Westinghouse’s Bankruptcy Could Be the End of Nuclear Hopes in US

  • Date: 03/04/17
  • Diane Cardwell and Jonathan Soble, The New York Times

The filing comes as the company’s corporate parent, Toshiba of Japan, scrambles to stanch huge losses stemming from Westinghouse’s troubled nuclear construction projects in the American South. Now, the future of those projects, which once seemed to be on the leading edge of a renaissance for nuclear energy, is in doubt.

“This is a fairly big and consequential deal,” said Richard Nephew, a senior research scholar at the Center on Global Energy Policy at Columbia University. “You’ve had some power companies and big utilities run into financial trouble, but this kind of thing hasn’t happened.”

Westinghouse, a once-proud name that in years past symbolized America’s supremacy in nuclear power, now illustrates its problems.

Many of the company’s injuries are self-inflicted, such as a disastrous deal for a construction business that was intended to control costs and instead precipitated the events that led to the filing on Wednesday. Over all, Toshiba has been widely criticized for overpaying for Westinghouse.

But some of what went wrong was beyond either company’s control. Slowing demand for electricity and tumbling prices for natural gas have eroded the economic rationale for nuclear power, which is extremely costly and technically challenging to develop. Alternative-energy sources like wind and solar power are rapidly maturing and coming down in price. The 2011 earthquake in Japan that led to the nuclear disaster at the Fukushima Daiichi plant renewed worries about safety.

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.

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