Toshiba has confirmed it is withdrawing from plans to build a nuclear power station in Cumbria.
Its Board of Directors made the decision to wind up its nuclear arm, NuGeneration, which planned to construct the Moorside project.
The company said it will start doing so by 31st January 2019.
It added in a statement: “Under Toshiba’s policy to eliminate risks related to the overseas nuclear power construction business, Toshiba has invited new investors to participate in NuGen and also considered the sale of Toshiba Group’s shareholding in NuGen. However, notwithstanding negotiations with multiple companies, Toshiba is unable to anticipate to complete the sale of NuGen during FY2018, to March 31, 2019.
“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,”
NuGen said the announcement comes after 18 months of negotiations with a range of potential new owners, however, it was not possible to successfully conclude those negotiations.
It added: “While NuGen will not be taking the project forward, the Moorside site in Cumbria remains a site designated by government for nuclear new build and it is now for the Nuclear Decommissioning Authority (NDA) as the owner of the site and the government to determine its future.”
The government said it understands Toshiba has faced a “difficult decision” in ending their involvement in new nuclear projects outside of Japan in light of their well-known financial challenges.
A BEIS spokesperson added: “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.
“Nuclear has an important role to play as part of the UK’s diverse energy mix as we transition to a low carbon economy but in each case projects must provide value for money for consumers and taxpayers. This government remains committed to new nuclear through the Industrial Strategy Nuclear Sector Deal as well as consenting the first new nuclear power station in a generation at Hinkley Point C.”
Prospect union insists the government “must step in” and take a share.
Senior Deputy General Secretary Sue Ferns said: “The long term future of the nuclear industry and wider supply chain in the North West could be on the line if we can’t move forward with building Moorside.
“Our analysis shows that if the government were to take a 50% stake, then there would be a net benefit to the public purse so there really is no excuse not to. We have a huge skills base in this country which is at risk if we don’t get some certainty. For the sake of jobs, skills, growth and security of supply, it is vital that the government commits to nuclear new build now.”
The Nuclear Industry Association (NIA) added it is “sad news” for all those involved in the project and for the nuclear sector and believes the NDA and government should work together to facilitate the build of new nuclear on the site “for the sake of the energy security of the UK and for the local economy in Cumbria”.
Chief Executive Tom Greatrex said: “With all but one of the UK’s nuclear power plant due to come offline before 2030, there’s an urgent need for new nuclear to be built quickly and the Moorside site has a key role to play in this.”
The Energy and Climate Intelligence Unit (ECIU), however, adds the demise of plans for the Moorside nuclear project “should be seen as an opportunity rather than a risk”.
Head of Analysis Dr Jonathan Marshall said: “Shifting away from expensive, complicated technology towards cheaper and easier to build renewables gives the UK the opportunity to build an electricity system that will keep bills for homes and businesses down for years to come.
“UK offshore wind is already significantly cheaper than nuclear, with onshore and solar power offering even greater savings. The technology needed to shore up supply from variable sources is also getting more competitive, with storage one of the brightest lights. Cancelling Moorside does leave a gap in the UK’s decarbonisation plans but one that is more likely to be filled with the technologies of the future rather than the past.”