Japan’s electronics giant Toshiba is on the verge of bankruptcy, and the Financial Times is reporting that this is attributable to Toshiba’s decision to go big into a revival of nuclear power through its acquisition of Westinghouse:
In a humiliating setback for a conglomerate that had only recently touted its nuclear business as a core growth driver, Toshiba said it would pull out of constructing new plants overseas and focus on providing less lucrative but lower-risk reactor designs and nuclear equipment. One investor says the potential downsizing of Toshiba’s nuclear ambitions could make what remains of the company difficult “even for a contrarian investor to consider.”
It is also a damaging blow to the outlook for the nuclear industry worldwide. Toshiba’s decision to give up on bidding to be a lead contractor on nuclear power plant projects will dramatically reduce its ability to compete with rivals from China, South Korea and Russia, and limit the options for countries seeking to build reactors. . .
Toshiba bought the US-based Westinghouse nuclear business from the British government’s BNFL for $5.4bn in 2006, in the hope of profiting from an upturn in reactor construction that was optimistically dubbed the “nuclear renaissance”. Instead, the Westinghouse deal has brought Toshiba to its knees.
Toshiba isn’t alone:
As Toshiba was reporting its huge writedown, the French utility EDF, which has also been beset by problems with its new-build nuclear projects, warned of a “challenging” 2017 after being hit by weak power prices and problems with some existing reactors last year.
What does it all mean? Is nuclear power still not ready for prime time? Michael Shellenberger, one of the rare pro-nuke advocates among environmentalists, breaks it down for us over at his terrific site Environmental Progress:
Nuclear energy is, simply, in a rapidly accelerating crisis:
- Demand for nuclear energy globally is low, and the new reactors being built may not keep up with the closure of nuclear plants around the world. Half of all U.S. nuclear plants are at risk of closure over the next 13 years.
- Japan has only opened two of its 42 shuttered nuclear reactors, six years after Fukushima. Most experts estimated it would have two-thirds open by now. The reason is simple: low public acceptance.
- While some still see India as a sure-thing for nuclear, the nation has not resolved key obstacles to building new plants, and is likely to add just 16 GW of nuclear by 2030, not the 63 GW that was anticipated.
- Vietnam had worked patiently for 20 years to build public support for a major nuclear build-out before abruptly scrapping those plans in response to rising public fears and costs last year. Vietnam now intends to build coal plants.
- Last month Entergy, a major nuclear operator, announced it was getting out of the nuclear generation business in states where electricity has been de-regulated, including New York where it operates the highly lucrative Indian Point.
With the French nuclear industry crippled and Toshiba-Westinghouse out of the nuclear construction business, the West is effectively ceding the future of nuclear energy to China, Korea and Russia.
From here Michael gives a synoptic history of the difficulties nuclear power has faced from atrophied engineering experience to—especially—over-regulation. Worth reading the whole thing. But for now the nuclear picture looks bleak.