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Vogtle's reprieve: snatching defeat from the jaws of defeat

Nuclear Monitor Issue: 
Jim Green - Nuclear Monitor editor

Last year, the V.C. Summer twin-reactor AP1000 project in South Carolina was abandoned after the expenditure of at least US$9 billion. The project was initially estimated to cost US$9.8 billion1; when it was abandoned, the estimate was around US$25 billion.2

Last month, the last remaining reactor project in the US ‒ the Vogtle twin-reactor AP1000 project in Georgia ‒ came close to being abandoned due to massive cost overruns. The construction cost blowout at Vogtle is just as bad as that in South Carolina:

  • c.2008: US$9.5 billion 'initial' budget for the twin-reactor Vogtle project according to electric power utility JEA.4
  • 2008: US$10.4 billion5
  • 2009: US$14‒14.3 billion6,7
  • 2013: US15.5 billion8
  • Aug. 2017: US$25‒30 billion. Total Vogtle cost likely to exceed US$25 billion and could exceed US$27 billion according to a Southern Co. filing with the Securities and Exchange Commission.9 An analysis by the Augusta Chronicle found that total costs could approach US$30 billion.10
  • Aug.‒Sept. 2018: US$27‒30+ billion: In August, Southern Co. announced US$2.3 billion in additional cost overruns for Vogtle.4 S&P estimates the cost to be US$27‒28 billion including financing costs5 and states that "significant risks remain … and additional overruns or project delays are possible."11 JEA estimates total costs of "more than $30 billion" and notes that there is "no guarantee that this amount will not continue to increase".12 Morgan Stanley analysts say there is a "very high likelihood" of additional cost overruns.16

The current cost estimate for Vogtle reactors #3 and #4 is 10 times greater than Westinghouse's 2006 estimate of US$1.4‒$1.9 billion to build one AP1000 reactor.3 To find another blowout of that magnitude you'd need to go back to … Vogtle #1 and #2! Built in the 1970s and 1980s, the cost of the first Vogtle twin-reactor project skyrocketed 13-fold, from US$660 million to US$8.7 billion (around US$18 billion on today's money).13

The Vogtle project is 5.5 years behind schedule: planned startup dates of April 2016 and April 2017 have been pushed back to November 2021 and November 2022.

The project was 69.9% complete as of the end of July 2018, and construction 55.3% complete.14 Thus there is plenty of scope for further cost increases and delays.

Near-death experience

Vogtle's recent near-death experience began with the latest multi-billion-dollar cost increase: a US$2.3 billion increase announced in August. That automatically triggered a Project Adverse Event under the terms of the Vogtle Joint Ownership Agreement, requiring a vote by the four project owners ‒ Georgia Power (45.7%), Oglethorpe Power Corp. (30%), MEAG (22.7) and Dalton Utilities (1.6%) ‒ about whether to go ahead or to abandon the project.15 Georgia Power, MEAG and Dalton agreed to proceed. Oglethorpe held out for concessions but eventually agreed to proceed after several extensions to a deadline for a decision.

Under the revised agreement, Southern Co. subsidiary Georgia Power would pay an increased share (55.7% ‒ an additional 10%) of cost overruns up to US$1.6 billion beyond the current cost estimate and 65.7% of costs up to US$2.1 billion over the current estimate. Beyond that, minority owners would have the right to sell a portion of their stake in the project to Georgia Power, unless Georgia Power chose to abandon the project.15 Morgan Stanley analysts say there is a "very good chance" that future cost increases could exceed US$2.1 billion.16

Overall, the three smaller project partners (Oglethorpe, MEAG and Dalton) won minor risk reductions in relation to the inevitable future cost increases, but cost increases will no longer trigger a Project Adverse Event or another vote on the project.19 The minor partners were steamrolled according to the Energy and Policy Institute and "now only have one option for recourse; wait until costs go up by another $2.1 billion and forfeit their investment."19

The revised agreement also includes a provision to address a lawsuit from Jacksonville Electric Authority (JEA), which is doing everything it can to exit a Vogtle power purchase agreement it signed with MEAG.6 If JEA succeeds in exiting its agreement, Georgia Power would provide MEAG with up to US$250 million in loans to finance the plant's completion.17

JEA's legal filing against MEAG bemoans its "unlimited obligation to fund the exorbitant and ever-ballooning cost of constructing units of a nuclear power plant that JEA does not own, over which it has no control and which will be owned and controlled by private enterprises."18 It goes on to say: "JEA must satisfy this open-ended obligation to pay for MEAG's yet unknown and uncapped debt service regardless of the amount, regardless of whether the Additional Units are ever built or ever become operational, and regardless of whether JEA ever receives any electricity, capacity, or benefit whatsoever from the Additional Units."12

Carrots and sticks from the federal government have been important. Federal tax credits will amount to a subsidy of around US$2 billion. In addition, the federal government has provided loan guarantees to Vogtle project partners of US$8.7 billion, and has offered additional loan guarantees of US$3.7 billion. Last month, the Department of Energy lobbied the project partners to go ahead with Vogtle and warned that: "If the owners decide to cancel the project, the Department is prepared to move swiftly to fully enforce its rights under the terms of the Loan Guarantee Agreements, including the repayment provisions."12

Snatching defeat from the jaws of defeat

US Department of Energy spokesperson Shaylyn Hynes said the revised Vogtle agreement "will reaffirm America's international leadership in nuclear technology and ... mark the beginning of a nuclear renaissance in America."15

Yeah, right.

Long before the latest multi-billion-dollar cost increase, in May 2017, Atlanta Journal-Constitution journalists wrote: "Years behind schedule, billions over budget, and with a key contractor's bankruptcy clouding its future, the troubled Vogtle project near Augusta is fast becoming Exhibit A for why no U.S. utility before Atlanta-based Southern had tried building a new reactor in 30-plus years."20

Exhibit B is the abandoned V.C. Summer project in South Carolina.

Bloomberg opinion columnist Liam Denning argued that Southern Co. "snatched defeat from the jaws of a different kind of defeat" with the revised project agreement.21 He continued:

"While Vogtle may well be completed due to sheer political doggedness, it won't be for any reasonable economic reason. Even assuming no further overruns, it will already cost more than $11,000 per kilowatt of capacity, multiples of what a new gas-fired plant or utility-scale solar array would cost. …

"Nuclear power proponents rightly point out that it provides vast quantities of carbon-free, uninterrupted energy. They also raise concerns about the U.S. falling behind on nuclear technology. That may be a valid concern, but does rather raise the question as to why the good ratepayers of Georgia should be saddled with the costs of maintaining national security.

"The problem, however, is that these plants are gigantic, one-off projects prone to cost overruns and requiring years of planning and construction before they generate a cent of revenue. This is just an unacceptable risk for most commercial operators, and why government assistance in the form of regulated cost recovery, price guarantees or finance is so often crucial to getting them built."


1. World Nuclear Industry Status Report, 2 Feb 2017, 'Toshiba-Westinghouse: The End of New-build for the Largest Historic Nuclear Builder',

2. Brad Plumer, 31 July 2017, 'U.S. Nuclear Comeback Stalls as Two Reactors Are Abandoned',

3. Jon Gertner, 16 July 2006, 'Atomic Balm?',

4. Ross Williams, 19 Sept 2018, 'Vogtle fate rests in key vote, deadline Monday',

5. Peter Maloney, 2 Oct 2018, 'S&P downgrades Georgia Power's partners in Vogtle nuclear project',

6. Southern Alliance for Clean Energy, 20 Sept 2018, 'A Series of Unfortunate Events for Plant Vogtle – last new nuclear project in turmoil',

7. Ryan Alexander, 17 Aug 2017, 'Nuclear Waste for Taxpayers',

8. Sonal Patel, 24 Sept 2018, 'How the Vogtle Nuclear Expansion's Costs Escalated',

9. Gavin Bade, 3 Aug 2017, 'Vogtle nuke cost could top $25B as decision time looms',

10. Tom Corwin, 2 Sept 2017, 'Subsidizing new nuclear power such as Vogtle reactors in nation's interest, says expert',

11. Will Robinson, 30 Sept 2018, 'Credit rater downgrades JEA over Plant Vogtle exposure', Jacksonville Business Journal,

12. Will Robinson, 26 Sept 2018, 'Plant Vogtle's fate finally decided in latest vote',

13. David Schlissel, Michael Mullett, Robert Alvarez, March 2009, 'Nuclear Loan Guarantees Another Taxpayer Bailout Ahead?', Union of Concerned Scientists,

14. Georgia Power, 31 Aug 2018, 'Nineteenth Semi-annual Vogtle Construction Monitoring Report',

15. World Nuclear Association, 27 Sept 2018, 'Vogtle owners vote to continue construction',

16. Matt Kempner and Anastaciah Ondieki, 28 Sept 2018, 'After wrangling over Georgia nuclear plant, cost concerns remain', The Atlanta Journal-Constitution,

17. Gavin Bade, 26 Sept 2018, 'Vogtle nuclear plant owners agree to continue construction',

18. Times-Union Editorial Board, 23 Sept 2018, 'Sunday Editorial: Grand jury must get to the bottom of JEA's terrible contract',

19. Daniel Tait, 4 Oct 2018, 'Georgia Power Steamrolls MEAG, Oglethorpe in New Vogtle Agreement',

20. Russell Grantham and Johnny Edwards, 19 May 2017, 'Plant Vogtle: Georgia's nuclear 'renaissance' now a financial quagmire', The Atlanta Journal-Constitution,

21. Liam Denning, 28 Sept 2018, 'Nuclear Power's Big Problem Isn't That It's Nuclear',

Vogtle 3

Film review: 'The New Fire' and the old Gen IV rhetoric

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

The New Fire is a pro-nuclear propaganda film directed and produced by musician and film-maker David Schumacher. It's similar in some respects to the 2013 film Pandora's Promise.1,2 The New Fire premiere was held in October 2017 and it can be streamed online from 18 October 2018.

Promotional material claims that the film lacked "a supportive grant" (and celebrity endorsements and the backing of a major NGO) but the end-credits list numerous financial contributors: Berk Foundation, Isdell Foundation, Steven & Michele Kirsch Foundation, Rachel Pritzker, Roland Pritzker, Ray Rothrock, and Eric Uhrhane.

The film includes interviews with around 30 people (an overwhelming majority of them male) interspersed with footage of interviewees walking into buildings, and interviewees smiling. The musical underlay is a tedious drone ‒ a disappointment given Schumacher's musical background. A highlight is hearing Eric Meyer ‒ an opera singer turned pro-nuclear activist ‒ bursting into song at various locations around the COP21 climate conference in Paris in December 2015, while he and his colleagues handed out free copies of the pro-nuclear book Climate Gamble.

Interviewees are mostly aging but the film's main message is that young entrepreneurs may save the planet and its inhabitants with their Generation IV reactor projects. The film's website states: "David Schumacher's film focuses on how the generation facing the most severe impact of climate change is fighting back with ingenuity and hope. The New Fire tells a provocative and startlingly positive story about a planet in crisis and the young heroes who are trying to save it."3

Schumacher writes (in the press kit): "These brilliant young people – some of the most gifted engineers of their generation, who in all likelihood could have cashed in for a fortune by doing something else – believe deeply that nuclear power could play a key role in saving the planet. And they are acting on that conviction. They did the research. They raised the money. They used cutting edge computer technology to perfect their designs. They are the new face of nuclear power, and to me, the newest and most unlikely climate heroes."

These climate heroes are contrasted with anti-nuclear environmentalists. One interviewee says that "people of our generation are the first ones that have the opportunity to look at nuclear power without all the emotional baggage that previous generations have felt." Another argues that anti-nuclear environmentalists are "very good, decent, smart people" but the "organizational DNA … that they have inherited is strongly anti-nuclear." Another argues that environmental organizations "have been using nuclear power as a whipping boy for decades to raise funds". Another interviewee attributes opposition to nuclear power to an "irrational fear of the unknown" (which surely poses a problem for the exotic Generation IV concepts promoted in the film) and another says that "once people sort of understand what's going on with nuclear, they are much more open to it".

The film trots out the usual anti-renewables tropes and falsehoods: 100% renewables is "just a fantasy", renewables can contribute up to 20% of power supply and the remainder must be baseload: fossil fuels or nuclear power.

In rural Senegal, solar power has brought many benefits but places like Senegalese capital Dakar, with a population of one million, need electricity whether the sun is shining or not. A Senegalese man interviewed in the film states: "Many places in Africa definitely need a low cost, reliable, carbon neutral power plant that provides electricity 24/7. Nuclear offers one of the best options we have to do that kind of baseload." The film doesn't explain how a 1,000 MW nuclear plant would fit into Senegal's electricity grid, which has a total installed capacity of 633 MW.4 The 'microreactors' featured in The New Fire might help … if they existed.

Accidents such as those at Fukushima and Chernobyl get in the news because they are "so unusual" according to interviewee Ken Caldeira. And they get in the news, he might have added, because of the estimated death tolls (in the thousands for Fukushima5, ranging to tens of thousands for Chernobyl6), the costs (around US$700 billion for Chernobyl7, and US$192 billion (and counting) for Fukushima8), the evacuation of 160,000 people after the Fukushima disaster and the permanent relocation of over 350,000 people after the Chernobyl disaster.9

"Most people understand that it's impossible for a nuclear power plant to literally explode in the sense of an atomic explosion", an interviewee states. And most people understand that chemical and steam explosions at Chernobyl and Fukushima spread radionuclides over vast distances. The interviewee wants to change the name of nuclear power plants to avoid any conflation between nuclear power and weapons. Evidently he didn't get the memo that the potential to use nuclear power plants (and related facilities) to produce weapons is fast becoming one of the industry's key marketing points.

