Wednesday, March 29, 2017

Westinghouse Electric in Bankruptcy

Westinghouse Electric, the subsidiary of Toshiba, is in bankruptcy this morning after board approval of the move yesterday. Background from Greenpeace:

It is important to note that this is a reflection of the fundamentals of the nuclear power industry rather than any mismanagement or miscalculation on the company’s part. The costs of nuclear-generated electricity have always been higher than competing sources and nuclear projects were able to go forward only with large government subsidies, funding that came in a wide range of forms to obscure its magnitude in total. Prices and shortages of uranium are serious issues, but the nuclear sector’s decline is more directly a result of public budget pressures eroding the nuclear subsidies.

As of today, nuclear power is a legacy technology. No one will rescue Westinghouse Electric in bankruptcy. It is, by some measures, half of the global nuclear sector. It has not been profitable across its history and the bankruptcy filing estimates a $9 billion dollar loss for the year. Few pockets are deep enough to take on a project on that scale, even if it were not in a declining technology. Competitors will not be eager to bid on more than a few of the facilities. Many of the construction projects will be suspended for years, then abandoned. Nuclear reactors will have to keep operating until the current fuel is exhausted, but some will surely be retired when that point is reached because of the high operating costs.