projects Record Loss as Nuclear Unit Files for Bankruptcy, Bloomberg, by Dawn McCarty and Pavel Alpeyev March 29, 2017, 

  • Toshiba warns full year loss may widen to 1.01 trillion yen
  • Japanese company trying to sell memory chips division

  • Toshiba Corp. projected its annual loss could more than double to a record 1.01 trillion yen ($9.1 billion) as its U.S. nuclear unit Westinghouse Electricfiled for Chapter 11 bankruptcy.

    The collapse of Westinghouse, once the linchpin of Toshiba’s plans to diversify away from consumer electronics, caps a disastrous run for the Japanese conglomerate as project delays crippled earnings from the nuclear plant business. The company has now put its prized memory chip unit up for sale just as it was recovering from a profit-padding scandal that claimed the scalps of senior executives……

  • Toshiba listed as much as $10 billion debt for Westinghouse and another entity. The nuclear unit filed in U.S. Bankruptcy Court for the Southern District of New York and proposed to appoint Weil, Gotshal & Manges LLP as legal adviser, AlixPartners LLP as financial adviser, and PJT Partners Inc. as investment banker, subject to court approval.

    Toshiba said last month it expected to write down 712.5 billion yen in its nuclear-power business, citing cost overruns and diminishing prospects for atomic-energy operations. The company has twice delayed its earnings report, with results for the December quarter now due on April 11.

  • “There were warning signs when Toshiba delayed releasing financials earlier this year,” said Emmanuel Chua, senior associate at Herbert Smith Freehills in Singapore. “The big question mark is whether the restructuring plan and process presents real opportunities for a turnaround, or whether it is simply an exercise of ‘kicking the can down the road.”’

    Shares of Toshiba have slumped 23 percent this year after advancing 13 percent in 2016. The loss forecast was announced after the close of trading on Wednesday.

    Expectations that the company may be too big to fail for the Japanese government, and the likelihood that it will get state support is bolstering its bonds. Toshiba’s 20 billion yen of December 2020 bonds were little changed at 88 percent of face value, according to data compiled by Bloomberg……
    Scana and Southern could end up facing billions of dollars in additional costs, according to Morgan Stanley. Scana faces as much as $5.2 billion in higher costs that could drag its shares down 5 percent, analysts at the bank including Stephen Byrd said in a March 22 research note, while cost overruns for utility owner Southern could reach $3.3 billion……https://www.bloomberg.com/news/articles/2017-03-29/toshiba-s-u-s-nuclear-unit-westinghouse-files-for-bankruptcy

March 31, 2017 Posted by | business and costs, Japan | Leave a comment

Will Westinghouse be able to complete any of its nuclear projects?

Westinghouse files for bankruptcy in blow to nuclear power, NYT, 30 Mar 17 “……..Bankruptcy will make it harder for Westinghouse’s business partners to collect money they are owed by the nuclear-plant maker. That mostly affects the American power companies for whom it is building reactors, analysts say. Now, it is unclear whether the company will be able to complete any of its projects, which in the United States are about three years late and billions over budget.

The power companies — Scana Energy in South Carolina and a consortium in Georgia led by Georgia Power, a unit of Southern Company — would face the possibility of new contract terms, long lawsuits and absorbing losses that Toshiba and Westinghouse could not cover, analysts say. The cost estimates are already running $1 billion to $1.3 billion higher than originally expected, according to a recent report from Morgan Stanley, and could eventually exceed $8 billion over all.

Dennis Pidherny, a managing director at Fitch Ratings who is sector head of the United States public power group, said that it was possible that the company’s bankruptcy filing could terminate the contracts and that it could be difficult for the utilities to find another builder to take them over.

“There’s still quite a bit of work that needs to be completed,” he said. “The biggest challenge there is quite simply finding another suitable contractor who can complete the contract and have it completed at a quote-unquote reasonable cost.”

That is, if they are constructed at all. Stan Wise, chairman of the Georgia Public Service Commission, said the utilities developing the Alvin W. Vogtle generating station in the state would have to evaluate whether it made sense to continue.

