What Does Westinghouse Bankruptcy Mean To Nuclear Energy Innovators?
Attendees at the 7th Annual International SMR and Advanced Reactor Summit in Atlanta, GA this week are intensely curious about the effect of Westinghouse’s decision to enter into a Chapter 11 bankruptcy reorganization effort. They are also working hard to learn whatever lessons might be available to help them avoid similar situations.
What About That Westinghouse News?
Westinghouse has been a major nuclear energy company since the earliest days of the technology development. When Toshiba purchased the company a decade ago for $5.4 billion, it was seen as an indicator that the company believed in the future of nuclear energy in the United States.
Like almost everyone with a nuclear energy industry connection, many believe that the Chapter 11 filing is a big deal. Some feel certain that it will have an impact on their future. The problem is that no one has any real comprehension about what the effect will be. Sighs, laments and shoulder shrugs are common responses when the subject is introduced into a hallway conversation.
One of the attendees at the meeting left Westinghouse employment several months ago. When asked for a reaction about the decision to change jobs, the former employee stated that cartwheels might be in order if in different attire and if young enough to still be capable of cartwheels. Interpret that response as an expression of relief about not being personally involved in the angst that must be widespread within the company.
There do not appear to be any current Westinghouse employees at the event; Westinghouse made a decision a couple of years ago to put its SMR project on the shelf in order to concentrate its management focus on the more immediate opportunities to either build, maintain or take apart – decommission – large pressurized water reactors.
One attendee, Marvin Yoder, reintroduced himself and asked if I’d like a copy of his short book about his participation in an project attempting to introduce nuclear energy to the Alaskan “bush.” That started a reminiscence about Toshiba’s aborted effort to introduce a factory manufactured, 10 MWe nuclear power plant that could operate for 20-30 years without new fuel.
Like the larger light water SMR, the 4S project to supply manufactured reactors appropriate for small grids and remote areas was shelved because the company saw more immediate, and larger scale business opportunities in deploying its AP1000 MWe generation 3+ nuclear plant.
Four units under construction in the U.S. southeast have run into such lengthy and costly delays that Toshiba has recognized that the obligations of fulfilling the construction contracts represent a financial loss of roughly $6 billion. The bankruptcy filing is designed to cap that liability and protect the parent company.
A number of deeply experienced industry leaders at the summit have expressed some frustration and confusion about how the four projects could have gotten so far behind their projected schedules.
Several expressed the opinion that Toshiba and perhaps even Japan has an obligation to do whatever it takes to complete the projects. Those sentiments echoed a paragraph found in yesterday’s issue of the Atlanta Journal Constitution.
Southern Co. CEO Tom Fanning, who flew to Tokyo ahead of Westinghouse’s bankruptcy filing, told the Wall Street Journa;l that thousands of Georgia jobs could be endangered if Toshiba doesn’t commit to paying billions in cost overruns.
“The commitments are not just financial and operational, but there are moral commitments as well,” Fanning told the Journal in an interview from Tokyo.
Shared Responsibility Among Several Entities
The situation cries for a higher level of understanding, blame sharing and cooperation. Without a serious effort to better recognize how the situation developed, it is fraught with the risk of every party to the project losing a great deal of money. It also presents the prospect of having four large, incomplete, and unproductive works of industrial art.