Conspicuously absent from the film's list of interviewees is pro-nuclear lobbyist Michael Shellenberger. We've taken Shellenberger to task for his litany of falsehoods on nuclear and energy issues10 and his bizarre conversion into an advocate of worldwide nuclear weapons proliferation.11 But a recent article by Shellenberger on Generation IV nuclear technology is informative and insightful ‒ and directly at odds with the propaganda in The New Fire.12

So, let's compare the Generation IV commentary in The New Fire with that in Shellenberger's recent article.

Transatomic Power's molten salt reactor concept

The film spends most of its time promoting Generation IV reactor projects including Transatomic Power's molten salt reactor (MSR) concept.

Scott Nolan from venture capital firm Founders Fund says that Transatomic satisfies his four concerns about nuclear power: safety, waste, cost, proliferation. And he's right ‒ Transatomic's MSRs are faultless on all four counts, because they don't exist. It's doubtful whether they would satisfy any of the four criteria if they did actually exist.

Shellenberger quotes Admiral Hyman Rickover, who played a leading role in the development of nuclear-powered and armed submarines and aircraft carriers in the US: "Any plant you haven't built yet is always more efficient than the one you have built. This is obvious. They are all efficient when you haven't done anything on them, in the talking stage. Then they are all efficient, they are all cheap. They are all easy to build, and none have any problems."

Shellenberger goes on to say:12

"The radical innovation fantasy rests upon design essentialism and reactor reductionism. We conflate the 2-D design with a 3-D design which we conflate with actual building plans which we conflate with a test reactor which we conflate with a full-sized power plant.

"These unconscious conflations blind us to the many, inevitable, and sometimes catastrophic "unknowns" that only become apparent through the building and operating of a real world plant. They can be small, like the need for a midget welder, or massive, like the manufacturing failures of the AP1000.

"Some of the biggest unknowns have to do with radically altering the existing nuclear workforce, supply chain, and regulations. Such wholesale transformations of the actually existing nuclear industry are, literally and figuratively, outside the frame of alternative designs.

"Everyone has a plan until they get punched in the face," a wise man once said. The debacles with the AP1000 and EPR are just the latest episodes of nuclear reactor designers getting punched in the face by reality."

Shellenberger comments on MSR technology:12

"New designs often solve one problem while creating new ones. For example, a test reactor at Oak Ridge National Laboratory used chemical salts with uranium fuel dissolved within, instead of water surrounding solid uranium fuel. "The distinctive advantage of such a reactor was that it avoided the expensive process of fabricating fuel elements, moderator, control rods, and other high-precision core components," noted Hewlett and Holl.

"In the eyes of many nuclear scientists and engineers these advantages made the homogeneous reactor potentially the most promising of all types under study, but once again the experiment did not reveal how the tricky problems of handling a highly radioactive and corrosive fluid were to be resolved."

In The New Fire, Mark Massie from Transatomic promotes a "simpler approach that gives you safety through physics, and there's no way to break physics". True, you can't break physics, but highly radioactive and corrosive fluids in MSRs could break and rust pipes and other machinery.

Leslie Dewan from Transatomic trots out the silliest advantage attributed to MSRs: that they are meltdown-proof. Of course they are meltdown-proof ‒ and not just in the sense that they don't exist. The fuel is liquid. You can't melt liquids. MSR liquid fuel is susceptible to dispersion in the event of steam explosions or chemical explosions or fire, perhaps more so than solid fuels.

Michael Short from MIT says in the film that over the next 2‒3 years they should have preliminary answers as to whether the materials in Transatomic MSRs are going to survive the problems of corrosion and radiation resistance. In other words, they are working on the problems ‒ but there's no guarantee of progress let alone success.

Dewan claims that Transatomic took an earlier MSR design from Oak Ridge and "we were able to make it 20 times as power dense, much more compact, orders of magnitude cheaper, and so we are commercializing our design for a new type of reactor that can consume existing stockpiles of nuclear waste."

Likewise, Jessica Lovering from the Breakthrough Institute says: "Waste is a concern for a lot of people. For a lot of people it's their first concern about nuclear power. But what's really amazing about it is that most of what we call nuclear waste could actually be used again for fuel. And if you use it again for fuel, you don't have to store it for tens of thousands of years. With these advanced reactors you can close the fuel cycle, you can start using up spent fuel, recycling it, turning it into new fuel over and over again."

But in fact, prototype MSRs and fast neutron reactors produce troublesome waste streams (even more so than conventional light-water reactors) and they don't obviate the need for deep geological repositories. A recent article in the Bulletin of the Atomic Scientists ‒ co-authored by a former chair of the US Nuclear Regulatory Commission ‒ states that "molten salt reactors and sodium-cooled fast reactors – due to the unusual chemical compositions of their fuels – will actually exacerbate spent fuel storage and disposal issues."13 It also raises proliferation concerns about 'integral fast reactor' and MSR technology: "Pyroprocessing and fluoride volatility-reductive extraction systems optimized for spent fuel treatment can – through minor changes to the chemical conditions – also extract plutonium (or uranium 233 bred from thorium)."

Near the end of the film, it states: "Transatomic encountered challenges with its original design, and is now moving forward with an updated reactor that uses uranium fuel." Transatomic's claim that its 'Waste-Annihilating Molten-Salt Reactor' could "generate up to 75 times more electricity per ton of mined uranium than a light-water reactor" was severely downgraded to "more than twice" after calculation errors were discovered. And the company now says that a reactor based on the current design would not use waste as fuel and thus would "not reduce existing stockpiles of spent nuclear fuel".14,15

So much for all the waste-to-fuel rhetoric scattered throughout The New Fire.

Michael Short from MIT claims MSRs will cost a "couple of billion dollars" and Dewan claims they will be "orders of magnitude cheaper" than the Oak Ridge experimental MSR. In their imaginations, perhaps. Shellenberger notes that "in the popular media and among policymakers, there has remained a widespread faith that what will make nuclear power cheaper is not greater experience but rather greater novelty. How else to explain the excitement for reactor designs invented by teenagers in their garages and famous software developers [Bill Gates / TerraPower] with zero experience whatsoever building or operating a nuclear plant?"12

Shellenberger continues:12

"Rather than address the public's fears, nuclear industry leaders, scientists, and engineers have for decades repeatedly retreated to their comfort zone: reactor design innovation. Designers say the problem isn't that innovation has been too radical, but that it hasn't been radical enough. If only the coolant were different, the reactors smaller, and the building methods less conventional, they insist, nuclear plants would be easier and cheaper to build.

"Unfortunately, the historical record is clear: the more radical the design, the higher the cost. This is true not only with the dominant water-cooled designs but also with the more exotic designs ‒ and particularly sodium-cooled ones."

Oklo's sodium-cooled fast neutron microreactor

The New Fire promotes Oklo's sodium-cooled fast neutron microreactor concept, and TerraPower's sodium-cooled fast neutron 'traveling wave' reactor (TerraPower is also exploring a molten chloride fast reactor concept).

Oklo co-founder Jacob DeWitte says: "There's this huge, awesome opportunity in off-grid markets, where they need power and they are relying on diesel generators … We were talking to some of these communities and we realized they use diesel because it's the most energy dense fuel they know of. And I was like, man, nuclear power's two million times as energy dense … And they were like, 'Wait, are you serious, can you build a reactor that would be at that size?' And I said, 'Sure'."

Which is all well and good apart from the claim that Oklo could build such a reactor: the company has a myriad of economic, technological and regulatory hurdles to overcome. The film claims that Oklo "has begun submission of its reactor's license application to the [US] Nuclear Regulatory Commission" but according to the NRC, Oklo is a "pre-applicant" that has gone no further than to notify the NRC of its intention to "engage in regulatory interactions".16

There's lots of rhetoric in the film about small reactors that "you can role … off the assembly line like Boeings", factory-fabricated reactors that "can look a lot like Ikea furniture", economies of scale once there is a mass market for small reactors, and mass-produced reactors leading to "a big transition to clean energy globally". But first you would need to invest billions to set up the infrastructure to mass produce reactors ‒ and no-one has any intention of making that investment. And there's no mass market for small reactors ‒ there is scarcely any market at all.17


TerraPower is one step ahead of Transatomic and Oklo ‒ it has some serious funding. But it's still a long way off ‒ Nick Touran from TerraPower says in the film that tests will "take years" and the company is investing in a project with "really long horizons … [it] may take a very long time".

TerraPower's sodium-cooled fast neutron reactor remains a paper reactor. Shellenberger writes:12

"In 2008, The New Yorker profiled Nathan Myhrvold, a former Microsoft executive, on his plans to re-invent nuclear power with Bill Gates. Nuclear scientist Edward "Teller had this idea way back when that you could make a very safe, passive nuclear reactor," Myhrvold explained. "No moving parts. Proliferation-resistant. Dead simple."

"Gates and Myhrvold started a company, Terrapower, that will break ground next year in China on a test reactor. "TerraPower's engineers," wrote a reporter recently, will "find out if their design really works."

"And yet the history of nuclear power suggests we should have more modest expectations. While a nuclear reactor "experiment often produced valuable clues," Hewlett and Holl wrote, "it almost never revealed a clear pathway to success." ...

"For example, in 1951, a reactor in Idaho used sodium rather than water to cool the uranium ‒ like Terrapower's design proposes to do. "The facility verified scientific principles," Hewlett and Holl noted, but "did not address the host of extraordinary difficult engineering problems." ...

"Why do so many entrepreneurs, journalists, and policy analysts get the basic economics of nuclear power so terribly wrong? In part, everybody's confusing nuclear reactor designs with real world nuclear plants. Consider how frequently advocates of novel nuclear designs use the future or even present tense to describe qualities and behaviors of reactors when they should be using future conditional tense.

"Terrapower's reactor, an IEEE Spectrum reporter noted "will be able to use depleted uranium ... the heat will be absorbed by a looping stream of liquid sodium ... Terrapower's reactor stays cool".

"Given that such "reactors" do not actually exist as real world machines, and only exist as computer-aided designs, it is misleading to claim that Terrapower's reactor "will" be able to do anything. The appropriate verbs for that sentence are "might," "may," and "could." ...

"Myhrvold expressed great confidence that he had proven that Terrapower's nuclear plant could run on nuclear waste at a low cost. How could he be so sure? He had modeled it. "Lowell and I had a month-long, no-holds-barred nuclear-physics battle. He didn't believe waste would work. It turns out it does." Myhrvold grinned. "He concedes it now."

"Rickover was unsparing in his judgement of this kind of thinking. "I believe this confusion stems from a failure to distinguish between the academic and the practical," he wrote. "The academic-reactor designer is a dilettante. He has not had to assume any real responsibility in connection with his projects. He is free to luxuriate in elegant ideas, the practical shortcomings of which can be relegated to the category of 'mere technical details.'""


1. Nuclear Monitor #764, 'Pandora's Promise' Propaganda, 28 June 2013,

2. Nuclear Monitor #773, 'Pandora's Propaganda', 21 Nov 2013,



5. Ian Fairlie, 2 April 2014, 'New UNSCEAR Report on Fukushima: Collective Doses',

6. 24 April 2014, 'The Chernobyl Death Toll', Nuclear Monitor #785,

7. Jonathan Samet and Joann Seo, 2016, 'The Financial Costs of the Chernobyl Nuclear Power Plant Disaster: A Review of the Literature',

8. Nuclear Monitor #836, 16 Dec 2016, 'The economic impacts of the Fukushima disaster',

9. World Health Organization, 13 April 2016, 'World Health Organization report explains the health impacts of the world's worst-ever civil nuclear accident',

10. Nuclear Monitor #853, 30 Oct 2017, 'Exposing the misinformation of Michael Shellenberger and 'Environmental Progress'',

11. Nuclear Monitor #865, 6 Sept 2018, 'Nuclear lobbyist Michael Shellenberger learns to love the bomb, goes down a rabbit hole',

12. Michael Shellenberger, 18 July 2018, 'If Radical Innovation Makes Nuclear Power Expensive, Why Do We Think It Will Make Nuclear Cheap?',

13. Lindsay Krall and Allison Macfarlane, 2018, 'Burning waste or playing with fire? Waste management considerations for non-traditional reactors', Bulletin of the Atomic Scientists, 74:5, pp.326-334,

14. James Temple, 24 Feb 2017, 'Nuclear Energy Startup Transatomic Backtracks on Key Promises',

15. Nuclear Monitor #849, 25 Aug 2017, 'James Hansen's Generation IV nuclear fallacies and fantasies',

16. NRC, 'Advanced Reactors (non-LWR designs)',, accessed 16 Sept 2018

17. Nuclear Monitor #800, 19 March 2015, 'Small modular reactors: a chicken-and-egg situation',

Transatomic Gen IV startup shuts down

Nuclear Monitor #867, 15 October 2018,

We wrote about Transatomic Power's proposed molten salt reactor (MSR) in the last issue of Nuclear Monitor.1 Since then, the startup has shut down.2,3

Transatomic had raised more than US$4 million from Founders Fund, Acadia Woods Partners, and others. But it was unable to raise US$15 million required for the next phase of the project.