“It’s a very serious issue for us and for the companies involved,” Mr. Wise said. “If, in fact, the company comes back to the commission asking for recertification, and at what cost, clearly the commission evaluates that versus natural gas or renewables.”

In a statement on Wednesday, Toshiba said Westinghouse and affiliated companies were “working cooperatively” with the owners to arrange for construction to continue. In recent days, the affected companies issued statements saying they were monitoring the situation and exploring their options, as did the Energy Department, which has authorized $8.3 billion in federal loan guarantees for the Georgia project.

“We are keenly interested in the bankruptcy proceedings and what they mean for taxpayers and the nation,” said Lindsey Geisler, a Department of Energy spokeswoman. “Our position with all parties has been consistent and clear: We expect the parties to honor their commitments and reach an agreement that protects taxpayers, promotes economic growth, and strengthens our energy and national security.”https://www.nytimes.com/2017/03/29/business/westinghouse-toshiba-nuclear-bankruptcy.html?_r=0

March 31, 2017 Posted by | business and costs, USA | Leave a comment

Bankruptcy doesn’t make liabilities vanish – Toshiba wan’t be saved by Westinghouse bankruptcy

Westinghouse Bankruptcy Won’t Save Toshiba, Bloomberg Gadfly, https://www.bloomberg.com/gadfly/articles/2017-03-29/a-westinghouse-bankruptcy-won-t-save-toshiba By David Fickling, 29 Mar 17, From the outside, Chapter 11 bankruptcy can look like an almost magical process. A company previously laden down with borrowings gets to discharge its liabilities and emerge seemingly unscathed.

U.S. miner Arch Coal Inc. had $4.5 billion in net debt and a market capitalization of just a few million dollars when it filed for Chapter 11 in January 2016. After emerging from a nine-month gestation in the courts, it’s now worth $1.73 billion and is debt free, with net cash of $31 million.

Toshiba Corp. shareholders appear to hope the same rule will hold true for Westinghouse Electric Co., the nuclear unit that’s dragged one of Japan’s oldest industrial conglomerates to the brink of insolvency. The stock has rallied 20 percent in a week, after Toshiba said Westinghouse’s board was considering bankruptcy. The unit has filed for Chapter 11 protection in New York, court documents showed Wednesday.

If the courts are about to give Westinghouse a get-out-of-jail-free card, someone ought to tell the credit markets.

Compare Toshiba’s own credit-default swaps to those on Southern Co. and Scana Corp., the two U.S. electric utilities for whom Westinghouse is under contract to build four reactors, and it’s clear that investors expect one of the three players to suffer most of the costs. Insuring $10 million of Toshiba’s debt against default for five years would set you back about $423,000, compared to $78,000 for Scana and $64,000 for Southern.

Toshiba faces a bewildering array of potential hits to its balance sheet from its nuclear foray, but most of them are either relatively small (such as its 34.6 billion yen ($311 million) in decommissioning and environmental liabilities), or already factored in (like the 713 billion yen goodwill writedown that will leave it with negative shareholders’ equity once it reports annual results).

The deal with Southern and Scana is different. Payment guarantees to subsidiaries of the two utilities constitute 90 percent of the 794 billion yen in parent-company guarantees for which Toshiba has promised to indemnify Westinghouse. Put into English: If Westinghouse fails to build the reactors on time and on budget, Toshiba is on the hook for a sum not much less than the 768 billion yen value of all its factories, machinery and land.

Aside from a bailout by the Japanese government, the sliver of hope for Toshiba shareholders is that the messy bankruptcy process will allow some of those liabilities to be taken on by other players. The U.S. government, for instance, has made an $8.3 billion loan guarantee to the owners of Southern’s reactors. That may complicate the process, the Nikkei reported earlier this month. Moody’s Investors Service and S&P Global Ratings in recent weeks have put shareholders in the plants, including Southern and Scana and associated units, on negative ratings outlooks on the possibility they will have to bear some costs.

