Westinghouse Electric Company which helped drive the development of nuclear energy and the electric grid itself, filed for bankruptcy protection on Wednesday, casting a shadow over the global nuclear industry. The filing comes as the company’s corporate parent, Toshiba of Japan, scrambles to stanch huge losses stemming from Westinghouse’s troubled nuclear construction projects in the American South. Now, the future of those projects, which once seemed to be on the leading edge of a renaissance for nuclear energy, is in doubt. “This is a fairly big and consequential deal,” said Richard Nephew, a senior research scholar at the Center on Global Energy Policy at Columbia University. “You’ve had some power companies and big utilities run into financial trouble, but this kind of thing hasn’t happened.” Westinghouse, a once-proud name that in years past symbolized America’s supremacy in nuclear power, now illustrates its problems. Many of the company’s injuries are self-inflicted, such as a disastrous deal for a construction business that was intended to control costs and instead precipitated the events that led to the filing on Wednesday. Over all, Toshiba has been widely criticized for overpaying for Westinghouse.
New York Times 29th March 2017 read more »
Westinghouse, Toshiba’s US nuclear unit, has filed for US bankruptcy protection. The US firm has struggled with hefty losses that have thrown its Japanese parent into a crisis, putting the conglomerate’s future at risk. Westinghouse has suffered huge cost overruns at two US projects in Georgia and South Carolina. Toshiba said the bankruptcy would not affect Westinghouse’s UK operation, which employs more than 1,000 workers. However, the firm warned that the writedown of its US nuclear business could see Toshiba’s total losses last year exceed 1 trillion yen ($9.1bn; £7.3bn), almost triple its previous estimate.
BBC 29th March 2017 read more »
Times 30th March 2017 read more »
FT 30th March 2017 read more »
Toshiba has said publicly that its Westinghouse-related liabilities totaled $9.8 billion as of December. The Japanese conglomerate is hoping to use the bankruptcy process to try and protect its other businesses and firewall Westinghouse’s mounting losses. A cross-border team from Skadden, Arps, Slate, Meagher & Flom is advising Tokyo-based Toshiba on Westinghouse’s bankruptcy through corporate restructuring partners Mitsuhiro Kamiya, Van Durrer, Chris Mallon and Scott Hopkins, banking partners David Kitchen and Mark Darley, international litigation and enforcement partner David Leland, corporate partner Allison Land, labor and employment partner David Schwartz and CFIUS practice head Ivan Schlager. Skadden advised Toshiba in early 2006 on its $5.4 billion acquisition of Westinghouse from British Nuclear Fuels plc. Toshiba then sold a 20 percent stake in Westinghouse to The Shaw Group Inc. In 2011, Skadden’s Kamiya helped Toshiba re-acquire that stake in another $1.6 billion deal.
American Lawyer 29th March 2017 read more »
The US bankruptcy filing by nuclear giant Westinghouse has been branded a major blow to the prospects for new atomic power globally. The nuclear arm of Toshiba proudly states “we are nuclear energy” on its website, a boast underpinned by its technology being in around half the world’s reactors. But the US firm was humbled on Wednesday when it filed for Chapter 11 bankruptcy protection in a New York court, in a bid to reorganise and limit losses for its Japanese owner. Westinghouse’s plight stems from a $6.1bn (£4.9bn) writedown because costs have overrun on the two plants it is building in Georgia and South Carolina, the first new US nuclear power stations being built for decades. Toshiba said liabilities for its US unit totalled $9.8bn. Mycle Schneider, a Paris-based consultant and author of an annual global nuclear report, said that although utilities and companies building nuclear plants had gone bust before, it was new to see a bankrupt nuclear builder. “If Westinghouse was nuclear energy, where does that leave nuclear energy after the Westinghouse bankruptcy? In the dark. This development illustrates that there is no bright future for nuclear new-build and that new nuclear plants will be irrelevant on the international power market,” he told the Guardian. Peter Atherton, an analyst at Cornwall Energy, said while the bankruptcy filing was a “big move” globally, it was unlikely to change circumstances much in the UK. “Toshiba is clearly looking to ringfence the US problem. But financing Moorside was always going to be a big problem.” Another major nuclear builder, South Korea’s Kepco, last week ruled out buying Westinghouse but said it was considering taking a stake in NuGen. However, anti-nuclear campaigners said that would risk Kepco, which is also building reactors in the UAE, repeating Toshiba’s mistakes. Ai Kashiwagi, an energy campaigner at Greenpeace Japan, said: “The Moorside reactors are of the same design that sunk Westinghouse’s nuclear business. While Kepco may be desperate to access the UK nuclear market, they would be making the same disastrous mistake that Toshiba made with its purchase of Westinghouse a decade ago.”