In 2016, following the revelation of false calculations, Transatomic abandoned its plan to use waste (spent fuel) as fuel and it abandoned the associated claim that its 'Waste-Annihilating Molten-Salt Reactor' could "generate up to 75 times more electricity per ton of mined uranium than a light-water reactor".4 Its waste-annihilating reactor was reinvented as a waste-producing, uranium fueled reactor.

Transatomic co-founder Leslie Dewan put a positive spin on the company's collapse: "Today the advanced nuclear technology sector is thriving, with over 70 advanced reactor projects in progress, financing actively flowing to new technologies, promising engagement with the NRC, multiple films and TV documentaries covering innovations, and even bipartisan political support."2

According to the Third Way pro-nuclear lobby group, "at least five companies are already working with the Nuclear Regulatory Commission to prepare for licensing".5 In other words, not one of the Gen IV startups has gone further than to notify the Nuclear Regulatory Commission of their intent to engage in regulatory interactions ‒ and only five have taken that modest step.6

1. Nuclear Monitor #866, 24 Sept 2018, Film review: 'The New Fire' and the old Gen IV rhetoric,

2. Leslie Dewan, Sept 2018, 'Open-Sourcing Our Reactor Design, and the Future of Transatomic',

3. Energy Central, 2 Oct 2018, 'Transatomic Folds Its Tent ‒ Its Legacy May Live On',

4. James Temple, 24 Feb 2017, 'Nuclear Energy Startup Transatomic Backtracks on Key Promises',

5. John Milko, Todd Allen, and Ryan Fitzpatrick, 8 Feb 2018, 'Keeping Up with the Advanced Nuclear Industry',

6. Nuclear Regulatory Commission, 'Advanced Reactors (non-LWR designs)', accessed 3 October 2018.

U.S. nuclear bailout could cost $8‒17 billion a year

Nuclear Monitor Issue: 

The controversial Trump Administration plan to nationalize the nuclear energy marketplace could cost U.S. consumers US$8‒17 billion a year in artificially high electricity bills, with the prospect of extensive coal-fired power plant subsidies potentially doubling that figure. Further, the bailouts of nuclear and coal could trip up America's renewables industry, leaving the U.S. even further behind in the global race for clean energy technology development and deployment.

On June 6, the Nuclear Information & Resource Service (NIRS) released updated and expanded figures on the nuclear bailout costs estimated in its November 2016 report that concluded that federal handouts for nuclear alone could add up to US$280 billion to electricity bills by 2030. A bailout of coal-fired power plants would leave ratepayers and taxpayers holding the bag for even more. NIRS estimates that the current Trump bailout scheme could costs consumers US$8‒17 billion for just the nuclear element and as much again for coal subsidies.

Tim Judson, executive director, Nuclear Information & Resource Service (NIRS), said: "By pushing for a nationwide bailout for nuclear power and coal, the Trump administration is rushing headlong into an energy buzz saw, and they don't even seem to know it. Subsidizing the nuclear industry alone is likely to cost American consumers US$8 billion to US$17 billion per year, and subsidies for coal could cost just as much. Betting on old, increasingly uneconomical nuclear and coal power plants as a national security strategy is like gold-plating a Studebaker and calling it a tank. And it could destroy the booming renewable energy industry, which is already employing more Americans than coal and nuclear combined."

Peter A. Bradford is a former member of the U.S. Nuclear Regulatory Commission (NRC) and former chair of the Maine and New York utility commissions. Bradford also taught energy policy and law at the Vermont Law School. Commenting on the bailout scheme, Bradford said: "The Trump Administration's desire to tax American consumers to support failing power plants is energy policy-making gone haywire. As was said in the run-up to the 2003 invasion of Iraq, the facts are being fixed around the desired end result. We have no military crisis and no threats of our system reliability or resilience that require this drastic and expensive governmental intervention. Claims of such problems are fairy tales, straight out of Mother Goose."

Bradford continued: "The Administration's warnings of dire effects from power shortages caused by shortages of reliable and resilient generation are contradicted by all of the bodies with actual responsibility for assuring adequate supplies. There are no state or federal energy regulators petitioning DOE for these measures. Indeed, those who have spoken clearly have said that such steps are unnecessary. By overpaying hundreds of dollars per family per year for electricity that can be obtained far less expensively from other sources, the administration is impoverishing customers, cutting off construction and industrial jobs and suppressing energy innovation, in which the U.S. has been competing for global leadership."

Tyson Slocum, director, Energy Program, Public Citizen, said: "President Trump's asinine nuclear and coal bailout will cost households billions of dollars, but will bolster the profits of a handful of Trump's top campaign and financial supporters. Trump is charging consumers billions to fill the swamp with undeserving special interests."

Slocum said that any effort to force consumers and/or taxpayers to bailout the owners of nuclear and coal power plants under the guise of resilience, fuel security or national security is absurd and will be subject to vigorous legislative, regulatory and legal challenges.

As such, it is likely that the Administration is still months away from an actionable plan using any of the three statutes it has identified. Action under 202(c) of the Federal Power Act would involve a subsidy structured through electric rates, subject to review and approval by the Federal Energy Regulatory Commission. Action under the 1950 Defense Production Act would require Congressional appropriations, and therefore a taxpayer-based subsidy, as would action under the Fixing America's Surface Transportation Act. Further, the formal National Security Council review process to develop a national security threat assessment intervention plan is at least months away.


The theories advanced by the Trump Administration for the nuclear and coal bailouts are radical, unprecedented, and unsupported by any factual or empirical analysis. Nuclear and coal power plants expected to retire because of their uneconomic performance pose zero reliability or national security concerns.

Nonetheless, an internal National Security Council policy memo leaked on June 1 outlined potential actions by the US Department of Energy (DOE) to provide billions of dollars in financial assistance over two years to uneconomic nuclear and coal power plants using: Section 202(c) of the Federal Power Act; the 1950 Defense Production Act; and the Fixing America's Surface Transportation Act. While the Trump Administration has been trying to push for such bailouts in a variety of ways over the past year, the involvement of the NSC introduces a new twist in these efforts by trying to make fuel security a new national security priority that requires aggressive federal intervention into domestic energy markets.

The National Security Council memo focuses on supposed threats to natural gas pipelines and infrastructure from natural disasters and malicious attacks, but it does not consider the essential vulnerability of a national electricity grid based on central station power plants, of which coal and nuclear power plants are the most typical. They require high-voltage transmission lines to deliver electricity from coal and nuclear plants, hundreds of miles in many cases. In addition, the memo neither considers the vulnerability of power plants themselves, nor does it discuss the attractiveness of nuclear power plants in particular as targets for malicious acts.

In an odd twist, the memo cites provisions of the Defense Production Act to justify federal intervention into industry during times of war that make a stronger case for reliance on entirely different technologies than central station coal and nuclear power plants: Defense Production Act authorities should be used "to reduce the vulnerability of the United States to terrorist attacks" and to "encourage the geographic dispersal of industrial facilities in the United States to discourage the concentration of such productive facilities within limited geographic areas that are vulnerable to attack by an enemy of the United States." These provisions of the Defense Production Act, taken to their natural conclusion, should encourage the expansion of distributed and on-site power sources and modern infrastructure designs, like "islandable" microgrids, rather than trying to retain a grid design based on large, vulnerable central station power plants.

Audio from a June 6 media teleconference hosted by NIRS is posted at

The November 2016 NIRS report, 'Too Big to Bail Out: The Economic Costs of a National Nuclear Power Subsidy', is posted at

Before the US approves new uranium mining, consider its toxic legacy

Nuclear Monitor Issue: 
Stephanie Malin ‒ Assistant Professor of Sociology, Colorado State University

Uranium – the raw material for nuclear power and nuclear weapons – is having a moment in the spotlight. Companies such as Energy Fuels, Inc. have played well-publicized roles1 in lobbying the Trump administration to reduce federal protection for public lands with uranium deposits.2 The Defense Department's Nuclear Posture Review calls for new weapons production to expand the U.S. nuclear arsenal, which could spur new domestic uranium mining.3 And the Interior Department is advocating more domestic uranium production, along with other materials identified as "critical minerals."4

What would expanded uranium mining in the U.S. mean at the local level? I have studied the legacies of past uranium mining and milling in Western states for over a decade. My book examines dilemmas faced by uranium communities caught between harmful legacies of previous mining booms and the potential promise of new economic development.

These people and places are invisible to most Americans, but they helped make the United States an economic and military superpower. In my view, we owe it to them to learn from past mistakes and make more informed and sustainable decisions about possibly renewing uranium production than our nation made in the past.

Mining regulations have failed to protect public health

Today most of the uranium that powers U.S. nuclear reactors is imported. But many communities still suffer impacts of uranium mining and milling that occurred for decades to fuel the U.S.-Soviet nuclear arms race.5 These include environmental contamination6, toxic spills7, abandoned mines, under-addressed cancer and disease clusters8 and illnesses9 that citizens link to uranium exposure despite federal denials.

As World War II phased into the Cold War, U.S. officials rapidly increased uranium production from the 1940s to the 1960s. Regulations were minimal to nonexistent and largely unenforced, even though the U.S. Public Health Service10 knew that exposure to uranium had caused potentially fatal health effects in Europe11, and was monitoring uranium miners and millers for health problems.

Today the industry is subject to regulations that address worker health and safety, environmental protection, treatment of contaminated sites and other considerations.12 But these regulations lack uniformity, and enforcement responsibilities are spread across multiple agencies.13

This creates significant regulatory gaps, which are worsened by a federalist approach to regulation. In the 1970s the newly created Nuclear Regulatory Commission initiated an Agreement States program, under which states take over regulating many aspects of uranium and nuclear production and waste storage.14 To qualify, state programs must be "adequate to protect public health and safety and compatible with the NRC's regulatory program."15

Today 37 states have joined this program and two more are applying.16 Many Agreement States struggle to enforce regulations because of underfunded budgets, lack of staff and anti-regulatory cultures.4 These problems can lead to piecemeal enforcement and reliance on corporate self-regulation.

For example, budget cuts in Colorado have forced the state to rely frequently on energy companies to monitor their own compliance with regulations.17 In Utah, the White Mesa Mill – our nation's only currently operating uranium mill – has a record of persistent problems related to permitting, water contamination and environmental health, as well as tribal sacred lands and artifacts.18

Neglected nuclear legacies

Uranium still affects the environment19 and human health in the West, but its impacts remain woefully under-addressed. Some of the poorest, most isolated and ethnically marginalized communities in the nation are bearing the brunt of these legacies.

There are approximately 4,000 abandoned uranium mines in Western states.20 At least 500 are located on land controlled by the Navajo Nation.21 Diné (Navajo) people have suffered some of the worst consequences of U.S. uranium production, including cancer clusters and water contamination.22

A 2015 study found that about 85 percent of Diné homes are still contaminated with uranium, and that tribe members living near uranium mines have more uranium in their bones than 95 percent of the U.S. population.23 Unsurprisingly, President Donald Trump's decision to reduce the Bears Ears National Monument24 has reinvigorated discussion over ongoing impacts of uranium contamination across tribal and public land.25

Despite legislation such as the Radiation Exposure Compensation Act26 of 1990, people who lived near uranium production or contamination sites often became forgotten casualties of the Cold War. For instance, Monticello, Utah, hosted a federally owned uranium mill from 1942 to 1960.27 Portions of the town were even built from tailings left over from uranium milling, which we now know were radioactive.28 This created two Superfund sites that were not fully remediated until the late 1990s.29

Monticello residents have dealt with cancer clusters, increased rates of birth defects and other health abnormalities for decades.30 Although the community has sought federal recognition and compensation since 1993, its requests have been largely ignored.31

Today tensions over water access and its use for uranium mining are creating conflict between regional tribes and corporate water users around the North Rim of the Grand Canyon.32 Native residents, such as the Havasupai, have had to defend their water rights33 and fear losing access to this vital resource.

Uranium production is a boom-and-bust industry

Like any economic activity based on commodities, uranium production is volatile and unstable.34 The industry has a history of boom-bust cycles. Communities that depend on it can be whipsawed by rapid growth followed by destabilizing population losses.35

The first U.S. uranium boom occurred during the early Cold War and ended in the 1960s due to oversupply, triggering a bust.36 A second boom began later in the decade when the federal government authorized private commercial investment in nuclear power. But the Three Mile Island (1979) and Chernobyl (1985) disasters ended this second boom.

Uranium prices soared once again from 2007 to 2010. But the 2011 tsunami and meltdown at Japan's Fukushima Dai-ichi nuclear plant sent prices plummeting once again as nations looked for alternatives to nuclear power.

Companies like Energy Fuels maintain – especially in public meetings with uranium communities37 – that new production will lead to sustained economic growth.38 This message is powerful stuff. It boosts support, sometimes in the very communities that have suffered most from past practices.

But I have interviewed Westerners who worry that as production methods become more technologically advanced and mechanized, energy companies may increasingly rely on bringing in out-of-town workers with technical and engineering degrees rather than hiring locals – as has happened in the coal industry.39 And the core tensions of boom-bust economic volatility and instability persist.

Uranium production advocates contend that new "environmentally friendly" mills40 and current federal regulations will adequately protect public health and the environment.41 Yet they offer little evidence to counter White Mesa Mill's poor record.

In my view, there is little evidence that new uranium production would be more reliably regulated or economically stable today than in the past. Instead, I expect that the industry will continue to privatize profits as the public absorbs and subsidizes its risks.