Creditors of the two utilities seem unconcerned. It’s been more than a year since Scana’s 4.125 percent bonds due February 2022 last dipped below par, while the Southern unit that will be the main shareholder in its nuclear plant project, Georgia Power Co., managed to raise fresh debt just last month. Its $400 million of 3.25 percent notes due 2027, sold at a modest 0.113 cent discount to par, are trading at 98.56 cents on the dollar.

That should be worrying for Toshiba, because there’s no magic spell behind Chapter 11. Bankruptcy doesn’t make liabilities vanish outright. For the most part, it just reorganizes them, imposes haircuts on junior creditors, and converts a portion from the most stringent form — debt — to a milder alternative, equity. If bondholders at Westinghouse’s customers are feeling confident, Toshiba shareholders should prepare for a troublesome chain reaction.

March 31, 2017 Posted by | business and costs, Japan | Leave a comment

South Carolina, Georgia nuclear projects under the cloud of Westinghouse’s troubles

Westinghouse troubles loom over South Carolina, Georgia nuclear projects, Denver Post, By  March 29, 2017 Westinghouse Electric Co., the U.S. nuclear unit of Japan’s Toshiba Corp., filed for bankruptcy protection Wednesday, calling into question the future of a number of billion-dollar nuclear projects under construction, including two in the U.S.

Westinghouse said in a statement that it filed the Chapter 11 petition in U.S. Bankruptcy Court in New York. The move had been largely expected.

The troubles at a company long associated with nuclear power add to the industry’s problems. ….. the four nuclear reactors Westinghouse is helping to build in South Carolina and Georgia are behind schedule and billions of dollars over budget…….

Toshiba acquired Westinghouse in 2006 with much fanfare, making nuclear power an important part of its business strategy. Instead, Westinghouse has saddled the Japanese company with mounting losses. Toshiba said Westinghouse had racked up debt of $9.8 billion. Wednesday, Toshiba said it could post a loss as big as 1 trillion yen ($9 billion) for the fiscal year ending March 31. It previously said Westinghouse lost 712.5 billion yen ($6.2 billion) from April to December of last year.

In South Carolina, Westinghouse is a partner with state-owned utility Santee Cooper and publicly-traded SCANA Corp. on the construction of two reactors at the V.C. Summer Nuclear Station near Jenkinsville. SCANA said in September that the cost of building the reactors had increased nearly $3 billion from the original $11 billion estimate in 2009. The first reactor was supposed to open in 2017, but has been delayed at least two years.

SCANA officials told investors on a conference call Wednesday that all options remain on the table, from finishing both reactors, to finishing one reactor and delaying completion of the other or abandoning the project altogether. The company said it will spend at least the next 30 days reviewing its options.

The Plant Vogtle project in eastern Georgia was more than three years behind schedule and more than $3 billion over its original budget as of the end of 2016. Oglethorpe Power, one of the partners in the project, said in a regulatory filing this week that “the revised in-service dates of December 2019 and September 2020” for the two reactors it’s building “do not appear to be achievable.”

Georgia Power, a subsidiary of Southern Co. and holder of a 46-percent stake in the Vogtle project, said in a statement that it “will continue to take every action available to us to hold Westinghouse and Toshiba accountable for their financial responsibilities.” Southern Co. and the other partners have a $920 million letter of credit from Westinghouse obtained in 2015……http://www.denverpost.com/2017/03/29/westinghouse-troubles-loom-over-nuclear-projects/

March 31, 2017 Posted by | business and costs, USA | Leave a comment

Westinghouse financial crisis impacts Britain’s nuclear power plans

UK nuclear plans could be hit by Westinghouse financial crisis https://www.theguardian.com/business/2017/mar/28/uk-nuclear-westinghouse-bankruptcy-toshiba-us

Toshiba’s US subsidiary, which has technology in about half world’s reactors, expected to file for bankruptcy protection, Guardian, , 29 Mar 17, A financial crisis at a major nuclear energy business is threatening to deal a blow to the UK’s atomic energy programme.

