Westinghouse Bankruptcy Deals a Blow to America's Nuclear Renaissance
The company is building America's first new reactors in decades, but has suffered from a boom in cheap natural gas, advances in renewable energy technologies, and lower-than-expected demand for energy.
The company building the first new US nuclear reactors in a generation filed for bankruptcy Wednesday amid billions in losses from those troubled projects.
Westinghouse Electric said it will continue work at Georgia's Plant Vogtle and South Carolina's VC Summer power stations while it undergoes a "strategic restructuring." Westinghouse, a subsidiary of the Japanese industrial conglomerate Toshiba, said it has $800 million in financing lined up to get it through the process.
"We are focused on developing a plan of reorganization to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader," the company's interim CEO, José Emeterio Gutiérrez, said in a statement announcing its bankruptcy filing.
The move is another blow to the US nuclear industry, once on the verge of a renaissance as reliable power source without the carbon emissions of fossil fuels. But those prospects dimmed amid a boom in cheap natural gas, advances in renewable energy, and lower-than-forecast demand, leaving operators seeking help to keep the lights on in many states.
Westinghouse is one of the most famous names in American industry. It pioneered the use of alternating current electricity in the late 19th century and was a go-to brand for household appliances and electronics throughout the 20th. At the start of the 21st, its AP1000 reactor design - a pressurized-water unit designed to be simpler and safer than earlier models - was the pick for the first new American nuclear projects commissioned since the 1970s.
But each of those two-reactor projects are running billions over budget and years behind schedule, leaving Westinghouse tied up in disputes with contractors and the utilities that commissioned them. All four reactors at the Vogtle and Summer plants were supposed to be online by April; instead, the first won't start up until at least December 2019. The costs, meanwhile, have ballooned from $14 billion to $20 billion at Vogtle and from about $10 billion to $14 billion at Summer.
The resulting losses have staggered Toshiba, which reported a $6 billion write-off in February, ousted its CEO and announced it wouldn't be building any more US nukes. The Southern Alliance for Clean Energy, which has been sharply critical of the Vogtle project and the Georgia regulators who approved it, said the bankruptcy should pour cold water on any utilities' remaining nuclear ambitions.
"Not another dollar should be spent," said Sara Barczak, who leads the group's high-risk energy choices program. "A very costly door has closed on the so-called nuclear renaissance."
Toshiba said Wednesday it was working with the utilities who ordered the new to keep work going during the bankruptcy. SCANA and its partner in the Summer plant, Santee Cooper, said an agreement will buy time for "due diligence related to cost and schedule."
"It gives us critical direct access to resources and information that Westinghouse had not provided us to date, which will be important as we plan for the future of the project," Santee Cooper President Lonnie Carter said.
And Georgia Power spokesman Jacob Hawkins said his company and its partners "will continue to take every action available to us to hold Westinghouse and Toshiba accountable for their financial responsibilities."
"Georgia Power will work with the Georgia Public Service Commission and the Co-owners to determine the best path forward," Hawkins told Seeker.
Westinghouse is also building several AP1000 units in China and services reactors worldwide. The company said its international operations won't be affected by the bankruptcy filing.
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