Guardian 29th March 2017 read more »
Work was still under way on Wednesday at the two US nuclear construction sites that have forced Westinghouse into bankruptcy, but the future of the projects has been thrown into doubt. Underlying Toshiba’s decision to seek Chapter 11 bankruptcy protection for Westinghouse, its US nuclear engineering division, is the idea that a line can be drawn under the financial damage that can be done to the parent company. But while bankruptcy may help limit the liabilities that Toshiba faces for the troubled plants, where costs have soared past their original budgets, it is just the start of what is likely to be a long argument over the future of the projects. The certainty that Toshiba is hoping for still looks a long way off. There is little clarity on how talks between Westinghouse and the owners of the US nuclear projects will play out during the restructuring process. All sides say they are still determined that the new Westinghouse AP1000 reactors being built at the Vogtle plant in Georgia and the VC Summer plant in South Carolina will be completed. The first of the reactors is scheduled to come online in 2019, with the others following the year after. The joint ventures that own the plants, led by Georgia-based Southern Company at Vogtle, and South Carolina-based Scana at VC Summer, say they have been preparing for a possible bankruptcy at Westinghouse, and are exploring options for ensuring that work can go on. The lack of clarity provided by the Chapter 11 filing, say people close to Toshiba’s major creditor banks, has raised fears that it will not, in fact, ringfence the Japanese conglomerate against further problems at Westinghouse. One analyst, who declines to be identified, says: “There is a strong sense among the creditors that this will not be the end of it because they are beginning to understand just how blurred some of the edges are in the US nuclear business. Do they think there is a huge black hole they still don’t know about? No. But they are definitely nervous that, even now, they don’t have the full picture.”
FT 29th March 2017 read more »
Nick Butler: The question is what happens next, and the key player in answering that is the Japanese government which must now decide whether it wants the country to remain a significant player in the business of civil nuclear power. Within Japan over recent years the focus of the nuclear sector has been on the restoration of confidence necessary to reopen the internal nuclear plants which were closed after the Fukushima disaster in 2011. Progress has been slower than expected – just two stations have restarted and another 24 are seeking regulatory approvals to come back on-stream. Given the need to rebuild public confidence the process cannot be rushed and in many parts of Japan there is serious local opposition. The underlying strategy of the country’s once all powerful nuclear establishment has been to develop an export business based on the country’s undoubted skills in the nuclear industry and the reach of its major companies such as Mitsubishi Heavy Industries, Toshiba and Hitachi. That strategy has now been put in jeopardy. Toshiba understandably wants to exit from the nuclear sector and to focus on its core businesses. Selling Westinghouse will not be easy but its technology is sound and does not carry the design and construction problems associated with EDF’s large scale EPR reactors, none of which has yet been commissioned for use. For those who remain in the nuclear business in Japan the key issue is financial. Hitachi and Mitsubishi are financially secure. But you would have said that about Toshiba until the Westinghouse problems became evident. The fact is that the costs of any new nuclear plant run into billions of dollars and if anything goes wrong the scale of the numbers can swamp even the strongest balance sheet. Hitachi, for instance, which like Toshiba had been planning new nuclear activity in the UK and elsewhere, would need to raise between $10bn and $15bn for each construction project. Once plants are up and running the economics look reasonable because long-term sales contracts provide a secure rate of return. The problem is the construction phase. That is when the risk falls entirely on the company and when things tend to go wrong. EDF’s problems with construction at Flamanville in Northern France and Olkiluoto in Finland are the most serious but the fact is that most new nuclear projects around the world are behind schedule and over budget. The Japanese government has repeatedly reasserted its belief in nuclear power and the nuclear industry since Fukushima. But if it wants the industry to survive it will have to take some radical action. The first step is a consolidation of an industry that is too fragmented to be globally competitive. Japan has too many different entities competing for the limited number of new nuclear contracts – and probably too many competing reactor designs. Standardisation is the best way to reduce costs and create a strong supply chain. The sector needs to be consolidated around a single Japanese nuclear corporation that takes in all the main strands of the existing businesses including Toshiba. Such a company would be the obvious buyer of Westinghouse and of Toshiba’s remaining global activities, including the pro posed new station at Moorside in Cumbria, north-west England. On a global basis, nuclear is the only source of energy where costs are rising. It can provide substantial volumes of base load power but the market is changing thanks to technology and its technical advantages are being eroded. To stay competitive, nuclear has to reduce its costs and to demonstrate consistently that plants can be built on time and on budget. Japan has the technical capacity to do that and within its own industry a good track record on costs and safety. The industry survived Fukushima. But now it has to demonstrate that it can survive in competitive terms in a fast-moving energy market.
FT 30th March 2017 read more »
The rapidly-evolving nuclear power crisis escalated dramatically yesterday (March 29) with the announcement that US nuclear giant Westinghouse, a subsidiary of Japanese conglomerate Toshiba, has filed for bankruptcy. The Chapter 11 filing took place in the US Bankruptcy Court for the Southern District of New York in New York City. Toshiba and Westinghouse are in crisis because of massive cost overruns building four ‘AP1000’ nuclear power reactors in the southern US states of Georgia and South Carolina. The combined cost overruns for the four reactors amount to about US$11.2 billion (A$14.5 billion) and counting.
FoE Australia 30th March 2017 read more »