Toshiba’s US nuclear subsidiary Westinghouse Electric is believed to be on the brink of filing in the US for bankruptcy protection from creditors. A UK expert said the collapse would leave a considerable hole in Britain’s new nuclear ambitions as Toshiba is a key player behind plans for a new power station at Moorside in Cumbria.

Westinghouse is a behemoth in the world of nuclear vendors, with its technology in about half the world’s reactors. But it is facing a writedown of billions of dollars over its acquisition of a nuclear construction and services business. In 2015 Toshiba bought CB&I Stone & Webster, the company managing the construction of new reactors Plant Vogtle in Georgia and Virgil C Summer in South Carolina, both of which are over budget and behind schedule.

Westinghouse filing for Chapter 11 protection would potentially limit future losses for its owner Toshiba. The move will also trigger complex negotiations between the Japanese conglomerate, its American unit and creditors, and could embroil the US and Japanese governments, given the scale of the collapse and US government loan guarantees for new reactors.

The US utilities that operate the two nuclear plants are among Westinghouse’s biggest creditors, owed for work that has yet to be completed and potential penalties, sources have said. The bankruptcy filing will allow Westinghouse to renegotiate or break the construction contracts, although the utilities that own the projects would likely seek damages.

 Credit rating agency Moody’s said it welcomed the prospect of bankruptcy because it could limit Toshiba’s liabilities.

Anti-nuclear campaigners said the episode showed the world should build renewable energy rather than new nuclear. Doug Parr, policy director at Greenpeace UK, said: “The world is watching the meltdown of a major corporation and questioning the cost of new nuclear. Declaring bankruptcy in the USA might shield Toshiba from Westinghouse’s debt, but as Toshiba’s share price ricochets and its multibillion-dollar losses escalate, the beleaguered nuclear industry is being shaken to the core again.”

 Dr Paul Dorfman, a nuclear expert at UCL in London, told the Guardian: “Toshiba has fallen on its sword and this has significant consequences for the UK’s plans for new nuclear. Kepco of South Korea may come and buy into NuGen [the consortium behind the UK’s Moorside plant]. But you can’t necessarily sell off the bad bits of a nuclear corporation and keep the good bits.”

Kecpo last week ruled out buying Westinghouse but said it was in talks to take a stake in NuGen. However, Dorfman said: “While Kepco may wish to buy into NuGen they may find it both legally and financially problematic.”

He added that any unravelling of Nugen as a result of Westinghouse filing for bankruptcy would “leave a considerable hole in UK nuclear plans”.

The AP1000 reactor design of the two US plants is the same as the three planned for the Moorside power station. Within days the UK nuclear regulator is expected to approve a “generic design assessment” for the AP1000, the end of a four-year approval process.

This year Toshiba has twice delayed publishing its financial results for the third quarter of 2016, which will reveal the scale of the impairment it faces with regards to CB&I Stone & Webster. In January, chief executive Satoshi Tsunakawa said that while Toshiba would continue to maintain and operate its existing nuclear plants: “It is unlikely that we will carry out construction work for future nuclear power plant projects, in order to eliminate risk.”

But NuGen has said that while Toshiba may not build Moorside, the Japanese corporation was still committed to developing the Moorside power station. The possibility of a Westinghouse bankruptcy also raises questions over its impact on the Springfields nuclear fuel plant in Lancashire. The company owns the site on a 150-year lease from the UK government’s Nuclear Decommissioning Authority.

In the US, the reactors that Westinghouse is building are due to be completed within the next three years.

March 29, 2017 Posted by | business and costs, politics, UK | Leave a comment

Babcock company down £800m after ending nuclear decommissioning contract

Babcock to take £800m hit after ending nuclear decommissioning contract, Belfast Telegraph, March 27 2017 Engineering services firm Babcock has said it will take an £800 million hit after terminating a major Government contract to decommission and manage 12 UK nuclear sites.