Stephanie Malin is the author of the 2015 book, 'The Price of Nuclear Power: Uranium Communities and Environmental Justice', published by Rutgers University Press,

Reprinted from The Conversation, 22 Feb 2018,











































Georgia Public Service Commission continues Vogtle reactor boondoggle ‒ but the project is probably still doomed

Nuclear Monitor Issue: 
Tim Judson ‒ Executive Director, Nuclear Information & Resource Service

In December 2017, the Georgia Public Service Commission (PSC), which regulates electric and gas utilities in the south-eastern US state, voted to approve continued construction of two AP1000 reactors at Georgia Power's Plant Vogtle.1 This decision was unsurprising because of the Commission's utter failure to question the project throughout its ten-year history, but the decision is all the more ridiculous and unfortunate for it.

The vote flies in the face of the evidence about the project's likelihood for continued failure, the state's energy needs, and the PSC staff's own recommendation to cancel the Vogtle reactors if Georgia Power did not agree to swallow US$4 billion of the cost.2

The PSC's decision is far from the end of the story ‒ more of a momentary reprieve that helps the industry save face, but not for long. The nuclear industry and its political backers simply could not afford to lose this round over Vogtle – and it is likely that significant outside pressure came to bear on the PSC, not only from Southern Co. and its army of lobbyists, lawyers, and government cronies. In fact, the Commission truncated its review of Vogtle, originally scheduled for a PSC vote in early 2018.

Time is only working against this project, with more information coming out each week regarding engineering and project planning failures, and subsequent coverups and collusion between utilities, Westinghouse, and regulators. Vogtle's twin project in South Carolina – the V.C. Summer 2 and 3 reactors – was cancelled in July 2017, leading to investigations of the project that have revealed years-long coverups3 leading to the project's failure and cancellation, resignations of utility executives4, utility reform legislation5, and a vote to deny the South Carolina utility's recovery of costs and reducing customers' bill by 18%.6

The PSC's vote to 'damn the torpedoes, full speed ahead' exempts the Commission from having to consider even more damning evidence that may well emerge in the coming weeks.

That said, the fight is not over, by any means. There are more days of reckoning to come in the years ahead. In 2014, the US Department of Energy issued US$6.5 billion taxpayer-guaranteed loans to Vogtle partners Georgia Power and Oglethorpe Power with $0 credit subsidy fee (similar to a down payment, to reduce the government's financial risk).7 Additional loan guarantees of US$1.8 billion were granted in 2015 (to project partner Municipal Electric Authority of Georgia ‒ MEAG Power), as well as an offer by the US Department of Energy to provide another US$3.7 billion in loan guarantees in September 2017 (to Georgia Power, Oglethorpe and MEAG).8

In 2014, it seemed to many like that would be the last straw – zero risk to Georgia Power for repaying a massive loan that covered all of Georgia Power's share of the project. But then the utility continued asking for rate hike after rate hike as the costs of Vogtle continued to go up9 … and then Westinghouse had to buy out the project's main contractor10, CB&I, to settle a mountain of legal disputes11 … then Westinghouse went bankrupt12 after taking over CB&I and inheriting all of the project's problems … then the V.C. Summer reactors were canceled13 … then the scandals and coverups14 of engineering problems started to emerge … and here we are today.

The PSC should have concluded the sorry saga and canceled Vogtle. Just don't be too quick to judge the vote a failure for those calling for Georgia to ditch the reactors. Environmental and consumer activists have mounted a heroic fight to stop Vogtle, in the face of monstrous political odds. And the foundation is starting to crack: Georgia PSC staff for the first time admitted not only that the Vogtle project has problems but recommended it be canceled if the utility didn't agree to swallow US$4 billion of the cost.15 Now, there is a division in the ranks of the utility establishment – making it as likely as not that the PSC's vote is really the beginning of the end for Vogtle.

Recently, I was looking over old status reports on reactor construction from the 1980s, and was reminded that Vogtle 1 and 2 were the single most expensive nuclear project in the first generation of nukes in the US – costing US$8.8 billion by the time the reactors were both completed in 1989 (that would be about US$18 billion today).16 Now, 30 years later, Southern Co. / Georgia Power is doubling down for a two-fer, with Vogtle 3 and 4 projected to cost US$25 billion. There is no doubt that Southern Co. has recouped massive profits on Vogtle 1 and 2, through the utility's guaranteed return on investment, and is desperate for even greater profits if Vogtle 3 and 4 ever come online.

The truth is, Southern Co. is not qualified to manage a reactor construction project (it operates six reactors, but doesn't design or build them)17; its new contractor, Bechtel, isn't going to assume any of the cost or risk to finish the reactors18; and the rotten underbelly of technical and financial problems19 plaguing the Vogtle reactors' construction means, at the very least, years more in delays and billions more in costs should be expected. And probably more train wrecks along the way.

Had the PSC cancelled the project in December – or forced Southern Co. to do so by holding the company accountable for the massive cost overruns – they could have saved a lot of face and pinned the blame on Westinghouse and their own 'bad apples'. Going forward, it will be a different story: Southern Co. and the Georgia PSC now have no one else to blame. And they could find themselves facing the same cleaning of the house now taking place across the border in South Carolina.

The US 'nuclear renaissance' is dead

It's hard to overestimate how desperate the US nuclear industry is to keep Vogtle construction going. Rightly or wrongly (more likely the latter), the industry views the completion of Vogtle as vital to its future.

Vogtle 3 and 4 are now the only new reactors being built in the US, more than a decade after the proclamation of a 'Nuclear Renaissance' which led to license applications for 30 new reactors between 2007 and 2010. While many of the licenses were approved, only V.C. Summer and Vogtle started construction – twin projects, both using Westinghouse's AP1000 reactor design. By early 2017, they had bankrupted Westinghouse – the largest nuclear designer/builder in the world, responsible for about 50% of reactors around the globe. Westinghouse now says it will not undertake any new reactor projects, nor will it complete Vogtle and V.C. Summer. And with V.C. Summer 2 and 3 cancelled, it means 28 of the 30 'Nuclear Renaissance' reactors have now been formally abandoned or indefinitely shelved.

The story of V.C. Summer is one of stark opportunity costs, one that looms over Georgia PSC's decision to charge ahead with Vogtle: South Carolina utilities wasted ten years and US$9 billion on the project. Ratepayers are paying 18% of their monthly bills for two reactors that will never generate a single watt of electricity. They were still 5‒10 years and US$16 billion from completion – a completely rational basis for cancelling the project.

But had the utilities eschewed the nuclear option in 2007 and invested in energy efficiency and renewables, not only would they have reduced carbon emissions and electricity usage significantly by now, South Carolina families and businesses would have lower electric bills today and the state could have built a strong, sustainable clean energy economy and created thousands of jobs.

If Georgia had cancelled Vogtle in December, the nuclear industry's case that it has a meaningful role to play in the country's energy future, addressing climate change, or anything else would be self-evidently false. With at least two reactors being built that could operate into the 2060s, there's at least a chance that the US will still have some nuclear-generated electricity in the late 21st Century.

But the industry can't keep itself going on the backs of just two over-budget, hopelessly delayed, unnecessary reactors. Georgia doesn't need Vogtle 3 and 4, and it never did. But by the time the reactors are completed ‒ if ever ‒ that will be the world's most expensive novelty item. Of course, the farce will quickly turn to tragedy if those nuclear mementos were ever to start splitting atoms ‒ generating nuclear waste that will be hazardous for hundreds of thousands of years, and a multi-billion dollar bill for decommissioning the reactors and cleaning up their radioactive mess.

With or without Vogtle 3 and 4, the only future nuclear has left in the US is keeping increasingly old, dangerous, uneconomical, and uncompetitive reactors going for as long as it can – while solar, wind, energy efficiency, storage, electric vehicles, smart appliances, microgrids, and other modern, more environmentally sustainable, consumer-friendly, and increasingly affordable energy options take off.





















Vogtle 3Vogtle 4

Exposing the misinformation of Michael Shellenberger and 'Environmental Progress'

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor, and national nuclear campaigner with Friends of the Earth Australia

Michael Shellenberger's pro-nuclear lobby group 'Environmental Progress' (EP) is celebrating the decision to proceed with two partially-built reactors in South Korea. A citizens jury appointed by the government voted almost 60% in favor of completing the reactors. President Moon Jae-in said the government would allow construction of the reactors to proceed but "we will completely stop all plans for the construction of new nuclear reactors."1

It's doubtful that Shellenberger's California-based organization could have significantly swayed the citizens jury in South Korea, but EP was very active in the debate and presumably had some effect in shifting opinions. Here is a summary of the work EP carried out in South Korea this year:2

  • EP published a 62-page pro-nuclear report ‒ 'The High Cost of Fear: Understanding the Costs and Causes of South Korea's Proposed Nuclear Energy Phase-Out'.3
  • Shellenberger visited South Korea four times between April and October 2017, giving speeches, holding press conferences on collaborating with nuclear advocates. He claims that dozens of media outlets reported on EP's visits, that a press conference in Seoul was "packed"4, and that he enjoyed "a crush of media attention".5
  • EP sent a sign-on letter to South Korean President Moon Jae-in in July 2017 and another in August 2017.
  • In October, EP wrote to the citizens jury tasked with deciding the fate of the two partially-built reactors (Shin Kori 5 and 6).6
  • EP produced a video promoting nuclear power in South Korea.
  • Shellenberger has been talking and writing about his bizarre plan to bring peace to the Korean Peninsula by supporting the development of nuclear power in North Korea.
  • And, according to Shellenberger, EP countered the "lies" of Friends of the Earth (FOE) and Greenpeace in "two investigative pieces and three separate open letters to President Moon and the citizens jury that were signed by climate scientists and environmentalists from around the world."6

EP's campaign has involved a blizzard of misinformation and relentless, dishonest attacks against environment groups, particularly Friends of the Earth (FOE) and Greenpeace. Shellenberger claims4 that the "greatest coup" of the two groups was the "Hollywood-style anti-nuclear disaster movie" called Pandora7 which was released last year and has been watched by millions, mostly on Netflix. But FOE and Greenpeace had nothing to do with the production of the Pandora film!

Shellenberger states: "After it was accused of secretly financing the film, Greenpeace insisted it had merely funded the screenings ..."8 To translate and correct Shellenberger's misinformation: Greenpeace was falsely accused of secretly financing the film (it isn't clear why funding an anti-nuclear film would be objectionable, any more than EP's funding of a pro-nuclear film). The source of the accusation isn't named ‒ perhaps it was Shellenberger himself! Greenpeace merely hosted a screening of the film (or at most a few screenings) and spoke at Q&A sessions at a few film screenings.9

Shellenberger claims the Pandora film must have cost tens of millions of dollars to make (although the film-makers say the budget was half a million) but that "amount is peanuts to an organization like Greenpeace International and natural gas interests".8 He seems to be insinuating that Greenpeace and/or natural gas interests funded the film but provides no evidence in support of his claims.

The funding of the Pandora film isn't an important issue but it neatly illustrates Shellenberger's M.O. of relentless repetition of falsehoods in the hope that some mud sticks.

The Pandora film "propelled to the presidency an anti-nuclear candidate, Moon Jae-in", Shellenberger claims.4 Seriously? Moon Jae-in would not have been elected if not for a Netflix film?!

Shellenberger himself featured in the dishonest and wildly inaccurate 'Pandora's Promise' film a few years ago.10,11

South Korea's 'nuclear mafia'

Arguably the main reason Moon Jae-in was elected to the presidency in May 2017 was to clean up widespread corruption ‒ including corruption in the nuclear industry.12

EP describes the nuclear corruption scandal as a "paperwork scandal".3 But it wasn't just a "paperwork scandal" ‒ it involved serious incidents such as a power failure in May 2012 which led to a rapid rise in the Kori-1 reactor core temperature, and a cover-up up of that incident.13 That was followed by revelations of an industry-wide scandal involving fake safety certificates ("paperwork") for reactor parts, sub-standard reactor parts, and bribery.13 The sub-standard reactor parts included safety-critical components such as defective control cabling that triggered shutdowns at two nuclear plants.14 According to a whistleblower, equipment failed under Loss-Of-Coolant-Accident conditions during at least one concealed test.15 Another whistleblower revealed that control cables supplied to four reactors with faked certificates had failed safety tests.16

EP argues that the nuclear corruption scandal "demonstrated the independence of the Korean safety regulator". But the corruption dated back to 200414 and possibly earlier and went undetected for at least seven years. Public revelation of the scandal was a triumph for a small number of whistleblowers; it was deeply embarrassing for the regulator.

EP asserts that "suppliers as well as senior executives were held accountable" for their corruption. But a 2014 parliamentary audit revealed that some officials fired from KEPCO Engineering and Construction were rehired.17 And the New York Times reported that despite the government's pledge to impose a 10-year ban on suppliers found to have falsified documents, KHNP imposed a six-month ban.18 The New York Times continued: "And nuclear opponents say that more fundamental changes are needed in the regulatory system, pointing out that one of the government's main regulating arms, the Korea Institute of Nuclear Safety, gets 60 percent of its annual budget from Korea Hydro [& Nuclear]."18

The scandal was still on the boil in 2014. Korea Times noted in June 2014 that more fake quality certificates had been uncovered and that government testing facilities were found to have failed to conduct adequate tests before issuing certificates.19

Korea Times editorialized: "Most disheartening in the latest revelation of irregularities is that the state-run certifiers failed to detect fabrications by skipping the required double-testing. ... Given the magnitude of corruption in the nuclear industry arising from its intrinsic nature of being closed, the first step toward safety should be to break the deep-seated food chain created by the so-called nuclear mafia, which will help enhance transparency ultimately. With the prosecution set to investigate the suppliers, the certifiers will face business suspension. But it's imperative to toughen penalties for them, considering that light punitive measures have stood behind the lingering corruption in the nuclear industry."19

South Korea's energy mix

The Moon Jae-in government plans to reduce reliance on coal (from 43% of electricity generation to 25% by 203020) and nuclear (from 30% to 18% by 203020, with long-term ambitions to phase-out nuclear power) in favour of gas (from 20% to 37% by 203020) and renewables (from 1.8%21 to 20% by 203020).

