Tech

Toshiba to wind up UK nuclear power venture

Toshiba has confirmed plans to wind up its UK nuclear venture behind the development of the planned Moorside power station in Cumbria.

The struggling Japanese engineering firm revealed its NuGen vehicle was to be shut down early next year as part of renewed efforts to shore up its finances following its disastrous acquisition of US nuclear energy firm Westinghouse.

Westinghouse was placed in bankruptcy protection last year amid billions of dollars worth of losses, forcing Toshiba to raise funds by selling off its prized chip-making business.

The troubles at Westinghouse, which was due to provide three reactors for the £15bn Moorside project, prompted a French investor to pull out of NuGen.

Image: Toshiba is planning to shrink is vast array of international interests

That left Toshiba having to buy up its stake and assume all the risk.

:: Toshiba warns its survival is at risk

The Japanese firm had been trying to sell NuGen, with the UK government also seeking new investors, but Toshiba admitted defeat on Thursday.

"After considering the additional costs entailed in continuing to operate NuGen, Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project, and has resolved to take steps to wind-up NuGen," it said.

It added that it expected to begin the winding up by process by 31 January and to record a loss of just over £100m.

It was unclear how many jobs were at risk but NuGen said it had retained a team to support the process.

The company said: "Whilst NuGen will not be taking the project forward, the Moorside site in Cumbria remains a site designated by government for nuclear new build, and it is now for the Nuclear Decommissioning Authority as the owner of the site and the government to determine its future."

The decision was hardly a surprise given Toshiba's long-standing financial woes but it still represents a major blow to the government's efforts for mixed low carbon energy provision.

A Department for Business, Energy and Industrial Strategy spokesperson said: "We understand that Toshiba have faced a difficult decision in ending their involvement in new nuclear projects outside of Japan in light of their well-known financial challenges.

"All proposed new nuclear projects in the UK are led by private sector developers and while the government has engaged regularly with the companies involved, this is entirely a commercial decision for Toshiba.

"Nuclear has an important role to play as part of the UK's diverse energy mix as we transition to a low carbon economy, but in each case projects must provide value for money for consumers and taxpayers.

"This Government remains committed to new nuclear through the Industrial Strategy Nuclear Sector Deal as well as consenting the first new nuclear power station in a generation at Hinkley Point C."

GMB union national officer, Justin Bowden, responded: "The British government has blood on its hands as the final sad but predictable nail is banged into the coffin of Toshiba's jinxed jaunt into nuclear power.

"Relying in this way on foreign companies for our country's essential energy needs was always irresponsible.

"Add to that the multiple opportunities to step in and take control, that were missed or ignored."

Toshiba's announcement formed part of a profit warning to the market that saw previous forecasts for operating profits in the 2018/19 financial year slashed by 14%.

More from Business

It said that in addition to NuGen being shut down it would also exit a liquefied natural gas business in the US.

Japanese media reported that up to 7,000 jobs could be lost over the next five years as Toshiba prepared to publish a new business plan.

Original Article

Related Posts