The 14-year contract will end nine years early in August 2019, knocking its order book and resulting in a £100 million drop in annual revenues for eight consecutive financial years from 2020/21.

Shares in Babcock slipped more than 3.4% following the news.

Babcock – which holds a 65% stake in the Cavendish Fluor Partnership (CFP) that won the original contract from the Nuclear Decommissioning Authority (NDA) – said the amount of work required was “materially different” than initially specified.

The company explained that the mismatch between what was requested in the contract and the work that needed to be done put the contract at risk of legal action.

The NDA revealed on Monday that it has shelled out £97.5 million to settle litigation claims by two American firms – Bechtel and Energy Solutions – over the deal.

Energy Solutions will receive £76.5 million, plus £8.5 million of costs, while Bechtel will be paid around £12.5 million in total.

The £6.1 billion contract ran into controversy last year after a High Court judge ruled that the NDA had wrongly awarded the contract to CFP.

Energy Secretary Greg Clark announced that the Government is now launching an independent inquiry into both the 2012 procurement process, as well as the reasons why the contract proved to be “unsustainable”…

The contract covered the management and decommissioning of 12 Magnox nuclear sites, which included two research facilities…. http://www.belfasttelegraph.co.uk/business/news/babcock-to-take-800m-hit-after-ending-nuclear-decommissioning-contract-35568664.html

March 29, 2017 Posted by | business and costs, UK | 1 Comment

Despite the turmoil in the nuclear industry, Dominion Energy forges on with new nuclear plans

Amid nuclear industry turmoil, Dominion forges ahead with new nuclear reactor http://www.utilitydive.com/news/amid-nuclear-industry-turmoil-dominion-forges-ahead-with-new-nuclear-react/439122/, @TeamWetDog March 28, 2017

Dive Brief:

  • Dominion Energy continues to advance plans for a proposed third nuclear reactor at its Santa Anna facility in Virginia, even as financial difficulties have imperiled construction of other projects in the region.
  • Southeast Energy News reports federal regulators last week determined that with some “structural changes” to guard against earthquake damage, the proposed reactor could be approved.
  • Dominion’s interest in constructing a new nuclear reactor comes as Westinghouse Electric Co., the nuclear engineering firm overseeing construction facilities in Georgia and South Carolina, prepares to file for bankruptcy at the end of this month.

  • Dive Insight:

    Dominion has not committed to building a third unit at North Anna—so far the utility appears to be keeping its options open in pursuing the license—but despite uncertainty in the industry and objections from clean energy advocates, the project is chugging along.

    But recent bad news within the nuclear sector shows signs of upheaval and uncertainty.

    Toshiba recently announced a $6 billion writedown at its Westinghouse subsidiary, which is managing construction of new nuclear generation at the Vogtle plant in Georgia and V.C. Summer in South Carolina. Reuters reports Westinghouse could file for bankruptcy as early as today.

    MIT Technology Review believes a Westinghouse bankruptcy means an end to new nuclear construction in the United States. The news outlet also reports analysts doubt Toshiba will find a buyer for its stake in Westinghouse, nor any construction partners willing to forge ahead with the nuclear plants it planned to build.

  • The Vogtle and VC Summer plants are years behind schedule and costs are mounting. Development of those plants will likely continue, but within the industry there has been speculation that if Westinghouse fails, it will likely spell the end of new nuclear development for the time being.

    In Virginia, Dominion is spending upwards of $600 million to obtain approval from the federal government. Long-term costs could exceed $19 billion, with the project possibly taking until 2029 to complete. The utility could spend $2 billion in just the planning stages alone. Dominion would use a new kind of nuclear design developed by GE Hitachi Nuclear Energy.

March 29, 2017 Posted by | business and costs, USA | Leave a comment

South Carolina utility officials tight-lipped about nuclear plans, in view of Westinghouse’s financial crisis

State-owned utility doesn’t want to talk about nuclear plans http://www.thestate.com/news/local/article141313913.html 28 Mar 17, MONCKS CORNER, SC  A state-owned electric utility doesn’t want to talk about its plans for dealing with possible construction problems at the V.C. Summer nuclear plant, where it is teaming with South Carolina Electric & Gas Co. to build two additional nuclear reactors.

