Crisis for Britain’s £10bn nuclear plant

Reactor maker for giant power station goes bust

THE £10bn plan to build the UK’s biggest nuclear power project is in turmoil after a reactor supplier filed for bankruptcy.

The NuGen power plant in Moorside, Cumbria, is due to power 6m homes as a vital part of the national energy strategy.

But yesterday its Japanese owner Toshiba admitted the supply of reactors was ‘uncertain’ after its US nuclear division, Westinghouse, filed for Chapter 11 bankruptcy.

The UK Government is now under growing pressure to step in over the plant, as Toshiba is now facing billions of losses in its own country.

The AP1000 reactors for NuGen are being designed by a Westinghouse subsidiary in the UK which has not filed for bankruptcy, and bosses insisted its role in the power plant was unaffected.

However, US bankruptcy court filings suggest the UK division is exposed to Toshiba’s and Westinghouse US’s financial problems.

When Toshiba failed to file accounts on time in February, it put Westinghouse’s US and UK operations in default on a £400m loan. Banks waived their right to demand repayment from the UK holding company after Toshiba backed the loan with cash.

Westinghouse’s European and US divisions also ‘depend heavily on one another for business support’, the filings say.

Westinghouse has a £643m loan to help protect its core business during the bankruptcy process, but it is not clear exactly how this will be used.

GMB union organiser Chris Jukes said: ‘It is vital this project is given the certainty it needs and we are calling on an urgent Government announcement to give clear and unambiguous clarity for the short, medium and long-term future of Moorside.’

Westinghouse’s problems stem from billions of dollars of cost overruns at four nuclear reactors being built in the US.

In February, Toshiba announced a £5bn write- down connected to the nuclear business, and said it was on track for losses of £2.7bn for the year to March.

It hopes the bankruptcy will protect it from further damage from Westinghouse. Yesterday, it reiterated it was committed to the NuGen project. ‘The Chapter 11 filings have made planned supply of the AP1000 (nuclear power plant) for the UK project uncertain, and we have therefore recorded an impairment loss covering the cost of the NuGen project,’ a spokesman said.

Toshiba owns 60pc of the project with the rest owned by French partner Engie.

Yesterday NuGen said it would continue working to gain the appropriate permits and licences required to construct Europe’s largest nuclear new build project.

A Westinghouse spokesman said: ‘There will be no impact to our role in the NuGen project.’

A spokesman for the Department for Business, Energy and Industrial Strategy said: ‘The UK Government is committed to new nuclear as an important part of our energy mix.’