Toshiba Corp.’s nuclear writedown is reverberating in the U.K., where it may derail plans to build new reactors using the Japanese company’s technology.
Toshiba’s $6.3 billion writedown of its nuclear business on Tuesday prompted the company to say it will stop building new nuclear plants. The electronics conglomerate said it may also sell nuclear assets, including a 60 percent stake NuGeneration Ltd., which plans to develop a nuclear plant in Moorside in northwest England
Wavering commitment to the Moorside project could reopen debate over the role of nuclear power in the U.K. In September, Prime Minister Theresa May’s government backed controversial plans to build two new nuclear reactors at Hinkley Point which will cost British consumers as much as 21 billion pounds ($26 billion) in subsidies. Expectations of a U.K. nuclear revival has drawn international investors from China, France and Japan, a point of concern for some who want to maintain control over national resources.
U.K. Business and Energy Secretary Greg Clark said there was “continued commitment” to the Moorside project after speaking with Toshiba and NuGeneration.
“The U.K. Government is committed to new nuclear as an important part of our energy mix, having commissioned the first new nuclear power station in a generation,” Clark said in an e-mail statement. “We continue to work closely with partners to see Moorside built.”
New reactors scheduled in these U.K. regions
Toshiba may also sell Westinghouse Electric Co., which developed the next-generation AP1000 reactor design which it had slated for the U.K., President Satoshi Tsunakawa told journalists on Tuesday. Those reactors, which have been plagued by cost overruns and delays, were scheduled to be used at the Moorside plant, which had originally been planned to come online in 2024 with 3.4 gigawatts of capacity.
“Uncertainty over the Toshiba deal shows exactly why foreign investors shouldn’t be left to keep Britain’s lights on,” said Chris Jukes, senior organizer at trade union GMB. The union, which counts nuclear workers among its 619,000 members, wants the government to commit to the Moorside investment if Toshiba pulls out, he said.
U.K. energy officials face a dilemma of securing adequate and affordable energy supplies that also allow them to meet climate targets. The U.K. wants to shut all of its coal plants by 2025, creating a gap in its energy mix. Nuclear has been seen as a low-emission solution, provided that international investors could be brought in to help finance the high upfront capital costs of building nuclear reactors.
Toshiba isn’t the only nuclear developer that could potentially face financial challenges in the U.K.
Electricite de France SA, which is developing Hinkley Point with finance from China General Nuclear Power Corp., lost its chief financial officer months before the the project was approved. Thomas Piquemal quit after warning that Hinkley could jeopardize EDF’s financial health.