Santee Cooper officials would not discuss a plan they approved Monday.

The lead contractor of the $14 billion expansion, Westinghouse Electric Co., is experiencing serious financial problems amid media reports that it could file for bankruptcy protection.

Concerns are rising about how much it would cost to complete the plants and, in a worst case, whether the reactor project would be finished. The project already is about $3 billion over budget and years behind schedule.

Santee Cooper senior vice president and general counsel Michael Baxley would only say that a resolution approved by its board Monday in a closed telephone conference “authorizes certain contingency actions by management in the fluid situation with respect to new nuclear construction,’’ The Post and Courier reported.

Baxley would not elaborate, but said the plan would put the Moncks Corner utility “in a position to be able to immediately respond to issues or conditions that may occur with respect to the V.C. Summer project.”

Santee Cooper is responsible for 45 percent of the cost. SCE&G’s parent company, SCANA Corp., is paying the other 55 percent. The two utilities also share the costs of the existing nuclear reactor at the site in Fairfield County.

Santee Cooper spokeswoman Mollie Gore wouldn’t say Tuesday whether the power company would release the resolution.

“Santee Cooper is continuing to monitor the situation,’’ she said. “It is complicated. While they continue to work through the details, Santee Cooper can’t really provide any speculation about this.’’

SCANA has said it has a plan to complete the project, with or without Westinghouse and its parent company, Toshiba.

If Westinghouse sought bankruptcy protection, it could lead to higher rates for utility customers to help pay for the reactors, plant critics have said.

Staff writer Sammy Fretwell contributed.

March 29, 2017 Posted by | business and costs, USA | Leave a comment

As if in a department store sale day, foreign nuclear companies compete to sell their radioactive products to Britain

Foreign companies flock to build nuclear plants in the UK  A South Korean firm is just the latest to be lured by Britain’s atomic amibitions as safety concerns and cost stalk the industry, Guardian, , 26 Mar 17, Nuclear energy faces an uncertain future globally as concerns over safety and cost dog the industry. But in the UK, foreign investors are queueing up to back projects. The latest is South Korea. Its biggest power company is in talks to join the consortium backing a nuclear power station in Cumbria, in a sign of the continuing allure of Britain’s atomic ambitions to international companies. Kepco said last week it was interested in taking a stake in NuGen, which is 60% owned by Japan’s Toshiba and 40% by France’s Engie, confirming what had been an open secret in the industry for months.

Kepco’s president, Cho Hwan-eik, said that once the terms of a potential deal were ironed out, “we will be the first to jump into the race”…….

Potential investors have been drawn by the UK government’s enthusiasm and a nuclear standstill elsewhere, amid lingering safety fears in the wake of the Fukushima disaster and cost overruns at the Flamanville site in France which is using a new reactor design. As a result, South Korea has joined Japan, China and France in showing interest in British nuclear.

It’s pretty simple. We are the only people building new nuclear power stations and we have by far the biggest new nuclear programme outside China for the next 10 years,” said Peter Atherton, an analyst at consultancy Cornwall Energy. “The civil nuclear programme globally doesn’t have any orders.”

 One expert, Mycle Schneider, called the UK the “last hope” for the nuclear construction giants of the world. The Paris-based nuclear consultant said: “In Korea the political situation will dramatically change after the upcoming elections, [probably] not in favour of the nuclear industry. Success overseas will help survival at home. The Japanese industry clearly has no future at home and little prospects abroad [because of Fukushima].”

The UK has also dangled the prospect of economic support for foreign nuclear builders. French state-owned EDF, which is building two new reactors at Hinkley Point in Somerset at a cost of £18bn, struck a subsidy contract with the government that will see it guaranteed twice the wholesale price of electricity for 35 years. The deal means Hinkley would be an “absolute goldmine” when operational, Atherton said.

