Plans to build new nuclear energy plant in Cumbria collapse

Plans to build a new nuclear energy plant in Cumbria have been scrapped after Japan-based conglomerate Toshiba axed NuGen, the British unit behind the project.

The decision represents a blow to the government’s plans to step up nuclear energy production and the Cumbria plant would have churned out 7 per cent of the country’s electricity.

A spokesman for the government’s Business and Energy Department said Toshiba had made a ‘commercial decision’, adding that ‘new nuclear’ remained important.

Axed: Plans to build a new nuclear energy plant in Cumbria have been scrapped

Axed: Plans to build a new nuclear energy plant in Cumbria have been scrapped

Axed: Plans to build a new nuclear energy plant in Cumbria have been scrapped

But, unions have accused the government of allowing the £10billion project to collapse and failing to intervene to ensure it stayed on track. 

Justin Bowden, national officer of the GMB said: ‘The British Government has blood on its hands as the final sad but predictable nail is banged into the coffin of Toshiba’s jinxed jaunt into nuclear power.

‘Relying in this way on foreign companies for our country’s essential energy needs was always irresponsible.

‘Add to that the multiple opportunities to step in and take control, that were missed or ignored.’

Speaking to This is Money, Tim Yeo, former Tory MP and chair of pro-nuclear lobby group New Nuclear Watch Institute, said: ‘This is a huge disappointment and a crushing blow to hopes of a revival of the UK nuclear energy industry.

‘Although the Government has been in talks with Kepco over the NuGen project for more than a year it has still not decided what financial package will be offered to enable construction of new nuclear reactors to take place at Moorside.

‘It is hardly surprising that Toshiba has finally lost patience and pulled the plug.

‘In the past the British nuclear industry has suffered the consequences of a tendency to choose first of a kind (FOAK) technologies.’

Apologies: Toshiba's president Satoshi Tsunakawa previously acknowledged problems facing Toshiba

Apologies: Toshiba's president Satoshi Tsunakawa previously acknowledged problems facing Toshiba

Apologies: Toshiba’s president Satoshi Tsunakawa previously acknowledged problems facing Toshiba

He added: ‘This dithering is also jeopardising the chance to secure Korean investment into Britain just when it is most needed and deals a blow to job prospects in the Northwest.’ 

After a board meeting held on Thursday, Toshiba said it was winding up NuGen because of its inability to find a buyer for it. Costs also influenced the decision and had already spiralled to £400million.  

Initially, Korea Electric Power Corporation had been a preferred bidder to take over the nuclear power plant project, but those talks fell through after more than a year of negotiations. 

Speculation that the project was unravelling had been around for some time

In September, NuGen was forced to cut its workforce from 100 down to 60, prompting calls for the government to step in and ensure the project did not collapse.

Rebecca Long Bailey, shadow business secretary, said: ‘Today’s announcement by Toshiba is hugely concerning for the future of the sector and the thousands of jobs it would bring to Cumbria. Unfortunately, it’s not surprising given the Government’s long indecision and refusal to step in.’

Shares in Toshiba are up over 12 per cent. 

In September, the firm behind the construction of proposed nuclear power plant site Hinkley Point C in Somerset said the project was on track. In future, the Hinkley plant is expected to provide 7 per cent of the UK’s electricity needs for 60 years.

Government response to decision 

A spokesman for the Department for Business, Energy and Industrial Strategy, said: ‘We understand that Toshiba have faced a difficult decision in ending their involvement in new nuclear projects outside of Japan in light of their well-known financial challenges.

‘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.’

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