Nuclear reactor supplier is feared bankrupt

THE firm supplying three reactors for a plant in Cumbria looks set to file for bankruptcy in the US – throwing Britain’s energy policy into doubt.

US nuclear firm Westinghouse Electric is considering the move as its owner Toshiba struggles with huge financial problems.

Westinghouse is designing three reactors for a planned nuclear power plant in Moorside, Cumbria, 60pc owned by Toshiba.

The £10bn NuGen plant will eventually power up to six million homes as a key part of the Government’s energy strategy.

The project had already been thrown into turmoil when Toshiba announced a £5bn writedown connected to its nuclear business in December. That crisis appears to be deepening with the potential bankruptcy of Westinghouse.

Sources said Westinghouse Electric Co had brought in the legal firm Weil, Gotshal & Manges as an exploratory step, and had not yet taken a decision on a bankruptcy filing.

Unions have called for the Government to get a grip on the country’s nuclear strategy and invest in the plant.

Justin Bowden, nuclear energy secretary for the GMB union, said: ‘It looks like the crisis that everybody feared was taking place is now taking place.

‘The only positive that can be taken from it is that they are now dealing with it rather than pretending to the outside world it isn’t happening. We are still in the position of wondering how it is that the country’s energy supply is left to the vagaries of foreign countries thousands of miles away. The average person must be scratching their head.’

The AP1000 nuclear reactors Westinghouse is designing for the project are being tested by the Office for Nuclear Regulation and the Environment Agency.

The process is expected to finish this month. But it is feared that if different reactors are needed because of problems at Westinghouse it could set the project back significantly.

Toshiba said yesterday it remained committed to the NuGen project until the final investment decision, but would then seek to sell its shares.

It says it will ‘consider participating in the project without taking on any risk from carrying out actual construction work’.

A spokesman added it was not aware of any intention for Westinghouse to file for Chapter 11 bankruptcy. Last month it confirmed that selling Westinghouse was an option.

The Japanese conglomerate faces huge pressure to publish its audited earnings by Tuesday after it postponed them a month ago to probe potential problems at Westinghouse further.

If it fails to meet that deadline it has until March 27 to file or face a delisting. NuGen declined to comment on Westinghouse.

Kepco, the South Korean power utility part-owned by the nation’s government, has been in talks with Toshiba to buy a stake in NuGen, a joint venture between Toshiba and Engie of France. Some hope Kepco might keep the plan on track.

The Government has resisted putting public money into nuclear reactors. But in December the Japanese and British governments signed a memorandum of co-operation to increase collaboration in nuclear power. Japanese group Hitachi is planning a power station in Wylfa, north Wales.

A spokesman for the Department for Business, Energy and Industrial Strategy said: ‘The Government is committed to new nuclear as an important part of our energy mix, having commissioned Hinkley Point C, the first new nuclear power station in a generation.

‘We engage regularly with the developers of proposed projects in the UK.’

Westinghouse declined to comment, but said normal operations were continuing at UK facilities.