He said UK financial support was not dissimilar to the deal Kepco has in the United Arab Emirates, where it is building four new reactors paid for by the UAE’s state-owned utility. “The economics of the project, and the economic risks of the project, fall on the host government,” said Atherton.

There is also the prospect that the UK government could take a stake in one of the new nuclear sites. Leaks to Japanese media revealed officials in London and Tokyo had discussed the UK offering state finance to a project led by Japan’s Hitachi to build reactors next to the site of an old one at Wylfa in Wales………https://www.theguardian.com/business/2017/mar/25/foreign-firms-flock-to-build-nuclear-plants-in-uk

March 27, 2017 Posted by | marketing, UK | Leave a comment

Stagnation – the most optimistic term to describe the global nuclear industry

Countries with crisis-ridden nuclear programs or phase-out policies (e.g. Germany, Belgium, and Taiwan) account for about half of the world’s operable reactors and more than half of worldwide nuclear power generation

Lobbyists debate responses to the nuclear power crisis, Online opinion

By Jim Green – , 27 March 2017, Nuclear lobbyists are abandoning the tiresome rhetoric about a nuclear power ‘renaissance’. Indeed they’ve turned full-circle and are now warning about a crisis. Michael Shellenberger from the Breakthrough Institute, a US-based pro-nuclear lobby group, has recently written articles about nuclear power’s “rapidly accelerating crisis” and the “crisis that threatens the death of nuclear energy in the West“.A recent articlefrom the Breakthrough Institute and the like-minded Third Way lobby group discusses “the crisis that the nuclear industry is presently facing in developed countries” and states that “the industry is on life support in the United States and other developed economies”.

‘Environmental Progress’, another US pro-nuclear lobby group connected to Shellenberger, also acknowledges a nuclear power crisis. The lobby group notes that 151 gigawatts (GW) of worldwide nuclear power capacity (38% of the total) could be lost by 2030 (compared to 33 GW of retirements over the past decade).

As a worldwide generalisation, nuclear power can’t be said to be in crisis. To take the extreme example, China’s nuclear power program isn’t in crisis ‒ it is moving ahead at pace. Nuclear power is moving ahead at snail’s pace in some other countries (e.g. Russia, South Korea), while in others the industry faces problems but is not in crisis (e.g. UK, Sweden, Switzerland, Belgium, Ukraine).

Nonetheless, the global picture is one of stagnation and malaise. The July 2016 World Nuclear Industry Status Report provides an overview of the troubled status of nuclear power: Continue reading →

March 27, 2017 Posted by | 2 WORLD, business and costs, Reference | Leave a comment

Nuclear power, once the “golden goose” for small towns – now a liability

Ripples from US nuclear plant closings overwhelm small towns, Star Tribune, By JOHN SEEWER Associated Press  MARCH 26, 2017     “……..For the small, mostly rural towns that are home to 61 U.S. nuclear plants that produce one-fifth of the nation’s electricity, each one has been like the golden goose supplying high-paying jobs and money for roads, police and libraries.

But those same places and their residents are bracing for what may come next due to the soaring costs of running aging reactors that have speeded up the closings of a handful of sites and are threatening at least a dozen more. That’s because once the power stops flowing, so does the money.

Towns that already have seen nuclear plants shuttered are now dealing with higher property taxes, cuts in services and less school funding — a new reality that may linger for decades.

In Wisconsin, the tiny town of Carlton saw the source of roughly 70 percent of its yearly budget disappear when the Kewaunee nuclear power plant closed four years ago. That resulted in the first town tax in its history.

“Financially, we benefited, but now we’re going to pay the price for the next 40 years,” said David Hardtke, the town chairman.

When operations ceased at the Crystal River Nuclear Plant along Florida’s Gulf Coast, “it was like something going through and wiping out a third of your county,” said Citrus County Administrator Randy Oliver.