In an August 2017 report, EP plugs in a bunch of false and arbitrary assumptions to concoct a scare-story in which the proposed changes to the power-generation mix cost a minimum of US$10 billion per year (to import gas and to build gas-fired power plants ... there is no costing for the replacement of aging reactors, apparently they will operate forever), result in thousands of avoidable deaths from air pollution, and increase carbon emissions by an amount equivalent to adding 15‒27 million cars.3

Among other arbitrary, inexplicable assumptions is the assumption that gas replaces nuclear power.3 (That assumption is part of a broader EP propaganda campaign to convince people of the falsehood that "every time nuclear plants close they are replaced almost entirely by fossil fuels".22) If EP wants to arbitrarily assume that gas replaces nuclear under the 2030 targets, then it ought to assume that the planned 18% reduction in coal is replaced by the planned 18% increase in renewables ‒ but no such assumption is made.

Instead, the EP report asserts that "replacing the nation's nuclear plants would require a significant increase in coal and/or natural gas".3 But the 2030 targets have the growth in renewable electricity generation comfortably ahead of the reduction in nuclear power.

And the EP report falsely asserts that the "removal of nuclear plants from the grid would extend the life of coal plants"3 even though the government clearly plans to reduce reliance on coal plants and has already taken steps in that direction since the May 2017 election.

The EP report asserts that replacing "South Korea's remaining nuclear plants with natural gas would produce carbon pollution the equivalent of adding 27 million U.S. cars to the road."3 But ... again ... the South Korean government isn't planning to replace nuclear with gas; it is planning to reduce reliance on coal and nuclear in favour of gas and renewables. The planned increase in gas nearly matches the decline in more carbon-intensive coal, and the growth of renewables more than compensates for the loss of nuclear.

A sign-on letter organized by EP warns that a "significant expansion of natural gas could pose a significant threat to public safety" and cites two accidents in South Korea resulting in 83 deaths and 181 injuries.23 But it is silent about the costs, ill-health and deaths arising from nuclear disasters such as the Fukushima fires, meltdowns and hydrogen explosions. And it is silent about the myriad benefits of expanding renewable power generation.

Peace on the Korean peninsula

Shellenberger thinks that supporting the development of nuclear power in North Korea is the key to peace on the Korean peninsula. He claims that "a nuclear phase-out in South Korea would destroy one of the best means of creating peace with North Korea" because it would compromise South Korea's ability to promote the development of nuclear power in North Korea.4

A sign-on letter initiated by EP advocates a new framework agreement involving US and South Korean support for the development of nuclear power in North Korea, in return for North Korea accepting IAEA inspections of its nuclear program, ending its missile tests and limiting its nuclear arsenal.24

The "new framework" is much the same as the old 1994 Agreed Framework, which was a complete failure. If the power reactors proposed under the 1994 agreement had been completed before North Korea terminated IAEA safeguards during the collapse of the Agreed Framework, those reactors might now be used for weapons production in addition to North Korea's small 'experimental power reactor' and its enrichment program.

There is no reason to believe the North Korean regime would limit let alone abandon its nuclear weapons program if other nations helped the regime develop nuclear power plants (or other types of power plants). Nor is there any reason to believe that the US and other nations would consider a "limiting" of the regime's nuclear arsenal (whatever that means) to be adequate.

Another reason to be skeptical about the "new framework" is the possibility that reactors in both North and South Korea could be deliberately or inadvertently struck in the event of military conflict. According to Yonhap News, a report by South Korean energy utility KHNP noted that South Korea's power reactors have not been designed to deal with military attacks ‒ the outer protective walls were not designed to withstand a missile strike or other forms of concerted attacks.25 Kim Jong-hoon, a parliamentarian representing the conservative Liberty Korea Party, said earlier this year that Seoul was several years behind the US in coming up with safety measures to deal with military and terrorist attacks. "The fact that the country has not taken action in the past is a serious lapse, especially with North Korea's evolving missile threats," Kim said.25

Nuclear power and weapons proliferation

Shellenberger states: "One of FOE-Greenpeace's biggest lies about nuclear energy is that it leads to weapons. Korea demonstrates that the opposite is true: North Korea has a nuclear bomb and no nuclear energy, while South Korea has nuclear energy and no bomb."4

In fact, the connections between nuclear power (and associated industries such as enrichment and reprocessing) and weapons proliferation are well understood and there are countless real-world examples demonstrating the risks.26

Prominent nuclear lobbyists are now openly talking about the connections between nuclear power (and related industries) and weapons production in order to boost the case for further subsidies to support the 'civil' nuclear industry, particularly in the US.27 It seems Shellenberger didn't get the memo.

As for Shellenberger's claims about proliferation on the Korean peninsula, he ignores the fact that North Korea uses what is calls an 'experimental power reactor' (based on the UK Magnox power reactor design) to produce plutonium for weapons.28 He ignores the fact that North Korea acquired enrichment technology from Pakistan's A.Q. Khan network, who stole the blueprints from URENCO, the consortium that provides enrichment services for the nuclear power industry.28 He ignores the fact that North Korea's reprocessing plant is based on the design of the Eurochemic plant in Belgium, which provided reprocessing services for the nuclear power industry.28

And Shellenberger ignores South Korea's history of covertly pursuing nuclear weapons, a history entwined with the country's development of nuclear power. For example, the nuclear power program provided a rationale for South Korea's pursuit of dual-use reprocessing technology.

Chernobyl and Fukushima

Shellenberger says that at a recent talk in Berlin: "Many Germans simply could not believe how few people died and will die from the Chernobyl accident (under 200) and that nobody died or will die from the meltdowns at Fukushima. How could it be that everything we were told is not only wrong, but often the opposite of the truth?"4

There's a simple reason that Germans didn't believe Shellenberger's claims about Chernobyl and Fukushima ‒ they are false.

Shellenberger claims that "under 200" people have died and will die from the Chernobyl disaster. In fact, the lowest of the estimates of the Chernobyl cancer death toll is the World Health Organization's estimate of "up to 9,000 excess cancer deaths" in the most contaminated parts of the former Soviet Union.29 And of course there are higher estimates for the death toll across Europe.30,31

Shellenberger claims that the Fukushima meltdowns "killed precisely no one" and that "nobody died or will die from the meltdowns at Fukushima".4 An EP report has this to say about Fukushima: "[T]he science is unequivocal: nobody has gotten sick much less died from the radiation that escaped from three meltdowns followed by three hydrogen gas explosions. And there will be no increase in cancer rates."3

In support of those assertions, EP cites a World Health Organization report that directly contradicts EP's claims. The WHO report concluded that for people in the most contaminated areas in Fukushima Prefecture, the estimated increased risk for all solid cancers will be around 4% in females exposed as infants; a 6% increased risk of breast cancer for females exposed as infants; a 7% increased risk of leukaemia for males exposed as infants; and for thyroid cancer among females exposed as infants, an increased risk of up to 70% (from a 0.75% lifetime risk up to 1.25%).32

Applying a linear-no threshold (LNT) risk factor to the estimated collective radiation dose from Fukushima fallout gives an estimated long-term cancer death toll of around 5,000 people.33 Nuclear lobbyists are quick to point out that LNT may overestimate risks from low dose and low dose-rate exposure. But LNT may also underestimate the risks. The 2006 report of the US National Academy of Sciences' Committee on the Biological Effects of Ionizing Radiation (BEIR) states: "The committee recognizes that its risk estimates become more uncertain when applied to very low doses. Departures from a linear model at low doses, however, could either increase or decrease the risk per unit dose."34 And the BEIR report states that "combined analyses are compatible with a range of possibilities, from a reduction of risk at low doses to risks twice those upon which current radiation protection recommendations are based."34

Fukushima evacuation

Shellenberger claims that the Fukushima evacuation was "entirely unnecessary and indeed counterproductive" and it was the "outcome of the kind of fear-mongering engaged in by Moon, FOE, and Greenpeace."4 But of course Moon Jae-in, FOE and Greenpeace had nothing to do with the evacuation of 160,000 people in the aftermath of the Fukushima disaster. Evacuations were ordered not on the basis of fear-mongering by nuclear critics; they were ordered on the basis of multiple fires, hydrogen explosions and presumed meltdowns.

EP states: "In 2013, the United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) concluded that the vast majority of the Fukushima evacuation zone is safe and nearly all residents could have returned long ago ‒ indeed, most should never have left."3 But the UNSCEAR report didn't conclude that the vast majority of the Fukushima evacuation zone is safe or that nearly all residents could have returned long ago, and it didn't state that most evacuees should never have left.35 The UNSCEAR report states: "The actions taken to protect the public significantly reduced the radiation exposures that could have been received. This was particularly the case for settlements within the 20-km evacuation zone and the deliberate evacuation zones, where the protective measures reduced the potential exposures in the first year by up to a factor of 10."35

An EP report berates the Japanese government for failing to follow "normal protocols" by ordering Fukushima residents to evacuate instead of sheltering in place.3 EP cites a 2015 IAEA report36 in support of that argument, but nowhere in the IAEA report (or any IAEA report) is there a proscription against evacuation in response to nuclear accidents. No IAEA report states that sheltering in place should be the "normal protocol" in the event of a nuclear accident ‒ the appropriate response depends entirely on the circumstances. A 2011 IAEA report points to the impracticality of sheltering in place as a long-term response to elevated radiation levels following nuclear accidents: "Lesson 12: The use of long term sheltering is not an effective approach and has been abandoned and concepts of 'deliberate evacuation' and 'evacuation-prepared area' were introduced for effective long term countermeasures using guidelines of the ICRP [International Commission on Radiological Protection] and IAEA."37

The 2015 IAEA report notes that radiation levels were astronomical in some areas in the days after the Fukushima disaster ‒ even in some locations beyond the 20 km exclusion zone, dose rates of the order of a few hundred microsieverts per hour were measured from 15 March 2011 onward.36 Thus the annual public limit of 1 millisievert from anthropogenic sources would be reached in just a few hours, and the Japanese government's new limit of 20 millisieverts in Fukushima-contaminated regions would be reached in just a few days.

Fake scientists and radiation quackery

EP's UK director John Lindberg is described as an "expert on radiation" on the EP website.38 In fact, he has no scientific qualifications whatsoever let alone specialist qualifications regarding the health effects of ionizing radiation. Likewise, a South Korean article39 reposted on the EP website (without correction) falsely claims that Shellenberger is a scientist; in fact, he has a degree in cultural anthropology.

Lindberg is an 'Associate Member' of Scientists for Accurate Radiation Information (SARI)40, a group comprised mostly of quacks, cranks, non-scientists and conspiracy theorists whose views are directly at odds with those of scientific associations such as UNSCEAR.

SARI is at war with the linear, no-threshold (LNT) model ‒ the group's short 'Charter & Mission' insists three times that LNT is "misinformation".41 Yet LNT enjoys heavy-hitting scientific support. For example the 2006 report of the US National Academy of Sciences' Committee on the Biological Effects of Ionizing Radiation states that "the risk of cancer proceeds in a linear fashion at lower doses without a threshold and … the smallest dose has the potential to cause a small increase in risk to humans."34 Likewise, a report in the Proceedings of the National Academy of Sciences states: "Given that it is supported by experimentally grounded, quantifiable, biophysical arguments, a linear extrapolation of cancer risks from intermediate to very low doses currently appears to be the most appropriate methodology."42

A 2010 UNSCEAR report isn't sold on the linear part of LNT but it is at odds with SARI (and EP) on the question of a threshold. The UNSCEAR report states that "the current balance of available evidence tends to favour a non-threshold response for the mutational component of radiation-associated cancer induction at low doses and low dose rates."43 By contrast, SARI promotes hormesis ‒ the discredited view that low-dose radiation exposure is beneficial to human health.44

Attacking environment groups

Shellenberger reduces the complexities of environmental opposition to nuclear power to the claim that in the 1960s, an "influential group of conservationists within Sierra Club feared that cheap, abundant electricity from nuclear would result in overpopulation and resource depletion" and therefore decided to campaign against nuclear power.4

If such views had any currency in the 1960s, they certainly don't now. Yet EP asserts that Greenpeace and FOE "oppose cheap and abundant energy"3 and Shellenberger asserts that "the FOE-Greenpeace agenda has never been to protect humankind but rather to punish us for our supposed transgressions."4 And Shellenberger suggests that such views are still current by asserting that the anti-nuclear movement has a "long history of Malthusian anti-humanism aimed at preventing "overpopulation" and "overconsumption" by keeping poor countries poor."8 Again we see Shellenberger's M.O. of relentless repetition of falsehoods in the hope that mud will stick.

