Moorside Nuclear Braced For Toshiba PullOut
By Paul Homewood
This story is behind a paywall at the FT, but other sites, such as this one at World Money Grid, have picked it up:
One of the new nuclear plants that Britain is relying on for energy security in coming decades has been plunged into doubt as Toshiba reviews the future of its crisis-hit nuclear power business.
The UK government is bracing for the withdrawal of Toshiba from the Moorside project in Cumbria as the Japanese conglomerate faces a multibillion-dollar writedown stemming from losses in its US nuclear division.
Toshiba said last week that it would “reconsider the future of the overseas nuclear business” and there is a growing acceptance within the UK government and nuclear industry that Moorside will need new backers if the project is to survive.
Moorside is among the most advanced of several new nuclear plants planned by the UK to replace old reactors due to be taken out of service in years ahead and dirty coal-fired power stations set to be phased out completely by 2025.
So far only one of these proposed plants — to be built by EDF of France at Hinkley Point in Somerset — has been given a formal go-ahead but Moorside, near to the existing Sellafield nuclear site, is among the next in line for construction. It would sit in the parliamentary constituency of Copeland where a by-election will be held on February 23.
Collapse of Moorside would be a blow for the area because nuclear power has been one of the biggest employers in west Cumbria since the world’s first commercial nuclear reactors were opened at Sellafield in the 1950s. Supporters of the project are looking for government assurances on the project’s future.
“It looks increasingly like bad business investments may have busted Toshiba’s role . . . at Moorside,” said Justin Bowden, national secretary of the GMB union. “The time is right for the UK government to . . . fill any funding gaps.”
The UK government has signalled its willingness to consider investing in nuclear power by entering talks with the Japanese government about financing for a different project led by Hitachi, another Japanese conglomerate, at Wylfa in Anglesey, according to people briefed on the discussions.
Direct UK government financing would represent a big shift in policy; until recently Whitehall has balked at exposing public money to the high costs and risks involved in nuclear reactor construction. However, people involved in discussions with the government say Theresa May’s administration is more open to the idea as part of its wider ambitions to rebuild the UK nuclear supply chain and maintain energy security.
It looks increasingly like bad business investments may have busted Toshiba’s role … at Moor
It was already known that Toshiba’s financial problems would require the recruitment of additional investors to keep Moorside on track but new reactor technology may now also be needed if the Japanese company pulls out altogether.
That could open an opportunity for Korea Electric Power Corporation (Kepco), the South Korean energy group, to offer its APR-1400 reactor as a replacement for the AP1000 model built by Toshiba’s US nuclear unit, Westinghouse.
Multiple people in the nuclear industry said this was the most realistic chance of salvaging the project if Toshiba quits because South Korea was already known to be keen on entering the UK nuclear market.
Kepco has been in negotiations for months about investing in Nugen, the consortium made up of Toshiba and Engie of France which is planning to build Moorside, according to people involved in the process.
Until recently, this was seen as an opportunity for Kepco to establish a foothold in the UK before seeking openings for its own technology in subsequent projects. But Toshiba’s likely exit is rousing speculation that Kepco could take leadership at Moorside.
Government needs to create the right conditions for countries like China, Korea and Russia to come to the UK, invest and build
The first APR-1400 reactor near Busan in South Korea became operational last year and further seven reactors are under construction in Korea and in the United Arab Emirates.
Nugen had been aiming to have its power station online by the mid 2020s but the replacement of Westinghouse technology with the APR-1400 would set construction back at least the four years it would take for the Korean reactor to gain approval from the UK nuclear regulator.
Toshiba declined to comment and Kepco could not immediately be reached for comment.
Tim Yeo, chairman of New Nuclear Watch Europe, a group which advocates for nuclear power, said international vendors should be invited to compete in an open tender. “Government needs to create the right conditions for countries like China, Korea and Russia to come to the UK, invest and build,” he said.
The British government last month gave the go-ahead for the Office for Nuclear Regulation, the UK regulator, to start assessing the Hualong One reactor that China General Nuclear, a Chinese government-owned company, is planning to use at a proposed plant at Bradwell, Essex. However, some people in government are cautious about the security implications of adopting Chinese nuclear technology.
If true, this opens up a barrel load of problems for UK energy policy.
With EDF ever more unlikely to build another plant after Hinkley, the Moorside project was being banked on to provide the baseload desperately needed to replace fossil fuel plants.
The only alternative is fitting CCS technology to CCGT plants, but this looks as much of a pipedream as ever.
Whichever way we jump, it seems our future energy security is in the hands of foreign governments. How on earth did we get to this predicament?