Toshiba's UK withdrawal puts Cumbria nuclear plant in doubt

08 November 2018

Toshiba plans to wind up its UK nuclear business after failing to find a buyer, dealing a potentially fatal blow to plans for a new nuclear power station in Cumbria. The Japanese engineering giant said it would take a 18.8bn Japanese yen (£125m) hit from closing its NuGen subsidiary, which was to have built a nuclear power station at Moorside near Sellafield in Cumbria.

Artist's impression of completed Moorside plant - Image: NuGen

"After considering the additional costs entailed in continuing to operate NuGen, Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project, and has resolved to take steps to wind-up NuGen," Toshiba said in a statement. The group has already spent more than £400m on the project.

Toshiba had been trying to find a buyer for the subsidiary but had not found any takers. Korea Electric Power Corporation (Kepco) had been a preferred bidder to take over the project, but those talks fell through after more than a year of negotiations. The group said it would start the wind-up process in January.

NuGen was initially co-owned by Toshiba and the French firm Engie. Toshiba was subsequently forced to buy the remaining 40% of NuGen it did not already own via a bankruptcy condition related to Engie.

The Department for Business, Energy and Industrial Strategy said: “We understand that Toshiba have faced a difficult decision in ending their involvement in new nuclear projects outside of Japan in light of their well-known financial challenges.

"All proposed new nuclear projects in the UK are led by private sector developers and while the government has engaged regularly with the companies involved, this is entirely a commercial decision for Toshiba."

The decision will cast a shadow over the country’s plans to introduce a new generation of large capacity nuclear plants to take over from the current fleet, which will come to the end of their lives in the next decade. The decision leaves a huge hole in the country’s energy policy: the plant would have provided about 7% of UK electricity.

So far work has started on only one new plant, Hinkley Point C in Somerset, which is being built by the French-owned group EDF Energy and is expected to be operational between 2025 and 2027.

Otherwise, Hitachi of Japan is behind plans to develop a two or three-reactor plant at Wylfa in Wales and Chinese companies have also put forward plans for another at Bradwell in Essex.