Toshiba’s audacious entry into the U.S. nuclear renaissance, once heralded as a major step forward for the industry, has turned into a financial quagmire and a potential major headache for current and future projects involving the Westinghouse AP1000 reactor. The Japanese company said this month it may have to write down billions related to an acquisition made by U.S. unit Westinghouse Electric that was completing the new generation of reactors at two U.S. facilities. The projects, directed by utilities Southern Co. and Scana Corp., are several years behind schedule and billions of dollars over budget. Westinghouse’s purchase of contractor CB&I Stone & Webster Inc. was expected to result in a settlement with the utilities regarding legal disputes over construction delays, supply chain issues for major components, and cost overruns. However, the acquisition turned out not to be a match made in heaven. Westinghouse and CB&I wound up in court over how expensive the delays will be and who should pay for them. Toshiba’s financial woes, and the rate at which it is spending down its cash reserve, put a number of current and future nuclear reactor projects at risk. Without enough cash, or credit, the question is whether the firm will be able to start new projects or finish acquiring components and services for the reactors that are under construction and take them through the final phases of regulatory approval to start operations to generate electricity. These plans include future efforts in the UK to build three Westinghouse AP1000 reactors at the Moorside project. Toshiba will not have the billions in new capital to pay for its 60% equity stake in the project nor will it have a financial profile necessary to make new investors confident enough to share the risk of building the units. Current plans to have the first unit operating by 2024 may need a new majority investors to be realized by that date. In China projects include completion of four reactors (Sanmen 1 & 2, Haiyang 1 & 2) under construction in China, and in the U.S. there are four more, two in Georgia (Vogtle) and two in South Carolina (V C Summer).
Energy Collective 2nd Jan 2017 read more »