In an 'investigative piece' ‒ titled 'Enemies of the Earth: Unmasking the Dirty War Against Clean Energy in South Korea by Friends of the Earth (FOE) and Greenpeace' ‒ Shellenberger lists three groups which he claims have accepted donations "from fossil fuel and renewable energy investors, as well as others who stand to benefit from killing nuclear plants".4 FOE and Greenpeace don't feature among the three groups even though the 'investigative piece' is aimed squarely at them.

Undeterred by his failure to present any evidence of FOE and Greenpeace accepting fossil fuel funding (they don't), Shellenberger asserts that the donors and board members of FOE and Greenpeace "are the ones who win the government contracts to build solar and wind farms, burn dirty "renewable" biomass, and import natural gas from the United States and Russia."4 Really? Where's the evidence? There's none in Shellenberger's 'investigative piece'.

In an article for a South Korean newspaper, Shellenberger states: "Should we be surprised that natural gas companies fund many of the anti-nuclear groups that spread misinformation about nuclear? The anti-nuclear group Friends of the Earth ‒ which has representatives in South Korea ‒ received its initial funding from a wealthy oil man ..."45 He fails to note that the donation was in 1969! And he fails to substantiate his false insinuation that FOE accepts funding from natural gas companies, or his false claim that natural gas companies fund "many of the anti-nuclear groups".

Shellenberger's 'investigative piece' falsely claims4 that FOE keeps its donors secret, and in support of that falsehood he cites an article8 (written by Shellenberger) that doesn't even mention FOE. EP falsely claims that FOE has hundreds of millions of dollars in its bank and stock accounts.3

EP has an annual budget of US$1.5 million, Shellenberger claims, and he asks how EP "can possibly succeed against the anti-nuclear Goliath with 500 times the resources."8

An anti-nuclear Goliath with 500 times EP's budget of US$1.5 million, or US$750 million in annual expenditure on anti-nuclear campaigns? Shellenberger claims that Greenpeace has annual income of US$400 million to finance its work in 55 nations8 ‒ but he doesn't note that only a small fraction of that funding is directed to anti-nuclear campaigns. FOE's worldwide budget is US$12 million according to EP3 ‒ but only a small fraction is directed to anti-nuclear campaigns.


1. Christine Kim, 22 oct 2017, 'South Korea's president says will continue phasing out nuclear power',

2. Environmental Progress, 'South Korea',

3. Michael Shellenberger, Mark Nelson, Madi Czerwinski, Michael Light, John Lindberg, and Minshu Deng / Environmental Progress, Aug 2017, 'The High Cost of Fear: Understanding the Costs and Causes of South Korea's Proposed Nuclear Energy Phase-Out',

Direct download:

4. Michael Shellenberger, 16 Oct 2017, 'Enemies of the Earth: Unmasking the Dirty War Against Clean Energy in South Korea by Friends of the Earth (FOE) and Greenpeace',

5. Michael Shellenberger, 28 Aug 2017, 'High Cost of Fear in South Korea ‒ Investigating Nuclear Fear in Europe',

6. Michael Shellenberger / Environmental Progress, 19 Oct 2017, 'Victory! Pro-Nuclear Win in South Korea Gives Momentum to Atomic Humanists Everywhere',


8. Michael Shellenberger, 25 July 2017, 'Greenpeace's Dirty War on Clean Energy, Part I: South Korean Version',


10. 'Pandora's Promise Propaganda', Nuclear Monitor #764, 28 June 2013,

11. 'Pandora's Propaganda', Nuclear Monitor #773, 21 Nov 2013,

12. Japan Times, 10 May 2017, 'The pendulum swings in South Korea',

13. Nuclear Monitor #844, 25 May 2017, 'South Korea's 'nuclear mafia'',

14. Will Davis, 6 Feb 2014, 'South Korea nuclear power: Are the dark times over?',

15. Mycle Schneider, Antony Froggatt et al., 2016, World Nuclear Industry Status Report 2016, or direct download:

16. Choe Sang-Hun, 28 May 2013, 'South Korea Shuts 2 Reactors Over Faked Certificates',

17. Se Young Jang, 8 Oct 2015, 'The Repercussions of South Korea's Pro-Nuclear Energy Policy',

18. Choe Sang-hun, 3 Aug 2013, 'Scandal in South Korea Over Nuclear Revelations',

19. Korea Times, 25 June 2014, 'Fake certificates again',

20. Jane Chung / Reuters, 18 May 2017, 'S.Korea coal, nuclear power targeted for cuts by presidential candidates',

21. World Nuclear Association, Feb. 2017, 'Nuclear Power in South Korea',

22. 5 July 2017, 'South Korea Letter',

23. 6 Oct 2017, 'SK Citizen Jury Letter',

24. 1 June 2017, 'US-Korea Letter',

25. Yonhap News, 16 April 2017, 'S. Korea's nuclear power reactors not designed to deal with military attacks',

26. Nuclear Monitor #804, 28 May 2015, 'The myth of the peaceful atom',

27. Jim Green, 13 Sept 2017, 'Nuclear power, weapons and national security',

28. David Lowry, 26 July 2016, 'What Theresa May forgot: North Korea used British technology to build its nuclear bombs',

29. WHO, 13 April 2006, 'World Health Organization report explains the health impacts of the world's worst-ever civil nuclear accident',

30. Nuclear Monitor #785, 24 April 2014, 'The Chernobyl death toll',

31. Nuclear Monitor #820, 16 March 2016, 'TORCH: The other Chernobyl report',

32. WHO, 28 Feb 2013, 'Global report on Fukushima nuclear accident details health risks',

Full report: WHO, 2013, 'Health risk assessment from the nuclear accident after the 2011 Great East Japan Earthquake and Tsunami based on a preliminary dose estimation',

33. Ian Fairlie, 2 April 2014, 'New UNSCEAR Report on Fukushima: Collective Doses',

34. National Research Council of the U.S. National Academy of Sciences, Board on Radiation Research Effects, 2006, "Health Risks from Exposure to Low Levels of Ionizing Radiation (BEIR VII – Phase 2)", or

35. UNSCEAR, 2014, "Sources, Effects and Risks of Ionizing Radiation. UNSCEAR 2013 Report. Volume I. Report to the General Assembly Scientific Annex A: Levels and Effects of Radiation Exposure Due to the Nuclear Accident After the 2011 Great East-Japan Earthquake and Tsunami",

36. International Atomic Energy Agency, 2015, The Fukushima Daiichi Accident: Report by the Director General,

37. IAEA (Division of Nuclear Installation Safety and Department of Nuclear Safety and Security), 2011, 'Mission Report: The Great East Japan Earthquake Expert Mission. IAEA International Fact Finding Expert Mission of the Fukushima Dai-Ichi NPP Accident Following the Great East Japan Earthquake and Tsunami',


39. 12 July 2017, 'Chosun Biz Interview with Michael Shellenberger',



42. David Brenner et al., 2003, 'Cancer risks attributable to low doses of ionizing radiation: Assessing what we really know', Proceedings of the National Academy of Sciences, November 25, 2003, vol.100, no.24, pp.13761–13766,

43. UNSCEAR, 2011, 'Report of the United Nations Scientific Committee on the Effects of Ionising Radiation 2010',

44. For a critique of hormesis, see Appendix D in the BEIR report,

45. Michael Shellenberger, July 2017, 'Why the World Needs South Korea's Nuclear',

Trump administration rushing bailout for nuclear and coal

Nuclear Monitor Issue: 
Tim Judson ‒ Executive Director, Nuclear Information & Resource Service

Until last month, it wasn't clear whether US President Donald Trump intended to follow through on his promises to promote dirty energy. The signs had been bad since the early days of his campaign – from bellicose claims about "bringing coal back" and intending to pull out of the Global Climate Agreement, to cancelling the Clean Power Plan and opening up public lands to drilling and mining.

While these actions undermine climate progress, they would be relatively easy for the next president to reverse. Even more importantly, they would not be enough to counter the fundamental economic and technological trends that are starting to put coal and nuclear power out of business. Almost all nuclear reactors and coal plants are decades old, and more and more of them simply can't compete with newer, more efficient and cost-effective energy sources: fracked natural gas (which, unfortunately, is booming in the U.S.) and renewable energy sources like wind, solar, and energy efficiency (which are now growing more than any other sources of energy).

Reality boils down to this: keeping coal and nuclear plants from closing would require both giving those two energy sources a lot more money, and blocking their competitors. And that would take a radical change to the whole way energy is priced and regulated in the US and many other parts of the world.

As it turns out, that is exactly what Donald Trump is proposing to do ... and it's even more extreme than most people expected.

At the end of September, the US Department of Energy (DOE) took action, through a little-used power under the DOE Organization Act to order a little-known but powerful agency, the Federal Energy Regulatory Commission (FERC), to radically reorganize the country's energy markets to favor nuclear and coal. FERC regulates the interstate electricity and gas transmission systems and wholesale energy markets, as well as licensing hydropower facilities and other duties.

DOE's proposed bailout rule would cover four electricity markets in the Midwest and Northeast regions of the US, where electricity is priced and traded on wholesale markets; and it would apply to power plants that store 90 days of fuel on-site ‒ in practical terms, that means nuclear reactors and coal-fired power plants. Overall, this would apply to about 104 power plants, including 43 nuclear reactors at 28 sites ‒ nearly half of all operating reactors in the US.

Electricity prices for those plants would be set to cover their full operating and maintenance costs, plus a guaranteed rate of return (profit) on investment in the power plant. However, not only would this guarantee the profitability of nuclear and coal power plants, it would set in motion sweeping changes in the electricity market under the false claim that wholesale power markets, regulated by FERC, are underpricing coal and nuclear plants by failing to properly value their true contributions to grid reliability.

DOE also instructed FERC to fast-track the process to have the bailout in place by the end of the year ‒ which FERC has agreed to do. DOE's rationale for the program is not climate change, as nuclear promoters have stressed over the last few years. DOE argues that if coal and nuclear reactors continue to shut down, the power grid could fail. The move completes a 180-degree turnaround in how nuclear subsidies are being promoted, and weds nuclear to coal in Trump's dirty energy revival scheme. The nuclear industry's claims to "carbon free emissions" aren't a selling point with this administration, which is seemingly doing everything it can to increase greenhouse gas emissions.

So now the bailouts of nuclear and coal companies are all about "national security" and keeping the lights on. The DOE has been trying to cue up the bailout since April, when Energy Secretary Rick Perry ordered his staff to produce a "grid reliability" report showing that our national security is threatened by the closure of coal and nuclear power plants. Finally published in August, the report was a weak shadow of what Perry promised, failing to show that the electrical grid is threatened at all by power plant closures. Even with the biased conclusions the administration threw into it, the report found that wind and solar energy are strengthening the affordability, reliability, and resilience of the grid.

FERC would essentially "re-regulate" those coal and nuclear plants by ensuring they earn prices for their electricity that cover each reactor's or coal plant's operating costs, plus a significant margin of profit. That is typically set in the range of a 10% return on investment in the US utility sector. Since coal and nuclear make up about 50% of the country's electricity supply, the bailout would totally undermine "competitive" electricity markets ‒ leaving only natural gas plants to compete with renewables, for a possibly shrinking share of electricity sales due to energy efficiency.

When DOE Secretary Perry announced the grid reliability study in April, he said the federal government may need to limit renewable energy, even to the extent of overriding state-level renewable energy laws. That may be the practical outcome of the nuclear and coal bailout proposal ‒ even if it is not adopted in its present form. The natural gas industry is fighting the bailout right now, arguing that it undermines wholesale markets, but they may be able to strike a compromise with the Trump administration. Because of the specious legal rationale and technical justification for the nuclear and coal preferences, FERC could be forced to pass additional rules guaranteeing market preferences to natural gas plants, as well.

Alternatively, FERC could reject the proposal and, instead, promote market reforms based on protecting coal, nuclear, and natural gas for reliability purposes. Regulators of the regional energy markets have already been working on plans like this, essentially to balance protecting the interests of coal, nuclear, and natural gas corporations. The result would effectively be a new energy policy in the US, established through energy markets rather than by legislation, based on the outdated scheme of "baseload" power generation. That would severely limit the growth of renewable energy and make it impossible to reduce greenhouse gas emissions from power plants.

Pyroprocessing: the integral fast reactor waste fiasco

Nuclear Monitor Issue: 

In theory, integral fast reactors (IFRs) would gobble up nuclear waste and convert it into low-carbon electricity. In practice, the IFR R&D program in Idaho has left a legacy of troublesome waste. This saga is detailed in a recent article1 and a longer report2 by the Union of Concerned Scientists' senior scientist Ed Lyman.

Lyman notes that the IFR concept "has attracted numerous staunch advocates" but their "interest has been driven largely by idealized studies on paper and not by facts derived from actual experience."1 He discusses the IFR prototype built at Idaho ‒ the Experimental Breeder Reactor-II (EBR-II), which ceased operation in 1994 ‒ and subsequent efforts by the Department of Energy (DOE) to treat 26 metric tons of "sodium-bonded" metallic spent fuel from the EBR-II reactor with pyroprocessing, ostensibly to convert the waste to forms that would be safer for disposal in a geological repository. A secondary goal was to demonstrate the viability of pyroprocessing ‒ but the program has instead demonstrated the serious shortcomings of this technology.

Lyman writes:1

"Pyroprocessing is a form of spent fuel reprocessing that dissolves metal-based spent fuel in a molten salt bath (as distinguished from conventional reprocessing, which dissolves spent fuel in water-based acid solutions). Understandably, given all its problems, DOE has been reluctant to release public information on this program, which has largely operated under the radar since 2000.

