Toshiba to unveil giant payout Feb 14; US sends nuclear trade negociators to Mexico

Nuclear power news you need to know.

Toshiba mulls asset actions ahead of multi-billion dollar payout

Toshiba Corp. is to reveal February 14 the size of a goodwill payment it must pay following Westinghouse's acquisition of nuclear construction and integrated services company CB&I Stone & Webster (S&W), contractor on Westinghouse's four US AP1000 construction projects, the company said January 24.

Westinghouse is a 100% subsidiary of Toshiba and delays to the U.S. AP1000 projects have hiked impairment estimates linked to the acquisition of S&W.

Toshiba said December 27 the goodwill payment could amount to "several billion US dollars," prompting its share price to plummet. The Japanese conglomerate may seek support from commercial and Japanese state-funded banks and is looking to sell part its core semiconductors business, according to media reports.

Toshiba said January 24 it is currently "considering measures to enhance profitability and secure a sound financial base." The company is barred from raising fresh funding on equity markets following an accounting scandal in 2015.

            Toshiba one-month share slump versus Tokyo TOPIX index

Source: Bloomberg Markets

Westinghouse purchased the S&W company from Chicago Bridge and Iron (BC&I) in a transaction completed in January 2016.

At that time, the goodwill for the transaction was estimated at around $87 million and the acquirer agreed to finalize the figure by the end of 2016 after measuring fair value of acquired assets and liabilities.

In its December 27 statement, Toshiba said "the possibility has been found that the goodwill will reach a level of several 100 billion yen or several billion US dollars, resulting in a negative impact on Toshiba's financial results, as a result of impairment of all or part of the goodwill."

Westinghouse found that the cost to complete the U.S. projects "will far surpass the original estimates, mainly due to increases in key project parameters," Toshiba said.

Delays to the construction of Vogtle 3 & 4 and V.C. Summer 2 & 3 projects led to long-running litigation between the developers and the contractor company.

The Vogtle 3 & 4 reactors were originally scheduled to come online in 2016 and 2017, but delays have pushed back the expected start up dates to 2019 (Unit 3) and 2020 (Unit 4).

Westinghouse's acquisition of S&W made Westinghouse the sole primary contractor for the Vogtle project. The company then subcontracted Fluor group to manage the construction workforce at Vogtle, as well as the V.C. Summer 2 & 3 plant being developed by the SCE&G and Santee Cooper group in South Carolina.

Under the latest project schedule, V.C. Summer 2 is forecast to be completed by 2019 while unit 3 is expected to be completed by 2020.

Toshiba will announce February 14 its estimate for the goodwill payments, along with third quarter results and revised fiscal year forecasts, it said.

US-Mexico nuclear trade mission scheduled for June

Executives from the Department of Commerce and the nuclear industry will lead a nuclear energy trade mission to Mexico this June to assess market opportunities in Mexico's nuclear new build program, the Nuclear Energy Institute (NEI) said in a statement January 18.

Mexico is considering building up to three new nuclear plants by 2028 at the Laguna Verde site near Veracruz, which hosts the country's two operational reactors, NEI said. The two operational reactors were supplied by General Electric and U.S. companies supply and service the units.

"Mexico is also considering small modular reactors [SMRs] for power and seawater desalination," NEI said.

                     Mexico's operational reactors

Source: World Nuclear Association

Mexico has set a target of 35% of energy from low-carbon sources by 2024, rising to 40% by 2035.

In summer 2016, the U.S. and Mexico negotiated a bilateral nuclear cooperation agreement to streamline the transfer of technology fuel and other major nuclear components. This "Section 123" agreement is expected to be implemented in 2017.

NRC to start review of Tennessee SMR site

The U.S. Nuclear Regulatory Commission has accepted and docketed Tennessee Valley Authority's (TVA's) Early Site Permit (ESP) application for SMR construction, allowing the regulator to begin a technical review of development at the clinch River site in Oak Ridge, Tennessee.

