FOCUS: U.S. nuclear reactors' future in limbo amid Westinghouse turmoil

Japan Economic Newswire |

Four nuclear reactors under construction in southern U.S. states, the first such projects in the country in some 30 years, face an uncertain future with the bankruptcy of Westinghouse Electric Co. and wider concerns about a revival in the sector.

The projects undertaken by Japanese conglomerate Toshiba Corp.'s U.S. nuclear unit, which planned to add two new reactors each at Plant Vogtle in Georgia and the V.C. Summer Nuclear Generating Station in South Carolina, broke ground in 2013 but have been ensnared in setbacks, cost overruns and delays ever since.

"Whoever is paying the bill needs to see what's happening here," a worker at the South Carolina plant told Kyodo News. He claimed, on condition of anonymity, that there are "not enough qualified field engineers" on site and that poor management practices have undermined the project.

Thomas McGolidrick, who works at Plant Vogtle, said "management gets paychecks for reaching each milestone, so it ignores the planning process and building procedure" in the name of short-term goals.

Additional difficulties have arisen from the commercially untested Westinghouse AP1000 modular reactors, which workers describe as "an imperfect design that is constantly being tweaked" and "just flawed." The technology was expected to make building the new units faster and less expensive while preventing Fukushima-type meltdowns.

Following Westinghouse's Chapter 11 bankruptcy filing, the owners of both plants came to interim agreements to ensure construction would continue during an evaluation period and leadership transition.

In the case of Plant Vogtle, an agreement was struck on in which Toshiba will pay $3.68 billion in parent-company guarantees to project owner Southern Co. in installments from October of this year through .

According to the terms of the deal, the U.S. utility cannot ask for additional funds from Toshiba, while the Japanese conglomerate will receive some of the money back if costs come in lower than expected.

The project is reportedly estimated to be about $3.4 billion over budget, with a Georgia Power official on record as saying the revised opening dates in 2019 and 2020 are no longer considered feasible.



"The contractor's performance continues to fall short of both the contractor's schedule projections and the company's expectations," David McKinney, vice president of nuclear development with Georgia Power, is quoted in a trade publication as saying during a hearing. "The company does not believe these in-service dates are achievable."

Billions of dollars in federal tax subsidies currently hinge on the reactors being operational by a deadline, part of incentives and funding offered by the previous two presidential administrations to boost nuclear energy production in the United States.

The country remains the world's largest producer of nuclear energy and has supplied roughly 20 percent of its own energy through nuclear power plants every year since the late 1980s, but the future prospects of expansion in the sector are uncertain.

More than 120 U.S. reactors have been canceled before or during construction since being ordered in the 1970s. After the roughly 30-year hiatus between the last new order in 1978 and the approvals of the Vogtle and Summer expansions, the U.S. nuclear industry is struggling to make a comeback.

"We lost a generation of nuclear workers and need to teach the new generation," Jason Reddick, a worker at Plant Vogtle for the past seven years, said.

Only five new reactors entered commercial operation in the 1990s. After Tennessee's Watts Bar 1 powered up in 1996, the next reactor in the country to enter use was Watts Bar 2, completed in 2016 after spending decades on hold.

Five U.S. nuclear plants have shut down since 2011, with at least four more scheduled to close by 2025, including three that will be retired a decade or more before the expiration of their operating licenses.

The administration of U.S. President Donald Trump has not made its priorities clear regarding the 99 reactors currently operating commercially at 61 nuclear plants in the country, at a time when an increase in cheap shale oil provides growing competition.

U.S. Department of Energy spokeswoman Lindsey Geisler has been quoted in media reports affirming that the administration has an eye on the Westinghouse situation and remains "keenly interested in the bankruptcy proceedings and what they mean for taxpayers and the nation."

For Toshiba, the losses in its failed nuclear investments in the United States have caused a full-blown crisis, which the conglomerate had hoped to cover with a quick sale of its chip unit.

But the potential sale has met opposition from Western Digital Co., the U.S. partner in the chip business, which claims a sale without consent breaches their joint venture contract. Western Digital said Wednesday it is seeking an injunction in a San Francisco court to block the sale.

Toshiba could face delisting from the Tokyo Stock Exchange if it fails to recover from its state of net liabilities by .

==Kyodo

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