Westinghouse Files for Bankruptcy, in Blow to Nuclear Power

>Westinghouse’s problems are already reducing Japan’s footprint in nuclear power, an industry it has nurtured for decades in the name of energy security. Even before the filing, Toshiba had essentially retired Westinghouse from the business of building nuclear power plants. Executives said they would instead focus on maintaining existing reactors — a more stable and reliably profitable business — and developing reactor designs.

>That has made the already small club of companies that take on the giant, expensive and complex task of nuclear-reactor building even smaller. General Electric, a pioneer in the field, has scaled back its nuclear operations, expressing doubt about their economic viability. Areva, the French builder, is mired in losses and undergoing a large-scale restructuring.

>Among the winners could be China, which has ambitions to turn its growing nuclear technical abilities into a major export. That has raised security concerns in some countries.

>The shrinking field is a challenge for the future of nuclear power, and for Toshiba’s revival plans. Its executives have said they would like to sell all or part of Westinghouse to a competitor, but with a dwindling list of potential buyers — combined with Westinghouse’s history of financial calamity — that has become a difficult task.

>Toshiba still faces tough questions. The company is also divesting its profitable semiconductor business and plans to sell a stake to an outside investor to raise capital. Most of the companies seen as possible buyers are from outside Japan. Some Japanese business leaders have expressed fears that the sale will further erode Japan’s place in an industry it once dominated.
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>After writing down Westinghouse’s value, Toshiba said it expected to book a net loss of $9.9 billion for its current fiscal year, which ends on Friday.

>We have all but completely pulled out of the nuclear business overseas,” Toshiba’s president, Satoshi Tsunakawa, said at a news conference. Of the huge loss, he added, “I feel great responsibility.”

>Bankruptcy will make it harder for Westinghouse’s business partners to collect money they are owed by the nuclear-plant maker. That mostly affects the American power companies for whom it is building reactors, analysts say. Now, it is unclear whether the company will be able to complete any of its projects, which in the United States are about three years late and billions over budget.

>The power companies — Scana Energy in South Carolina and a consortium in Georgia led by Georgia Power, a unit of Southern Company — would face the possibility of new contract terms, long lawsuits and absorbing losses that Toshiba and Westinghouse could not cover, analysts say. The cost estimates are already running $1 billion to $1.3 billion higher than originally expected, according to a recent report from Morgan Stanley, and could eventually exceed $8 billion over all.

>Dennis Pidherny, a managing director at Fitch Ratings who is sector head of the United States public power group, said that it was possible that the company’s bankruptcy filing could terminate the contracts and that it could be difficult for the utilities to find another builder to take them over.

>“There’s still quite a bit of work that needs to be completed,” he said. “The biggest challenge there is quite simply finding another suitable contractor who can complete the contract and have it completed at a quote-unquote reasonable cost.”
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>That is, if they are constructed at all. Stan Wise, chairman of the Georgia Public Service Commission, said the utilities developing the Alvin W. Vogtle generating station in the state would have to evaluate whether it made sense to continue.

>“It’s a very serious issue for us and for the companies involved,” Mr. Wise said. “If, in fact, the company comes back to the commission asking for recertification, and at what cost, clearly the commission evaluates that versus natural gas or renewables.”

>In a statement on Wednesday, Toshiba said Westinghouse and affiliated companies were “working cooperatively” with the owners to arrange for construction to continue. In recent days, the affected companies issued statements saying they were monitoring the situation and exploring their options, as did the Energy Department, which has authorized $8.3 billion in federal loan guarantees for the Georgia project.

>Toshiba said Westinghouse had total debt of $9.8 billion. The Chapter 11 bankruptcy filing was made in a New York bankruptcy court.

>A decade ago, Toshiba was dreaming of a big global expansion when it bought Westinghouse for a surprisingly high $5.4 billion and made plans to install 45 new reactors worldwide by 2030.
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>At the same time, Westinghouse was trying to install a novel reactor design, the AP1000. Using simplified structures and safety equipment, it was intended to be easier and less expensive to install, operate and maintain. Its design also improves the ability to withstand earthquakes and plane crashes and is less vulnerable to a cutoff of electricity, which is what set off the triple meltdown at Fukushima.

>Nonetheless, it was inevitable that expansions at the Vogtle generating station in Georgia and the Virgil C. Summer plant in South Carolina would hit some bumps along the road to fruition, nuclear executives say. Not only was the design new, but, because nuclear construction had been dormant for so long, American companies also lacked the equipment and expertise needed to make some of the biggest components and construct the projects.

>Indeed, that may ultimately have been at the root of the troubles. The contractor Westinghouse chose to complete the projects struggled to meet the strict demands of nuclear construction and was undergoing its own internal difficulties after a merger. As part of an effort to get the delays and escalating costs under control, Westinghouse acquired part of the construction company, which set off a series of still-unresolved disputes over who should absorb the cost overruns and how Westinghouse accounted for and reported values in the transaction.

>>126578
Sure looks like a bad deal for everyone. The company dies, the remaining engineers are dispersed, the knowledge forgotten. This is how we slide backwards to dark ages.

>>126585
Sure. It's not like we dont continue to research nuclear power. It's just that our experience shows us that it obviously isn't that great right now.

>>126585
>>126594

Why do you people not read the entire article before posting? Or do you just lack reading comprehension altogether?

They have to find a solution for old reactors and waste. Dismantling is hard and dangerous and there's a lot of research to do about transmuting or storing active long period radioelements.
Buildings can last centuries and even millennias but it seems difficult to be sure for more. Some radioactive elements needs to be contained for hundred of millennias even millions years, it's rather out of reach of what have already been done.