TVA submitted the ESP application to the NRC in May 2016 for up to 800 MW of Light Water Reactor (LWR) capacity. The ESP application addresses safety, environmental and emergency preparedness conditions at the site.

The 1,200-acre Clinch River site is situated close to the Department of Energy (DOE) Oak Ridge National laboratory.

The DOE has been a strong supporter of SMR development at Clinch River and is funding 50% of site development costs, including the ESP application costs.

To build the application, TVA used information from the LWR designs by BWXT mPower, Holtec, NuScale and Westinghouse. TVA plans to take a specific SMR design and assess it against the parameters used in the ESP application. Provided the design falls within the parameters, the early site permit can then be used for the combined build and operate license application (COLA).

In a statement January 13, TVA said there are several "evaluations and business decisions" that remain before the utility would commit to building SMRs at the Clinch River Site and a final decision is still several years away.

The utility would continue to "evaluate SMR designs and work to develop nuclear power plant options," it said.

TVA currently operates 8 GW of nuclear capacity. In October 2016, TVA brought online its 1.2 GW Watts Bar Unit 2 reactor, the first new U.S. nuclear generating capacity in 20 years. The plant cost $4.7 billion to build.

In May 2016, TVA announced it would sell its Bellefonte Nuclear Plant development property in northern Alabama, which it had been preserving as an option for large-scale nuclear plant build.

TVA's board decided to sell the Bellefonte property as its latest Integrated Resource Plan showed that new large-scale power generation sources will not be needed for at least 20 years, the utility said.

UK orders regulator to review Chinese reactor design

The UK government ordered January 10 the UK’s independent nuclear regulators, the Office for Nuclear Regulation and the Environment Agency, to start a Generic Design Assessment (GDA) of China's UK HPR1000 reactor design.

The UK HPR1000 design was developed by China General Nuclear (CGN). General Nuclear Services (GNS), a subsidiary of Electricite de France SA and China General Nuclear, proposes to install this design at the Bradwell nuclear site in Essex.

In September 2016 the UK government approved plans by EDF to build two 1.65 GW EPR units at the Hinkley Point C nuclear site in Somerset at a cost of 18 billion pounds. China is to take a third stake and provide 6 billion pounds to the project.

The UK government has also agreed in principle for EDF to develop further nuclear capacity at Sizewell in Suffolk and for EDF and its Chinese partners to develop new capacity at Bradwell.

GNS' Bradwell nuclear plant project is currently at a pre-planning stage and it will be several years before any detailed proposals are produced.

GNS will fund the cost of the GDA for the UK HPR1000 design.

EDF's EPR design is the only large scale reactor designed to have completed the GDA process. The process took over five years and was completed in 2012.

Hitachi-GE's UK Advanced Boiling Water Reactor design (UK ABWR) is at the detailed assessment stage of the GDA and design acceptance is expected to be granted in December 2017.

Westinghouse submitted its AP1000 design to the GDA process in 2007 but halted GDA activities in December 2011 with 51 outstanding issues remaining. In August 2014, Westinghouse recommenced the GDA process and is currently in the process of resolving outstanding issues, according to the Office for Nuclear Regulation.

EDF allowed to restart French 900 MW reactors hit by carbon concerns

France's nuclear safety regulator, Autorite de Surete Nucleaire (ASN), has approved the restart of nine out of twelve 900-MW reactors affected by carbon concentration issues in the steel of steam generator components manufactured by Japan Casting and Forging Corporation (JCFC), ASN said January 12.

In October, EDF was given three months to perform tests on the steam generator systems.

EDF is yet to complete the full testing documents for the remaining three reactor systems manufactured by JCFC, ASN said.

EDF's 58 nuclear power reactors are situated at 19 sites and provide around three quarters of France's power.

               France's installed power capacity by generation type

Source: RTE (France's transmission grid operator)

Last year ASN said the primary system steam generators in some reactors could contain high carbon concentrations which could lead to mechanical properties below expectations.

EDF and the safety authorities have been investigating the carbon anomalies located on channel heads of steam generators, as well as the manufacturing quality of other parts made by Areva.

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