Meltdown of Toshiba’s Nuclear Business Dooms New Construction in the U.S.
Toshiba’s dramatic exit from the business of building nuclear power plants lands another blow to a beleaguered sector, undermining new development and research on advanced reactor designs.
After acquiring a majority stake in Pittsburgh-based Westinghouse Electric in 2006 for $5.4 billion, the Tokyo technology conglomerate had high hopes for rolling out a new generation of safer, smaller, cheaper power plants, as well as a series of streamlined full-scale reactors. Four of the latter are under construction in the United States, representing the only new reactors currently being built in the country. But the company was bedeviled by cost overruns, technical problems, conflicts with contractors, and regulatory challenges that set those projects back by years.
On Tuesday, Toshiba projected a $6.3 billion write-down for its nuclear unit and said it was looking to unload its stake. “It looked like a big deal at the time, but it’s turned into a mess,” says Michael Golay, a professor of nuclear science and engineering at MIT. “And it’s likely to have a very chilling effect.”
Toshiba’s four massive nuclear plants now under construction in the southern United States are AP1000 pressurized-water reactors, which use a simplified design that was supposed to accelerate construction. But the Vogtle project in Georgia and the V.C. Summer project in South Carolina are both around three years behind schedule and, together, billions of dollars over budget.
The company said those projects will continue, but many energy experts believe Toshiba’s decision to cease building new reactors spells the end of any nuclear construction in the United States for the foreseeable future. Analysts doubt Toshiba will find a buyer for its Westinghouse stake, or any willing construction partners to move ahead with dozens of additional plants it had once planned.
Toshiba’s struggles reflect the slow demise of nuclear power in much of the world (see “Giant Holes in the Ground”). The industry has been plagued by the rising cost of construction, the low price of natural gas, the Fukushima disaster in 2011, and the stricter regulations and souring public perceptions that followed. Germany is scaling down its nuclear program, engineering powerhouses like GE and Siemens have pulled back from the market, and France recently engineered the takeover of the nuclear giant Areva to rescue it after a series of stumbles.
Many fear the slowdown will prevent nations from building enough capacity to avoid the growing risks of climate change. The International Energy Agency estimates that nuclear energy capacity needs to double by 2050 to keep worldwide temperatures from rising more than 2 °C. Absent a carbon-capture breakthrough or a miracle battery, there’s no realistic plan for cutting greenhouse-gas emissions fast enough without far more use of nuclear, says Steven Chu, the former secretary of energy and a professor of physics at Stanford.