China says Westinghouse bankruptcy won't have big impact on nuclear plans

After the March 2011 nuclear disaster in Fukushima, public sentiment turned against nuclear power in countries such as Japan and Germany.

US nuclear developer Westinghouse Electric Co. has filed for bankruptcy. Its nuclear services business Westinghouse was to build the reactors for the new plant, but the company has suffered huge cost overruns at two U.S. projects in Georgia and SC.

The bankruptcy will affect the costs paid by the taxpayers in the United States for the two nuclear projects in South Caroline and Georgia.

NuGen will continue to work alongside our technology supplier, Westinghouse, and our shareholders, Toshiba and Engie (LSE: "0LD0.L - news), in taking forward the Moorside development phase".

The construction cost overruns fall on nuclear power plants that would have contained Generation III+ AP1000 reactors, which Westinghouse designed with "passive safety features", like using gravity and convective cooling, to make them simpler, easier to maintain, and more resistant to earthquakes, plane crashes, or electrical blackouts. Toshiba said Westinghouse had racked up debt of $9.8 billion.

It represents a further blow for the Japanese conglomerate, which has warned its losses for previous year could exceed £7 billion - much more than initially anticipated.

Westinghouse, which is owned by Toshiba, is constructing and engineering two new nuclear reactors at V.C. Summer Nuclear Station in Fairfield County.

The four units, two AP1000 reactors at each facility, were the first to be licensed and under construction in the US since 1979. Westinghouse has invested almost $30 million in the 70,000-square-foot facility in the Center South Industrial Park, which provides training for nuclear operators of BWR nuclear reactors around the globe. "To resolve existing and potential litigation, [Westinghouse] considered the feasibility of acquiring S&W", the company noted. The Summer plant is about $3 billion over budget and years behind schedule, Columbia's State newspaper reported.

Once the project is complete, rates are expected to rise by 6 percent to 8 percent as customers have to cover the project's capital costs. Southern Co. and the other partners have a $920 million letter of credit from Westinghouse obtained in 2015.

"Knowing what we know today, we might not choose to build the new reactors", the Georgia PSC's Wise said. "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".

Toshiba initially alerted investors in December 2016 that it faced heavy losses linked to a deal done by Westinghouse.

So, while a Westinghouse bankruptcy might stop things from getting even worse for Toshiba, it is still not clear whether the struggling giant will manage to find its feet in time.

  • Zachary Reyes