No, not the physical kind, like what happened at Chernobyl or Fukushima. The financial kind. Westinghouse, builder of the Vogtle nuclear plants in the USA, has gone bankrupt, due to the massive cost overruns in the reactors' construction. The failure of Westinghouse might also take down its parent company, Toshiba.
The nuclear power crisis escalated dramatically on March 29 with the announcement that US nuclear giant Westinghouse, a subsidiary of Japanese conglomerate Toshiba, had filed for Chapter 11 bankruptcy protection. The filing marks the start of lengthy and complex negotiations with creditors and customers and the US and Japanese governments.
The companies are in crisis because of massive cost overruns building four AP1000 nuclear power reactors in the southern US states of Georgia and South Carolina. The combined cost overruns for the four reactors amount to about US$11.2bn and counting. Stephen Byrd from Morgan Stanley said that the cost of the plants, if completed, will be about twice Westinghouse’s original estimate.
Beyond the direct impact of the unfolding crisis on numerous reactor projects around the world, the most important impact of the crisis is the chilling effect it will have ‒ and is already having ‒ on the nuclear power industry.
The AP1000 fiasco in the US shows that industry giants can be brought to their knees by cost overruns on just a few reactors. Further confirmation comes from two French EPR reactors under construction in France and Finland: combined cost overruns amount to at least US$13.5bn and counting, and French utilities EDF and Areva would both be bankrupt if not for repeated multi-billion-dollar government bailouts.
Governments, energy utilities and companies, banks, and investors will be considerably less likely to gamble on nuclear power in light of recent events. Not many energy utilities and companies are as large, and as capable of absorbing debt, as Toshiba and Westinghouse. And few are as experienced: Toshiba has built 20 reactors in Japan (some in joint ventures), and Westinghouse has built 91 reactors globally. Yet cost overruns on four conventional reactors have brought these industry giants to their knees.
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It's increasingly clear that nuclear power is not going to solve the global warming crisis. They take too long to build and they are too expensive. We don't have time to wait while nuclear is rolled out, the world is warming too fast. We can rapidly and much more cheaply build out renewables to reduce CO2 emissions. Even in backward Australia, we are likely to have 15% plus from renewables nationally by 2019, and nearly two-thirds from renewables in South Australia by that time. Yes we will need more interconnectors to link the South Australian and NSW and the NSW and Queensland markets and yes we will need some storage (it seems certain that by 2020 there will be a 110 MW CSP plant with molten salt storage in South Australia). But it's all doable, and much more cheaply than nuclear.