Chairman of Toshiba and President of Westinghouse to Quit
TOKYO (Kyodo) — Toshiba Corp. will take no new orders related to the construction of nuclear power stations, with the company’s chairman expected to resign over the massive write-down that has doomed the company’s U.S. nuclear business.
The Financial Times, London, reported that “Toshiba’s nuclear climbdown deals a blow to Japan’s broader ambitions of bidding for nuclear construction projects around the world — a key aim of Prime Minister Shinzo Abe’s “Abenomics” economic revival program and a driving force behind his unprecedented global diplomatic push.”
The newspaper points out that the exit from new nuclear builds is another exmaple of its shrinking global foot print and adds pain to a company recovering from a 2015 accounting scandal in which it padded reported profits by about $1.3bn over seven years. Also, the company was forced to make huge cuts to headcount — a measure analysts say is likely to have hurt the company’s competitiveness.
Delays and cost overruns on Westinghouse nuclear construction projects in the US will now be expressed as writedowns that analysts estimate could be as high as $7bn.
The company’s decision to cease taking orders effectively marks its withdrawal from the nuclear energy business. It also apparently ends the so-called nuclear renaissance in the U.S. for full size reactors.
During 2007-2010 there were more than two dozen applications expected for new reactors, but now only a few licenses that have been completed and they do not have any links to near term plans to build the units. Key examples are Duke’s William States Lee III plant in South Carolina (2 AP1000s) and DTE’s Fermi III plant in Michigan (1 ESBWR).
TVA cancelled its plans for two new AP1000s at Bellefonte and sold off the two partially completed reactors there for their scrap value and possible redevelopment of the site as an industrial park. Plans by a real estate developer to complete one of the reactors have been greeted with skepticism by this blog and by industry analysts such as Bloomberg.
Development of small modular reactors and advanced fast reactors of various designs may not complete their paths to licensing and construction for another five-to-ten years at least.
After Toshiba ceases taking new orders, it will focus on maintenance and decommissioning operations. The company will continue work on four nuclear plants under construction in the United States that are expected to be completed by 2020. Two are in Georgia and two more are in South Carolina.
It is expected that Toshiba may license its AP1000 technology to other firms as it has done in China. Chinese state owned nuclear firms have plans to build two 1400 MW versions at Fangchenggang and use them as reference units for export of the design to countries such as Turkey.
Toshiba said it will review nuclear operations and spin off its chip business to raise funds by selling a stake in the new chip company, covering the expected write-down in the nuclear business which could reach 700 billion yen ($6.08 billion).
Westinghouse Chairman Danny Roderick is also set to step down, the sources said, but Toshiba President Satoshi Tsunakawa is likely to stay on.
Shiga, Roderick and Tsunakawa took their current posts last June as Toshiba reshuffled its management following an accounting scandal that surfaced in 2015. The firm improperly reported billions in profits that it did not earn.
The Japanese industrial conglomerate may announce company chairman Shigenori Shiga’s resignation as soon as 02/14/17, when it reports its April-December financial results.
Shiga once served as president of the U.S. nuclear unit, Westinghouse Electric Co., which Toshiba has said could face a multibillion-dollar loss due to cost overruns from delays in US plant projects.
Shiga was the vice president in charge of the power systems business when Westinghouse acquired CB&I Stone & Webster in late 2015. CB&I Stone & Webster is the U.S. nuclear plant construction firm at the heart of Toshiba’s massive write-down problem.
Uncertainty For Nuclear Industry As UK Confirms Plans To Leave Euratom
(NucNet) The UK will seek to leave the European Atomic Energy Community (Euratom) the agency responsible for nuclear safety and security. Some EU lawyers had warned that leaving the EU would automatically trigger a Euratom exit too.
However, an article in the US-based National Law Review in July 2017 said Euratom has a separate legal personality from the EU and is governed by a separate treaty and separate exit mechanism, making it possible that the UK could leave the EU without simultaneously withdrawing from Euratom.
The Financial Times reported that the decision has “wide ranging implications” for the UK’s nuclear industry, research, access to fissile materials and the status of approximately 20 nuclear cooperation agreements that it has with other countries.
Dr Paul Dorfman of the Energy Institute at University College London, said: “I know for a fact that the nuclear industry really doesn’t like it. It’s bad news for the industry, bad news for opponents and critics of the industry as well. It’s a lose-lose situation, whereby the industry becomes less competitive and less safe.”
“You’re talking about key safeguards and assurances that might have serious implications for UK new-build installations, the nuclear fuel cycle and the UK’s enormous waste and decommissioning liabilities.”
UK Government Warns Of ‘Acute And Urgent’ Skills Shortages in Nuclear
(NucNet) There are acute and urgent skills shortages in key industrial sectors in the UK including the nuclear industry and a better system needs to be identified and fix emerging gaps according to a government report published on 23 January 2017. It says even if shortfalls in science, technology, engineering and maths (Stem) skills and technical education are addressed, shortages in the nuclear industry might remain.
