Engineering news
However, NuGeneration (NuGen), a British subsidiary of Westinghouse, has said that it is “business as usual” at Moorside – which is set to be Europe’s largest nuclear new-build site.
Westinghouse has confirmed that it has filed for Chapter 11 bankruptcy protection in the US after failing to deal with large cost overruns for AP1000 reactor projects in Georgia and South Carolina. Chapter 11 is a form of bankruptcy that gives struggling corporations time to reorganise their business, debts and assets.
This decision follows an announcement in January by parent company Toshiba that Westinghouse may have overpaid – by several billion dollars – for its nuclear construction and services business in America.
“Today, we have taken action to put Westinghouse on a path to resolve our AP1000 financial challenges while protecting our core businesses,” said Westinghouse interim chief executive José Emeterio Gutiérrez.
Westinghouse has obtained $800 million in debtor-in-possession financing from a third-party lender to help fund and protect its core businesses during its reorganisation.
This financing will fund Westinghouse’s core businesses, including supporting operating plants, nuclear fuel and components manufacturing and engineering as well as decommissioning, decontamination, remediation and waste management.
Westinghouse said it has reached an agreement with each owner of the US AP1000 projects to continue work on them during an initial assessment period.
A statement from Westinghouse confirmed that it will continue its existing projects in China as well as “pursuit of other potential projects in the future”.
The company stressed that its operations in Asia, the Middle East, Africa and Europe will not be impacted by the Chapter 11 filing.
However, concerns have been raised over whether plans to build three AP1000 reactors at the Moorside nuclear power station will go ahead. Westinghouse subsidiary NuGen originally planned for the station to come online in 2024 with 3.4GW of new nuclear capacity for the UK. The site in west Cumbria is expected to bring more than 20,000 jobs to the region.
GMB, the union for nuclear workers, has demanded that the government provide reassurance on the “short-, medium- and long-term future of Moorside”.
A NuGen spokesman said that it will continue to develop the Moorside project to deliver three AP100 reactors, by working alongside the technology supplier Westinghouse and the shareholders, Toshiba and Engie.
NuGen stressed that it is “business as usual” for Moorside but declined to comment on “specific financial issues relating directly to Toshiba or Westinghouse”.
GMB raised concerns late in 2016, when Toshiba initially alerted investors that it was in financial difficulty. At the time NuGen appeared to say that it was confident the Moorside project was still on track on the basis that Toshiba initially hoped to sell its majority stake in Westinghouse.
Toshiba was also twice given permission to delay reporting its earnings until 11 April 2017.
The nuclear services business brings in about one-third of the industrial giant's revenue.
Toshiba said it expects a £5 billion write-down because some of its US nuclear assets are worth far less than estimated.
GMB senior organiser Chris Jukes said that a collapse of Westinghouse could delay the Moorside project or “even put its entire future in limbo”.
“This project could bring thousands of jobs to west Cumbria, lead to huge regeneration and infrastructure investment and provide as much as 7% of the UK's domestic energy needs,” said Jukes.
Last month GMB criticised prime minister Theresa May for ducking “the central question” over concerns put to her on the future of the Moorside nuclear project. May said that business secretary Greg Clark had spoken to NuGen and Toshiba about their investment in the UK and that the Conservatives are “committed to the nuclear industry”.