To make up the difference, property tax rates went up by 31 percent and 100 county workers were let go — so many that Oliver worries there won’t be enough to evacuate residents and clear roads if a major tropical storm hits.

While the nation’s fleet of nuclear power plants wasn’t designed to last forever, closures are happening earlier than expected because repair costs are astronomical and it’s harder to compete with cheaper natural gas-fired plants and renewable energy sources.

The former head of the nuclear industry’s trade group said last year that economic pressures have put 15 to 20 plants at risk of a premature shutdown.

FirstEnergy Corp. will decide by next year whether to close or sell its plant in Pennsylvania and two in Ohio, including Davis-Besse, unless the states change regulations to make them more competitive……… New Orleans-based Entergy Corp., owner of the Palisades nuclear plant in Michigan, announced plans late last year to close in 2018 even though it has a license to keep operating another 14 years…….

what makes recovering tough is that almost all nuclear plants are in out of the way places that have become heavily reliant on them. And they employ specialized workers who are quick to leave for still-operating locations.

To make matters worse, many closed sites can’t be redeveloped for new uses because they’re still storing radioactive waste…….

“We have become a de facto nuclear waste dump. It just sits there, and sits there forever,” said Al Hill, the mayor in Zion, Illinois, where spent nuclear fuel remains stored on prime property along Lake Michigan even though the plant shut down 20 years ago.

On top of that, the closing took away half of the city’s tax base and pushed property taxes to the highest in the state, making it difficult to lure new businesses, Hill said……

It’s had a devastating effect on this town,”  “It’s terrible. Any town with a nuclear power plant in it or near it is in danger of suffering the same fate.” http://www.startribune.com/ripples-from-us-nuclear-plant-closings-overwhelm-small-towns/417116223/

March 27, 2017 Posted by | business and costs, social effects, USA | 1 Comment

The end for nuclear construction in USA – a Westinghouse Electrical nuclear bankruptcy

MIT Technology Review believes a Westinghouse bankruptcy means an end to new nuclear construction in the United States.

Nuclear firm Westinghouse Electric to file for bankruptcy next week http://www.utilitydive.com/news/reports-nuclear-firm-westinghouse-electric-to-file-for-bankruptcy-next-wee/438880/ @TeamWetDog, March 24, 2017

Dive Brief: Toshiba informed its main lenders today it is planning for Westinghouse Electric Co., the nuclear engineering firm overseeing construction of new generating facilities in Georgia and South Carolina, to file for bankruptcy on March 31, according to sources briefed on the matter, Reuters reports. 

  • Reuters also reports exclusively on preparations utilities are making for the potential bankruptcy of Westinghouse.
  • Toshiba acquired a majority stake in Westinghouse in 2006, but last month was forced to write down $6 billion at the company due to difficulties with its projects. The company is managing construction of new nuclear generation at the Vogtle plant in Georgia and V.C. Summer in South Carolina.

  • Dive Insight: Utilities and other parties are gearing up to deal with the ensuing fallout if Westinghouse files for bankruptcy. According to Reuters, utility clients of Westinghouse have hired advisers in preparation for what could be a protracted financial untangling. Toshiba has reportedly hired a consultancy and law firm to help prepare for anticipated bankruptcy claims.

    Both the Vogtle and VC Summer plants are years behind schedule and costs are mounting. While development of those plants will likely continue, there are rumblings that if Westinghouse goes under, it will likely spell the end of new nuclear development for the time being.

    MIT Technology Review believes a Westinghouse bankruptcy means an end to new nuclear construction in the United States. The news outlet also reports analysts doubt Toshiba will find a buyer for its stake in Westinghouse, nor any construction partners willing to forge ahead with the nuclear plants it planned to build.

    In a recent financial presentation, Toshiba said that it intends to “reduce risk at eight plants currently in progress by thoroughly implementing comprehensive cost reduction measures.” Earlier this year, the company indicated regrets over purchasing Westinghouse.

 

March 25, 2017 Posted by | business and costs, USA | Leave a comment

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