Another month in UK’s failing new nuclear programme

The ongoing collapse of the Moorside nuclear project has hit the headlines. But the French nuclear industry continues to be mired in scandal as EDF starts pouring nuclear safety critical concrete at Hinkley. And now we learn that the chief executive of Wylfa Newydd developer Horizon Nuclear Power says he needs to raise cash or the Anglesey project will not go-ahead

Moorside Collapse

On 29th March 2017, Westinghouse Electric Company, a subsidiary of Japanese company Toshiba and the largest historic builder of nuclear power plants in the world, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. (1)

Toshiba now owns 100% of the NuGen consortium which is planning to build 3 AP1000 reactors at Moorside next to Sellafield in Cumbria afterench company Engie (33% owned by the French Government) exercised its right under the NuGen consortium agreement to sell all of its shares to Toshiba in the “event of a default”. Toshiba’s decision to place Westinghouse – into bankruptcy protection qualifies as such an event. (2)

Engie is the seventh international energy utility to give up on UK new nuclear build (8th if you count Siemens). Over the past decade, on top of Toshiba, E-on (Wylfa), RWE Npower (Wylfa), Iberdrola (Moorside), SSE (Moorside), and Centrica (Hinkley Point) have all pulled out of developing new nuclear reactors in the UK. (3)

This leaves a very limited field of companies for the UK to approach in its hunt for a new partner for the Moorside scheme. South Korea’s KEPCO remains the most likely suitor, but Reuters reports that the giant utility won’t be rushed. It is one of few utilities remaining with global nuclear ambitions, but despite the fact that the AP1000 reactor has now received approval from the Office for Nuclear Regulation and the Environment Agency may still want to use its own technology – the APR1400. This would delay the development by a further four to five years whilst the South Korean reactor is put through its Generic Design Assessment by UK Regulators. Greg Clark, the Business Secretary, was in Seoul for talks at the beginning of April, but offered no evidence of concrete progress in the negotiations. (4)

French nuclear scandal

EDF, Areva and the French nuclear regulator ASN have known since at least 2005 that Areva’s Creusot Forge factory was not capable of producing nuclear safety compliant components. Yet the factory has been allowed to continue manufacturing components which have now been found to contain anomalies, including the bottom and lid for the reactor pressure vessel (RPV) for the EPR at Flamanville. (5)

The Creusot Forge is under investigation by ASN after it was discovered to have produced potentially defective parts and substandard safety reports for reactors around the world. But the letters from 2005 and 2006 – obtained by France Inter – show that EDF and Areva were told by the ASN about “numerous incidents” at the facility, including “discrepancies during inspections”. This will raise serious concerns about EDF and Areva’s new nuclear project at Hinkley Point. (6)

The regulator – ASN – has been seriously at fault, according to the Observatoir du Nucleaire, since it has said nothing for many years about the criminal practices at Le Creusot. It says ASN is no less guilty than Areva and EDF because, although it was fully aware of the serious problems, it authorized EDF to install the pressure vessel in the EPR at Flamanville in December 2013. It is clear, says the website, that ASN is not able to withstand pressure from EDF and politicians who accuse them of seriously harming the industry if they enforce safety regulations. (7)

EDF’s oversight of AREVA, which will supply the Hinkley Point C reactors was questioned in an internal document by the UK Office for Nuclear Regulation (ONR). In an ONR report about a visit to Le Creusot dated 16th December ONR said the nuclear safety culture at Creusot fell short of expectations and warned about the implications for Hinkley Point C. ONR said it has since decided to implement a series of additional inspections of EDF and its supply chain to ensure all components are manufactured to the required standard. The ONR report said after an inspection in late 2016, that an international team from France, Canada, the United States, China, Finland and Britain had concluded that the nuclear safety culture at Le Creusot Forge foundry fell short of what regulators expect from a major supplier of nuclear equipment. It added that improvement measures ordered by ASN were not yet effective and said despite the prohibition of the use of correction fluid on documents at the foundry, the inspectors found evidence of its continued use. (8)

Who will put up the cash for Wylfa?

Hitachi Ltd, the owner of Horizon nuclear, which is proposing to build two Advanced Boiling Water Reactors with a total capacity of 2.7MW at Wylfa on Anglesey, is set to lose tens of billions of yen this financial year after withdrawing from a uranium enrichment joint venture in the US. Hitachi is expected to report a 70 billion yen ($620 million) non-operating loss by the time books were closed at the end of March. The deficit is largely attributed to the joint venture GE Hitachi Nuclear Energy Inc. withdrawing from the uranium enrichment project. Hitachi no longer expects any profits from the North Carolina-based company, of which it owns 40% and the rest by General Electric. Hitachi and GE were expecting more nuclear power plants to be built when they launched the joint fuel enrichment business, but orders have been sluggish across the globe, forcing the project to be shelved. Nevertheless, Hitachi says it will be sticking with its nuclear power business and plans to proceed with its project to build Wylfa by ensuring costs are thoroughly managed. (9)

The chief executive of Horizon Nuclear, Duncan Hawthorne, says funding is the key issue to ensure the nuclear plant gets built. Wylfa Newydd would be the “showcase plant” for Horizon and Hitachi and important for the UK and Japanese Governments, which means there is huge resolve to get the project done successfully. But without the private investment and Government support the £14bn project would not happen. He said the deal that was struck for Hinkley Point would not work for Wylfa Newydd due to the fact they are private investors. Hinkley is supported by state backed Chinese and French enterprises. Hitachi are funding the project to the ‘Final Investment Decision’, with around £2.5bn of cash. He said he was very aware of the need to keep the Anglesey community behind the project, showing them what benefits the scheme could bring. He said: “Without community support we can’t do anything.” (10)

A longer version of this article appears in nuClear News No.94

(1) World Nuclear Industry Status Report 2nd April 2017
(2) FT 4th April 2017
(3) NFLA 4th April 2017 
(4) Reuters 5th April 2017 
(5) Energydesk 31st March 2017 
(6) Energydesk 31st March 2017 
(7) Nuclear Observer 31st March 2017 
(8) Reuters 24th March 2017  and Guardian 24th March 2017
(9) Asahi Shimbun 2nd Feb 2017 
(10) Daily Post 5th April 2017 

Share

Published: 12 April 2017