Toshiba Corp is committed to Moorside despite announcing today it would reduce its exposure to reactor construction projects outside Japan, the head of its UK joint venture, NuGeneration, has said. The Japanese electronics conglomerate reported a net loss of JPY390 billion ($3.4 billion) in the year to March 2017 and said it would book a JPY712.5 billion ($6.3 billion) loss on its US nuclear unit.
NuGen, of which Toshiba owns 60% and France's Engie 40%, plans to build a nuclear power plant of up to 3.8 GWe gross capacity at the site in West Cumbria, using AP1000 nuclear reactor technology provided by Westinghouse. Toshiba, which bought Westinghouse in 2006, warned in December last year that it might have to write off "several billion" dollars because of the purchase in 2015 of US construction firm CB&I Stone & Webster.
NuGen said it acknowledged today's announcement that Toshiba's review of the future of its overseas nuclear business is complete and that it remains committed to developing Moorside. NuGen CEO Tom Samson said the project had made "significant progress" since Toshiba became its majority shareholder in 2014.
"The site has already been proven as suitable for three Westinghouse AP1000 reactors, two phases of consultation have found the public overwhelmingly supportive of the need for new nuclear and have helped shape the plans for Moorside," Samson said.
"The UK government is supportive of NuGen, as a maturing and highly skilled nuclear organisation, and has remained firmly committed to new nuclear - stating that nuclear has a crucial role to play in securing our future energy needs, especially as we look to move to a low-carbon society," he added.
Toshiba said today it would "consider participating in the Moorside project without taking on any risk from carrying out actual construction work". It added: "As planned from the beginning, Toshiba will seek to sell the shares to interested parties."
A NuGen representative said the company "had not yet secured an EPC structure to build at the site, but did not intend to utilise Toshiba's services".
"It was always NuGen’s plan to identify an independent constructor," he said.
"There is a universe of financing options available to NuGen to progress the Moorside project and it remains our intention to bring in shareholders to support this project," he added.
The Financial Times reported yesterday that senior ministers in the UK government were "wrangling over how to support" nuclear power plant projects, with some senior Treasury officials "hostile to" direct state subsidy.
NuGen is in "constant dialogue" with government departments on a range of issues and will continue to engage with them to bring the project forward, the representative said.
"The UK government through Electricity Market Reform has set out a stable financing regime in the form of 'Contracts for Difference' which provides price certainty to investors and is an attractive feature of the UK market," he added.
Ahead of Toshiba's financial statements today, Shigenori Shiga resigned as chairman. Shiga is taking "management responsibility" for the company's loss due to the goodwill and impairment cost it would record in relation to Westinghouse's acquisition of CB&I Stone and Webster, Toshiba said. Shiga will remain an executive officer at Toshiba until a shareholders meeting in June, "and concentrate on solving issues related to Westinghouse", it said.
Justin Bowden, national secretary for energy at the UK's GMB trade union, said Shiga's resignation "underlines the gravity" of Toshiba's situation, "but must not be allowed to jeopardise the future of Moorside".
"It is time for government to show leadership and take over the reins at Moorside," Bowden said. "The fiasco with Toshiba shows exactly why relying on foreign companies for our energy needs is just plain stupid."
Future of nuclear business
Toshiba said it would meet its "social responsibilities" in Japan by assisting with the restart of idled nuclear power plants, maintenance operations and reactor decommissioning.
Overseas it said it would "analyse strategic alternatives". In new plant projects, it will "exclude the risk inherent in construction work" and focus on equipment supply and engineering. It will also "reduce risk" at the eight plants Westinghouse is building in the USA and China through "comprehensive cost reduction measures".
Westinghouse is building four AP1000 units in China, two each at Sanmen in Zhejiang province and Haiyang in Shandong. It is also building four AP1000 reactors in the USA - two each at Vogtle and Summer.
Hot functional testing was completed at Sanmen unit 1 in December, and Toshiba said today that initial fuel loading and test operation would follow.
In November, the first reactor pressure vessel (RPV) was lifted into place at Georgia Power's Vogtle nuclear construction project in Georgia. Vogtle 3's RPV was lifted into place two days after the placement of the CA01 module was completed at Vogtle 4. Georgia Power said work would now begin to place bulk commodities such as piping, pumps and cabling throughout Vogtle 3's reactor system. Preparations will also begin for the installation next year of the first of the unit's steam generators. Summer unit 2's RPV was installed in August.
Toshiba said today that, in India, Westinghouse would exclude construction from the scope of its work and focus on supply of equipment and engineering. "Legislation on nuclear damage liability is necessary to promote projects in India," it added.
In December, the Indian government approved an increase in capacity of the proposed Kovvada nuclear power plant for six 1208 MWe units. The Nuclear Power Corporation of India then allocated the Kovvada site for construction of six Westinghouse AP1000 reactors. The Indian and US governments have called for continued engagement between the two companies towards finalising the contractual arrangements for the six Kovvada units by June this year.
Toshiba said the financial figures announced today were provisional and under review by an independent auditor.
Researched and written
by World Nuclear News