The government plans to set an “open door” challenge to industry to come to the government with proposals to transform and upgrade their sector through “sector deals.”
The paper says Lord Hutton, a former defense secretary who is co-chair of the Nuclear Industry Council and chairman of the London-based Nuclear Industry Association (NIA), will oversee work to improve UK competitiveness and skills in nuclear. The NIA said in a statement that with plans in place for a new nuclear power program, there is considerable opportunity for the supply chain across the UK.
The UK is also at the forefront of the development of the next generation of nuclear – small modular reactors (SMRs). The statement said: “The NIA believes development of SMR technology could be an important part of ensuring the UK’s nuclear industry realizes its full economic and industrial potential.” The report is online: http://bit.ly/2iVhRKG
US House Action Signals Investment in America’s Nuclear Future. New Congress Acts to Secure US Global Nuclear Leadership
(WNN) The US House of Representatives has approved bipartisan bills from the last session of Congress that aim to bolster research on advanced nuclear reactors. The Advanced Nuclear Technology Act of 2017 was passed by voice vote on 23 January.
The document, H.R. 590, is titled ‘To foster civilian research and development of advanced nuclear energy technologies and enhance the licensing and commercial deployment of such technologies’.
Following is a statement from Maria Korsnick, president and chief executive officer at the Nuclear Energy Institute.
“With its passage of the Advanced Nuclear Technology Development Act of 2017 last night, the House of Representatives significantly advanced a major component of America’s future energy and technology infrastructure—our nation’s innovation-leading advanced reactors. NEI on behalf of the nuclear industry thanks Congressman Bob Latta of Ohio and Congressman Jerry McNerney of California for their strong bipartisan leadership on this issue.
“This legislation is critical in developing the licensing framework that will allow the United States to develop the next generation of nuclear reactors.
“Congress and the new administration should work together to increase funding for developing this critical, innovative and jobs-creating technology.”
Simpson Retains Energy and Water Appropriations Gavel
Idaho Congressman Mike Simpson has been re-appointed as Chairman of the House Appropriations Subcommittee on Energy and Water Development. The Subcommittee funds all functions of the U.S. Department of Energy, including the Idaho National Laboratory’s research and cleanup operations. Congressman Simpson has held this position since November 2013.
The Subcommittee’s primary jurisdiction includes the following federal agencies:
- Department of Energy, including Idaho National Laboratory and Bonneville Power Administration, as well as the National Nuclear Security Administration
- U.S. Army Corps of Engineers
- Bureau of Reclamation
- Nuclear Regulatory Commission
- Defense Nuclear Facilities Safety Board
- Nuclear Waste Technical Review Board
“Whether it’s the cleanup of sites like INL, the maintenance of our nation’s nuclear weapons, or the many vital water projects across the Western United States, the Energy and Water Subcommittee’s work touches almost every community in Idaho and across the country,” Simpson said.
US NRC’S Svinicki appointed chairman effective immediately
(Platts) US Nuclear Regulatory Commission Commissioner Kristine Svinicki has been appointed by President Donald Trump to be chairman of the US Nuclear Regulatory Commission, replacing the current chairman, Stephen Burns, an agency spokesman said Thursday.
The appointment is effectively immediately, David Castelveter, director of NRC’s Office of Public Affairs, said. He did not provide further details.
Czech Government Sets Up Working Groups To Advance New Nuclear
(NucNet) The Czech government has approved the creation of three working groups which will seek to advance preparations for the construction of new nuclear reactors in the country, the Ministry of Industry and Trade said.
It recommended that power utility CEZ creates a subsidiary company to prepare construction plans and explore options for financing the new reactors, even though the first might not be approved until 2025. A decision on power pricing from the new plant is expected this year.
Three groups will look at three key aspects of new build: financial strategy, legal and legislative, and technical-investment. The Czech Republic’s state energy policy, approved by the government in 2015, anticipates one new unit at the existing Dukovany nuclear site and possibly three more at Dukovany and the country’s other nuclear site, Temelin.
The Czech Republic has six commercially operational reactor units: four VVER-440 units at the Dukovany site and two VVER-1000 units at Temelín.
Nuclear Share To Grow Globally, But With Decline In Europe, Says BP Report
(NucNet): Nuclear power generation is expected to grow by 2.3% year over the next 20 years with its share of primary energy consumption set to increase from 4% to 5% by 2035, according to the 2017 edition of the BP Energy Outlook. Nuclear capacity in Europe will decline as ageing plants are gradually decommissioned and there is little new investment, the report says.
EU nuclear power generation by 2035 will be 30% lower than in 2015. Japan will restart some of its reactors over the next 10 years, but will not recover to pre-Fukushima levels. China’s rapid nuclear expansion program (11% a year) will account for nearly 75% of the global increase in nuclear generation. This is roughly equivalent to China introducing a new reactor every three months for the next 20 years. BP Energy Outlook is online: http://on.bp.com/2j57kN8