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Nuclear: Moorside still has a future

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The headline in the Sunday Times’ business section last weekend appeared to spell doom for Moorside.

‘Toshiba mothballs Cumbrian nuclear power project,’ the newspaper reported, saying that NuGen, the Toshiba-owned company behind the scheme, had written to suppliers saying it was about to slash spending.

The article continued: “NuGen is also set to order staff who have been seconded to the project from other companies to return to their employers.”

It has been clear since late last year that Moorside was in difficulties.

Toshiba, which owns 60% of NuGen, saw its share price half after disclosing £4.8bn in liabilities at its US subsidiary Westinghouse, which was to supply the three AP1000 reactors to be built at Moorside, next to Sellafield.

Westinghouse subsequently sought protection from its creditors under US Chapter 11 bankruptcy legislation, and Toshiba announced that it wanted to sell its stake in NuGen before construction begins.

Then ENGIE, the French company that owns the other 40% of NuGen, announced it had triggered a release clause forcing Toshiba to buy its stake making the troubled Japanese company Moorside’s sole backer.

“To describe Moorside as being ‘mothballed’ is an exaggeration. As a scheme it’s very much alive.”

But Rob Johnston, Chief Executive of Cumbria Chamber of Commerce, believes Moorside still has a future, albeit one without Toshiba.

He said: “To describe Moorside as being ‘mothballed’ is an exaggeration. As a scheme it’s very much alive.

“What’s happening, and this is only prudent, is that NuGen is no longer progressing site works until there is more clarity about financial backing.

“Moorside has to go ahead because it’s crucial to our energy security. It will supply more than 7% of the UK’s electricity.

“This isn’t additional capacity. It’s capacity we need to replace older nuclear power stations that are coming to the end of their lives and coal-fired power stations that are being phased out for environmental reasons.

“If it isn’t built, the Government will have to find another way to generate this electricity, and that is likely to be equally problematic.”

Moorside will be crucial to Cumbria’s economy, employing up to 6,000 people during construction and 1,000 permanently once the reactors are operational.

Ever since the problems at Toshiba became apparent, Cumbria Chamber of Commerce has been lobbying government to invest directly in NuGen, so reversing the policy of leaving nuclear new build entirely to the private sector.

“The UK is the world’s fifth largest economy. It beggars belief that we cannot afford to invest in our own energy infrastructure.”

The South Korean power utility company Kepco is the only private-sector investor to have expressed an interest in joining NuGen but the lack of other partners, such as the UK government, may be deterring it.

Rob said: “The Government needs to review its decision to be hands off.

“Hinkley Point has shown that, because of the risks involved in building nuclear, the Government has to guarantee a high price for the electricity to secure investment, and high electricity prices make businesses uncompetitive.

“Sharing the risk and potential rewards between the public and private sectors would ensure Moorside goes ahead, reduce the cost of the electricity generated and ultimately benefit the public finances.

“The UK is the world’s fifth largest economy. It beggars belief that we cannot afford to invest in our own energy infrastructure.”

He added: “Unless the opinion polls are wildly wrong, Theresa May will still be Prime Minister after the General Election.

“We remain hopeful that her new government will be open to investing directly in nuclear new build.

“After all, in her foreword to the Industrial Strategy Green Paper, she talked about a ‘new approach to government, not just stepping back and leaving business to get on with the job but stepping up to a new active role’.

“Let’s hope she’s as good as her word.”

© Cumbria Chamber of Commerce

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