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Thu November 15 2018

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Toshiba shuts NuGen and walks away from Moorside

8 Nov Japanese electrical giant Toshiba Corporation is closing its UK nuclear power plant business after failing to find a buyer for it.

The early vision of NuGen
The early vision of NuGen

Toshiba subsidiary NuGeneration Ltd (NuGen) is a UK new nuclear development company that had been planning to build and operate the £15bn Moorside power station, near Sellafield in west Cumbria.

But Toshiba’s board of directors has today decided to close Nugen and withdraw from nuclear power plant construction in the UK at a cost of £100m.

The planned NuGen plant in Moorside has been in crisis since Toshiba's nuclear subsidiary Westinghouse Electric filed for bankruptcy protection in 2016.

The announcement comes after 18 months of unsuccessful negotiations with potential buyers and much speculation about Korean or Canadian intervention to rescue the project.

Although NuGen will now not be taking the project forward, the Moorside site in Cumbria remains a site designated by the UK government for nuclear new build, and it is now for the Nuclear Decommissioning Authority as the owner of the site and the government to determine its future, NuGen said.

Toshiba acquired 60% of NuGen in June 2014 and subsequently acquired the remaining 40% of NuGen’s shares from France’s Engie in 2017, when Engie exercised its right to sell its entire shareholding to Toshiba in the wake of Westinghouse's collapse.

Under Toshiba’s policy to eliminate risks related to its overseas nuclear power construction business, Toshiba tried to get new investors to participate in NuGen or take it over, but without success.

The company’s statement said: “After considering the additional costs entailed in continuing to operate NuGen, Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project, and has resolved to take steps to wind-up NuGen.”

The GMB union called for swift government intervention. National secretary Justin Bowden said: “A new nuclear power station at Moorside in West Cumbria is vital for the future energy security of the country and the economy of West Cumbria. That project now hangs in the balance because politicians were foolish enough to rely on foreign companies and governments for our key energy infrastructure needs. Government must now act to secure our energy future.

“A golden opportunity exists to take control and develop a small modular nuclear reactor (SMR) in a part of this country which has a groundbreaking nuclear past that can be repeated in the future.

"The lessons from the collapse of Toshiba should have been well and truly learned long ago - relying on foreign companies and countries for our essential energy needs is utterly irresponsible.

“The Nuclear Decommissioning Authority (NDA) must be re-tasked and renamed as the Nuclear Development Agency to take over the site and develop a new SMR nuclear power station at Moorside. As well as eradicating the uncertainty and securing future electricity supply, a newly formed Nuclear Development Authority taking control at Moorside would make complete sense for taxpayers. It is time for the government to step up.”

The Civil Engineering Contractors Association (CECA) also wants swift government intervention to identify a preferred bidder to take over the Moorside project. CECA Northwest director Guy Lawson said: “The decision to wind up NuGen is a potential hammer blow to the nuclear sector in Cumbria, and the local economy. The area is home to the UK’s greatest concentration of companies and workers with genuinely world-leading capability in nuclear delivery and operation.

“It is essential that this competitive advantage and the nuclear skills base are maintained, through sustained investment in nuclear new build, harnessing this capability and delivering low carbon energy to power the UK economy. CECA has long campaigned for new nuclear as a vital component of the mixed portfolio of electricity generation the UK will need as we transition towards a low-carbon economy.

“With Toshiba’s decision now made, we call on the government to act promptly, working with industry to consider how the Moorside project can continue.”

MPU

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