"The FOIA [Freedom of Information Act] documents we obtained have revealed yet another DOE tale of vast sums of public money being wasted on an unproven technology that has fallen far short of the unrealistic projections that DOE used to sell the project to Congress, the state of Idaho and the public. However, it is not too late to pull the plug on this program, and potentially save taxpayers hundreds of millions of dollars. …

"Pyroprocessing was billed as a simpler, cheaper and more compact alternative to the conventional aqueous reprocessing plants that have been operated in France, the United Kingdom, Japan and other countries.

"Although DOE shut down the EBR-II in 1994 (the reactor part of the IFR program), it allowed work at the pyroprocessing facility to proceed. It justified this by asserting that the leftover spent fuel from the EBR-II could not be directly disposed of in the planned Yucca Mountain repository because of the potential safety issues associated with presence of metallic sodium in the spent fuel elements, which was used to "bond" the fuel to the metallic cladding that encased it. (Metallic sodium reacts violently with water and air.)

"Pyroprocessing would separate the sodium from other spent fuel constituents and neutralize it. DOE decided in 2000 to use pyroprocessing for the entire inventory of leftover EBR-II spent fuel – both "driver" and "blanket" fuel – even though it acknowledged that there were simpler methods to remove the sodium from the lightly irradiated blanket fuel, which constituted nearly 90% of the inventory.

"However, as the FOIA documents reveal in detail, the pyroprocessing technology simply has not worked well and has fallen far short of initial predictions. Although DOE initially claimed that the entire inventory would be processed by 2007, as of the end of Fiscal Year 2016, only about 15% of the roughly 26 metric tons of spent fuel had been processed. Over $210 million has been spent, at an average cost of over $60,000 per kilogram of fuel treated. At this rate, it will take until the end of the century to complete pyroprocessing of the entire inventory, at an additional cost of over $1 billion.

"But even that assumes, unrealistically, that the equipment will continue to be usable for this extended time period. Moreover, there is a significant fraction of spent fuel in storage that has degraded and may not be a candidate for pyroprocessing in any event. …

"What exactly is the pyroprocessing of this fuel accomplishing? Instead of making management and disposal of the spent fuel simpler and safer, it has created an even bigger mess. …

"[P]yroprocessing has taken one potentially difficult form of nuclear waste and converted it into multiple challenging forms of nuclear waste. DOE has spent hundreds of millions of dollars only to magnify, rather than simplify, the waste problem. This is especially outrageous in light of other FOIA documents that indicate that DOE never definitively concluded that the sodium-bonded spent fuel was unsafe to directly dispose of in the first place. But it insisted on pursuing pyroprocessing rather than conducting studies that might have shown it was unnecessary.

"Everyone with an interest in pyroprocessing should reassess their views given the real-world problems experienced in implementing the technology over the last 20 years at INL. They should also note that the variant of the process being used to treat the EBR-II spent fuel is less complex than the process that would be needed to extract plutonium and other actinides to produce fresh fuel for fast reactors. In other words, the technology is a long way from being demonstrated as a practical approach for electricity production."


1. Ed Lyman / Union of Concerned Scientists, 12 Aug 2017, 'The Pyroprocessing Files',

2. Edwin Lyman, 2017, 'External Assessment of the U.S. Sodium-Bonded Spent Fuel Treatment Program',

Update on the Toshiba / Westinghouse crisis

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

(Please subscribe to Nuclear Monitor at

The Toshiba / Westinghouse crisis continues to drag on without any clear resolution in sight. As things stand:

  • Toshiba will probably survive in a much-weakened form, assuming it can sell profitable assets to cover debts.
  • Profitable parts of Toshiba's US-based nuclear subsidiary Westinghouse will survive in one form or another after a restructuring plan has been developed and approved by the bankruptcy court. Westinghouse might survive in a weakened form or it might be carved up for sale and no longer be a recognizable entity.
  • Toshiba would like to sell its entire 90% stake in Westinghouse but that may not be possible.
  • Toshiba and Westinghouse will no longer take on reactor construction projects in their home countries or abroad.
  • Much of the discussion about the four partially-built AP1000 reactors in the US assumes that one way or another the reactors will be completed. The four reactors ‒ two in Georgia and two in South Carolina ‒ are largely responsible for the crisis facing Toshiba and Westinghouse due to cost overruns of around US$13 billion. But to push ahead would entail enormous risk and it would be no surprise if the owners of the nuclear plants decided to cancel one or both of the reactors at each plant.
  • Toshiba / Westinghouse and the NuGen consortium have yet to acknowledge that the plan for three AP1000 at Moorside in the UK is dead ... but it is dead.
  • The likelihood that the plan to build AP1000 reactors in India will proceed is vanishingly small.


Toshiba hopes to submit audited financial figures for the 2016/17 fiscal year, which ended 31 March 2017, by August 10.1 Toshiba and its auditor PwC Aarata are still working to reach agreement on the figures and to resolve their disagreement as to whether Toshiba should correct past financial reports.2

On June 23, Toshiba said it expects to report a negative net worth as of 31 March 2017 of ¥581.6 billion (US$5.18 billion), a 7.7% increase on earlier estimates.3 The company's estimated net loss for the 2016/17 fiscal year has also increased, to ¥995 billion (US$8.87 billion).3

Also on June 23, the Tokyo Stock Exchange (TSE) announced that from 1 August 2017, Toshiba shares will be demoted from the exchange's first section to its second tier.2,3 The TSE is also reviewing Toshiba's internal control systems to decide whether to remove the company from the exchange's designation as a "security on alert."2

Toshiba is trying to sell its prize asset, its memory chip business, to stave off bankruptcy and to avoid being delisted altogether from the TSE. But negotiations over the sale of the memory chip business have become complicated, as reported by Nikkei Asian Review:3

"Massive losses from its U.S. nuclear unit plunged the once-mighty Toshiba into negative net worth in fiscal 2016. The company is now desperately trying to raise enough funds to save itself from remaining in negative net worth for a second year ‒ a scenario that would see the company face delisting from the TSE. On Wednesday [June 21], it decided to prioritize negotiations with a Japanese government-led alliance for the sale of its flash memory unit.

"Any conclusion to the deal, however, faces obstacles. Bain Capital, the private equity firm in the alliance, is collaborating with South Korean chipmaker SK Hynix, making a protracted examination into antitrust matters a possibility.

"In addition, Toshiba chipmaking partner Western Digital has sought an injunction against the sale in a California court. With the U.S.-based company weary of the involvement of direct rival SK Hynix, the government-led alliance will have to negotiate with Western Digital, either by asking it to drop the case or trying to include it in the consortium.

"The formation of the alliance was mostly orchestrated by Japan's Ministry of Economy, Trade and Industry, which wants to keep Toshiba's sensitive chip technologies under domestic control."

Some bankers and potential investors are reportedly pressing the Toshiba board to consider alternatives to the sale of its memory chip business. But selling other assets is problematic as Toshiba has few of sufficient value, and a piecemeal sell-off could take too long.4 Toshiba will be automatically delisted from the TSE if it cannot drag itself out of its negative shareholder equity position by the end of the current fiscal year, ending 31 March 2018.5

In mid-June, Toshiba said it is being jointly sued by 70 shareholders, foreign institutional investors, and individuals seeking damages of ¥43.9 billion (US$391 million) related to a US$1.3 billion profit-padding scandal from 2008‒2014. Separately, Toshiba has been sued by 26 groups and individuals over the scandal with total damages of ¥108.4 billion (US$960 million) being sought.6

There was a moment's respite for Toshiba in early June when its share price rose, partly due to an agreement to cap Toshiba's liabilities for the AP1000 reactor project in Georgia at US$3.68 billion.7 But Toshiba lost all those gains and more and its stock price fell to half what it was before the problems with the US AP1000 projects came to light last December.8


According to a July 3 Reuters report, citing industry and diplomatic sources, the US administration has said that Westinghouse will emerge from Chapter 11 bankruptcy and be sold to a US investor by the end of the year.9

But of course the government can't force investors to buy a bankrupt company. Toshiba has previously tried to sell Westinghouse, without success, and has openly flagged its ongoing desire to rid itself of Westinghouse. But the process is on hold until Westinghouse emerges from Chapter 11 bankruptcy proceedings with a court-approved restructuring plan.9

According to Reuters: "Some form of U.S. backing or involvement, industry experts say, could avoid a Chinese or Russian buyer unpalatable to Washington, which would prefer to keep Westinghouse's advanced nuclear technology out of the hands of its foreign rivals."9

In court records filed on June 5, the US Committee on Foreign Investments in the United States said that the sale of Westinghouse or its assets could be subject to the panel's review. Consisting of various cabinet members, the Committee is authorized to review transactions which could result in foreign persons or entities acquiring US businesses.10

In May, Westinghouse was in trouble with the US Nuclear Regulatory Commission (NRC) because of problems at its nuclear fuel plant in Columbia, South Carolina.11 After finding an accumulation of uranium in an air pollution control device last year, in May the NRC cited one additional violation related to the same piece of equipment. In June 2017, the NRC issued a notice of non-conformance to Westinghouse over lax quality assurance at its Mangiarotti subsidiary in Italy.12 The problem concerns incorrect use of material for AP1000 passive residual heat removal heat exchanger stiffener plates, identified in an earlier inspection. As with the problem at Columbia, Westinghouse has been slow to act. NRC inspections were carried out at Mangiarotti's plant in Italy in July 2016. Follow-up inspections were carried out at Westinghouse's plant in Rockville, Maryland in April 2017. The NRC concluded that Westinghouse "had not taken prompt corrective action or identified the cause of a significant condition adverse to quality", which involved the use of a different type of stainless steel in the manufacture of the component from that required.12

It has emerged that Toshiba didn't know that Westinghouse was preparing for a bankruptcy filing even after Westinghouse had hired lawyers for the task late last year, according to court records and Toshiba's official timeline. The Wall Street Journal commented: "If Toshiba's timeline is accurate, it suggests poor communication between parent and subsidiary contributed to letting the problems at Westinghouse get out of hand. Toshiba, one of Japan's biggest and oldest conglomerates, has said it has doubts whether it is a going concern because of its unit's bankruptcy. Conversely, if Toshiba did know about the unit's bankruptcy plans ahead of time but failed to disclose them promptly, it could worsen trust among investors at a time when stock-exchange officials in Tokyo are weighing whether to delist Toshiba shares."13

AP1000 reactors under construction in the US

Decisions about the fate of the partially-built AP1000 reactors in Georgia and South Carolina keep being deferred. Westinghouse is expected to break its contracts with the owners of the Vogtle (Georgia) and Summer (South Carolina) plants. Meanwhile the plant owners are weighing up their options regarding the future of the reactors, and paying for work to continue in the meantime. The owners of the South Carolina plant hope to make a decision on the fate of the two AP1000 reactors by August 10.14 And Southern Co. hopes to make a decision about the two reactors in Georgia "sometime in August" according to CEO Tom Fanning.15 But no previous deadlines have been met and the issue is likely to drag on for months.

Georgia Power and Westinghouse have finalized an agreement which allows for the transition of project management at the Vogtle plant from Westinghouse to Southern Nuclear and Georgia Power. Under the agreement, finalized on June 9, Toshiba will meet its contractual obligations by paying Southern Co. US$3.68 billion from October 2017 to January 2021 to help cover the costs of completing the two reactors, while Southern Co. agreed not to ask for more, even if the project continues to run over budget.16 The agreement has been approved by the US Department of Energy, which has a stake in the outcome of the negotiations because it approved a US$8.3 billion loan guarantee for the Vogtle project.

Toshiba may strike a similar agreement with SCANA and Santee Cooper in relation to the two AP1000 reactors under construction in South Carolina. SCANA and Santee Cooper would take responsibility for completing (or abandoning) the reactors, and Toshiba would make a payment to settle contractual obligations.17

On May 15, Toshiba said it had set aside ¥670 billion (US6.0 billion) to cover parent company guarantees for the Vogtle and Summer plants. Thus a payment of US2.3 billion for the South Carolina plant can be expected in addition to the US3.68 allocated for Georgia.

Another modest win for those hoping to complete the reactor projects in Georgia and South Carolina came on June 15 when the House of Representatives approved a bill on tax credits that could amount to around US$2 billion in subsidies for each of the nuclear plants ‒ Vogtle and Summer.18 However the future of the bill in the Senate is uncertain. The owners of the nuclear plants need the tax-credit subsidies locked in, and soon.

Despite the Toshiba agreement with the Vogtle owners, and the House of Representatives' vote on tax credits, the future of the Vogtle and Summer reactors is still very much in doubt.

Construction of the four reactors is less than half complete so there is ample scope for further delays and cost overruns. A report by consultants to the Georgia Public Service Commission found that attempts to improve efficiency have had little success: over the past year, four core activities at the Vogtle plant fell an average of 325 days further behind schedule.19

A recent document written by South Carolina state regulators states: "The projection of

time and costs is made more difficult given the incredible variances in time and costs

actually incurred in comparison to Westinghouse's previous quotes and projections of time

and costs."14

Owners of the nuclear plants are doing their best to estimate the likely costs to complete the four reactors ‒ but it is a guessing game. Analysts at Morgan Stanley say future costs could exceed current estimates by as much as US$8.5 billion, more than double what shareholders of the two companies are effectively pricing in.20

The Southern Alliance for Clean Energy (SACE) estimates that the total cost of the two reactors in Georgia could reach US$29 billion.19 SACE based its estimate on a June 2017 report by two utility consultants to the Georgia Public Service Commission. The consultants' report is based on a scenario in which the project comes online in 2022, and Westinghouse's bankruptcy adds further costs.19

A Morgan Stanley report in March 2017 said the final cost of the two Summer reactors could be as high as US$22.9 billion ‒ double the original estimate.18

Using the SACE figure for Georgia, and the Morgan Stanley figure for South Carolina, the total cost for the four reactors could be US$51.9 billion, more than double the original estimate of US$23.9 billion (US$14.1 billion for Vogtle and US$9.8 billion for Summer).

