Westinghouse Electric Co. LLC, the US nuclear power plant developer owned by Japanese electronics giant, Toshiba Corporation, consulted bankruptcy attorneys last week. While this action may not seem headline-worthy to some, it is certain to have widespread implications for the nuclear power industry—and it may even be indicative of future circumstances.
Toshiba Corporation has suffered significant losses recently—upwards of $6.32 billion for the April-December period, according to the Japan Times. Therefore, the company is considering filing Chapter 11 bankruptcy for Westinghouse Electric Co. as a means of minimizing its overall losses.
According to a variety of sources, nuclear power is struggling for a number of reasons. Lower natural gas prices and the rise of alternative energy sources like wind and solar power have reduced demand for nuclear energy. But the safety-cost paradox is perhaps a more influential issue. It seems, the conflicting challenge of a) building plants that are in-line with high US safety standards and b) meeting the budgetary requirements that make nuclear power economically viable has disrupted a majority of the nuclear energy projects proposed in the US within the last decade.
“You can make it go fast, and you can make it be cheap—but not if you adhere to the standard of care that we do,” Mark Cooper of the Institute for Energy and the Environment at Vermont Law School told the New York Times. “Nuclear safety always undermines nuclear economics. Inherently, it’s a technology whose time never comes.”
In recent years, nuclear power development companies have focused on developing new reactor designs with heightened safety, especially in the wake of Fukushima. During the 2011 disaster, an earthquake and tsunami knocked out grid and backup power, disabling the plant’s cooling systems, and leading to the meltdown of three reactors.
Westinghouse’s new generation of reactor, the AP1000, has a safety-enhanced design. It uses natural forces like gravity to transfer coolant, rather than relying on mechanical pumps powered by electricity. It was also designed to better withstand earthquakes and plane crashes. But the enhanced design and heavy-duty construction involves significant cost increases. Production and transport of the reactor’s massive components has proven a challenge as well.
The impact of this struggle to balance safety and cost are visible across the nuclear generation industry. Of the dozens of new reactors once up for licensing with the Nuclear Regulatory Commission, the New York Times reports that only four are currently under construction. Two are at the Alvin W. Vogtle generating station in Georgia, and two at the Virgil C. Summer plant in South Carolina. The projects, more than three years late and billions over budget, are thought to have contributed to Westinghouse and Toshiba Corporation’s financial problems.
Toshiba Corporation has indicated that one way or another, Westinghouse will complete the reactors for in-progress projects. But the fate of other developments that plan to use the Westinghouse AP1000 reactor is unclear, as is the role of the United States in the future of nuclear energy.
Are Westinghouse Electric and the nuclear power industry on parallel paths?