Nuclear corporations and lobby groups argue that completion of the Vogtle and Summer reactors is a "national security issue" and a "strategic national imperative". Typically, those meaningless assertions are backed up with the meaningless justification that the US will be "left behind" by other countries such as Russia and China if it exits the global nuclear industry. The Nuclear Energy Institute has gone one step further. The industry lobby group has been circulating a document in Washington arguing the case for tax credits to support nuclear power projects. The document states that if the Vogtle and Summer plants aren't completed, it would stunt development of the nation's nuclear weapons complex because the engineering expertise on the energy side helps the weapons side.21

A further complication for the owners of the South Carolina plant is that they learnt in June, much to their astonishment, that Westinghouse's detailed construction schedule for the two reactors is non-existent.18 "I'm just floored that they haven't been able to produce a schedule for their own project," said Tom Clements from Savannah River Site Watch. "That violates a basic tenet of sound construction management, and I think it reveals that there are more problems to be encountered if the project continues."18

Friends of the Earth and the Sierra Club filed a complaint with South Carolina state regulators on June 22, calling for a hearing on whether construction should be allowed to move forward at the Summer plant and whether the utilities should be forced to pay back money customers have already spent through higher rates to build the reactors.18 The South Carolina Public Service Commission approved the groups' request and a hearing is scheduled for August 14 in Columbia.18

The groups call on the Summer plant owners to "cease and desist from expending any further capital costs related to the Project" and referred to "unreasonable electric rates" ‒ in particular, nine electricity rate hikes since 2008 to help fund the Summer project.17

Dr Mark Cooper from the Institute for Energy and the Environment at Vermont Law School has written a detailed paper for Friends of the Earth and the Sierra Club in support of their complaint to the South Carolina Public Service Commission.22 Cooper argues:

"Management will waste more money going forward in a futile attempt to complete the project ... Future costs may be twice as much as the costs that have been sunk. This report outlines five steps that can be taken to soften the negative blow to both SCE&G ratepayers and the economy of South Carolina:

  • Stop wasting money by abandoning the project.
  • Claw back improperly expended sunk costs through reclamation under the bankruptcy laws and reparation for imprudent costs improperly incurred.
  • Return to traditional least-cost, used and useful principles for utility resource acquisition.
  • Rely on lower cost, cleaner resources, like efficiency, renewables and dynamic system management to meet any growth in demand or reduction in emission of pollutants.
  • Mitigate the bill impact by enhancing ratepayer ability to lower their electricity costs with on-bill financing of efficiency, reducing the profit paid on wasted capital expenses, and extending the period for cost recovery."

Cooper argues that "even under the unjustifiably optimistic projection of no future delays and cost overruns, ratepayers will be better off if the utility abandons the project, even if ratepayers are forced to bear the costs that have been sunk to date." In the best-case scenario, swift action by the Public Service Commission could save ratepayers as much as US$10 billion.

Planned AP1000 reactors in the UK

Numerous media reports over the past six weeks have flagged the possibility that South Korea's Kepco could buy into the NuGen consortium that planned to build three AP1000 reactors at Moorside in the UK. Toshiba would be more than happy to sell most or all of its stake in NuGen to Kepco ‒ or anyone else. But Kepco wants to build its own APR1400 reactors instead of Westinghouse AP1000s. That brings with it another set of problems ‒ financing, the anti-nuclear stance of recently-elected South Korean President Moon Jae-in, and the several years it would take for the APR1400 reactor design to go through a generic design assessment process in the UK. Suffice it here to note that previous plans to build AP1000 reactors at Moorside appear to be stone cold dead.

Planned AP1000 reactors in India

Indian Prime Minister Narendra Modi and US President Donald Trump issued a communique after their meeting in Washington in late June. The two leaders "looked forward to conclusion of contractual agreements between Westinghouse Electric Company and the Nuclear Power Corporation of India for six nuclear reactors in India and also related project financing," the communique said.23

However there is very little likelihood of contractual agreements, no clarity about financing, no obvious reason why India would pay for Westinghouse reactors when cheaper options are available to meet energy needs, no obvious reason why India would sign up for AP1000 reactors given the massive cost overruns in the US, and an unresolved disagreement about India's nuclear liability law.

Another obstacle is that Westinghouse ‒ assuming that Westinghouse even exists after the bankruptcy process ‒ is exiting the reactor construction business. The Hindu reported: "Westinghouse is working out a new model with its lenders under which they will design the reactor and provide consultations, but Indian companies would be entrusted with the actual construction of the plant. A process is underway to ascertain who will do what in the new business model and which Indian companies could be involved."24


1. Reuters, 13 July 2017, 'Toshiba: Not true auditor told co it can't form opinion on annual report',

2. Nikkei Asian Review, 24 June 2017, 'Toshiba teeters on brink of delisting',

3. Shotaro Tani / Nikkei Asian Review, 23 June 2017, 'Toshiba's negative net worth widens to 5.2 billion dollars',

4. 10 July 2017, 'Toshiba need alternative plan quick',

5. 23 June 2017, 'Toshiba asks regulators for extension on annual statement deadline to Aug. 10',

6. Kathleen Wirth, 13 June 2017, 'Toshiba Being Sued for $399 Million for Accounting Irregularities',

7. Peter Wells, 12 June 2017, 'Toshiba jumps 8% after deal to cap US reactor liability',

9. Reuters, 3 July 2017, 'Indo-US nuclear deal: Westinghouse could be sold by Dec, ending bankruptcy, says report',

10. Michael Smith, 7 June 2017, 'Washington weighs in on Westinghouse bankruptcy', of Form

11. Sammy Fretwell, 8 May 2017, 'Nuclear-safety concerns linger at Westinghouse plant',

12. World Nuclear News, 21 June 2017, 'Westinghouse subsidiary receives notice of non-conformance',

13. Kosaku Narioka, 8 June 2017, 'Toshiba Unaware Its Nuclear Unit Was Preparing for Bankruptcy, Timeline Shows', Wall Street Journal,


15. Nikkei Asian Review, 13 July 2017, 'US utility to decide fate of Westinghouse reactors in August',

16. World Nuclear News, 12 June 2017, 'Vogtle agreement caps Toshiba obligation',

17. Michael Smith, 23 June 2017, 'Toshiba seeks SCANA, Santee Cooper takeover of V.C. Summer',

18. David Wren, 24 June 2017, 'Missing documentation throws Santee Cooper, SCE&G nuclear project timeline, costs in doubt',

19. Tom Hals, 15 June 2017, 'Group says Georgia nuclear plant costs rise to $29 billion',

20. Lauren Silva Laughlin, 28 March 2017, 'Nuclear waste',

21. Amy Harder, 16 June 2017, 'Nuclear scramble on tax credits',

22. Mark Cooper, July 2017, 'The Failure of the Nuclear Gamble in South Carolina',

23. Reuters, 3 July 2017, 'Indo-US nuclear deal: Westinghouse could be sold by Dec, ending bankruptcy, says report',

24. Vikas Dhoot, 28 June 2017, 'Westinghouse's $20 billion nuclear deal needs a reboot',

Will the AP1000 reactors under construction in Georgia be completed?

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

(Please subscribe to Nuclear Monitor at

Only three power reactors have been connected to the grid in the US in the past 25 years, and no power reactor in the US has both begun construction and been completed since the Three Mile Island accident in 1979.1 With the cancellation of the V.C. Summer project in South Carolina, only two reactors are under construction in the US: the AP1000 reactors at the Vogtle plant in Georgia. Will the Vogtle project break the streak of no reactors being ordered, built and completed since Three Mile Island? Or will the project be cancelled ‒ in which case there will be a grand total of zero reactors under construction in the US?

A decision will probably be announced by the end of the month by the project owners, then the Georgia Public Service Commission will have to decide whether or not to accept their proposal ‒ a process that could take several months.2

Comments by Southern CEO Tom Fanning on August 2 suggested that he is leaning towards recommending that construction keep going.3 Fanning said the company had costed the option of building one of the Vogtle reactors and a gas-fired plant at the same site, but preferred to either keep or abandon the nuclear project as a whole.4 "We would need to build a rather lengthy [gas] pipeline, and maybe other sites around Georgia are maybe more suitable for that," Fanning said.4

In some respects, the Vogtle project in Georgia has better prospects than the abandoned V.C. Summer project in South Carolina:

  • Energy demand is growing more rapidly in Georgia.5
  • The Vogtle project is closer to completion than V.C. Summer. According to the Augusta Chronicle, the Vogtle project is 66% complete overall, with almost all of the engineering and most of the procurement done, and construction 44% complete.6 The current timeline for completion of the reactors is between Feb. 2021 and March 2022 for Vogtle #3 and between Feb. 2022 and March 2023 for Vogtle #4.7
  • Toshiba's settlement payment for the Georgia AP1000 project is US3.68 billion, well above the US$2.2 billion to be paid to the South Carolina utilities.
  • The rate impact is spread across a bigger customer base ‒ Georgia Power has about three times more customers than SCE&G.7

But there are important similarities between the South Carolina and Georgia projects. Westinghouse is exiting from both projects. Both projects are long-delayed and billions over-budget. Ratepayers in both states are sick of paying in advance for the AP1000 reactors that may never be completed ‒ Georgia Power had collected almost US$1.2 billion from ratepayers by the end of 2016 to pay for Vogtle.8

Another vulnerability for the Vogtle project is that it has more owners ‒ Georgia Power (45.7%), Oglethorpe Power Corp. (30%), the Municipal Electric Authority of Georgia (22.7%) and Dalton Utilities (1.6%) ‒ and the project might collapse if just one of the owners calls for its termination.9 Georgia Public Service Commissioner Stan Wise said: "I would question whether the commission would have the appetite to go forward without a unanimous decision from the owners."9

In 2008, the cost estimate for the two Vogtle reactors was US$14 billion. Southern Co. said on August 2 that its current estimate is a total cost of at least US$25 billion.3,10

Georgia Power estimates net additional capital costs of US$1.0-1.7 billion to complete the two AP1000s under construction at Vogtle.7 Costs for other owners ‒ who own slightly over 50% of the project ‒ would presumably be slightly larger.

Of course, that US$25 billion figure could prove to be an underestimate, as with all previous estimates. The Southern Alliance for Clean Energy (SACE) estimates that the cost could reach US$29 billion.11 SACE based its estimate on a June 2017 report by two utility consultants to the Georgia Public Service Commission. The consultants' report is based on a scenario in which the project comes online in 2022, and Westinghouse's bankruptcy adds further costs.

Will Vogtle go ahead? "It might be a close call," said Kit Konolige, a New York-based utility analyst for Bloomberg Intelligence. "The biggest issue is, what's your level of confidence that if you do go ahead, it's going to be done on time and on budget."10

Few people on the outside looking in have much confidence that Vogtle could be completed without significant additional cost overruns and delays. But there is more confidence among the Vogtle project partners and state 'regulators' that the project can be completed.

Southern Co. recently noted that the project has fallen further behind schedule since Westinghouse filed for bankruptcy protection in March 2017.3

Matt Kempner commented in the Atlanta Journal-Constitution:12

"Continuing to fund the only remaining nuclear power plant under construction in the U.S. relies largely on decision-makers convincing themselves that the companies can accurately revise cost and schedule estimates for Plant Vogtle's expansion. It's a dicey proposition. Accuracy hasn't been a strong suit of the power giants in recent years.

"Southern is one of the biggest power companies in the country and the parent of Georgia Power. It has embarked on exactly two mega construction projects in the last decade or so. Both ‒ the expansion of Plant Vogtle and the Kemper clean coal/gas plant in Mississippi ‒ have gone billions of dollars over budget and faced years of delays. As each project struggled, Southern and its subsidiaries continued to underestimate the magnitude of the overruns. Independent monitors for the Georgia Public Service Commission regularly warned about rising Vogtle costs that were more accurate than Georgia Power's reassurances about stability."

Georgia Power estimates it would cost it a total of US$6.3 billion to cancel the project, comprising its share of expenditure on the project to date; financing costs; and other costs connected with cancellation, including terminating contracts for construction and other services, and securing the construction site.7



2. Russell Gold, 2 Aug 2017, 'US nuclear revival hopes dim as utilities ditch reactors',

3. Russell Grantham, 2 Aug 2017, 'Southern Co. says Vogtle costs to exceed $25B',

4. Megan Geuss, 4 Aug 2017, 'Vogtle, Summer nuclear plants face bleak outlook after Westinghouse bankruptcy',

5. Tom Buerkle, 31 July 2017, 'Power down',

6. Tom Corwin, 2 Aug 2017, 'Company update predicts longer start date for Vogtle reactors', Augusta Chronicle,

7. World Nuclear News, 3 Aug 2017, 'Georgia Power expects late August decision on Vogtle',

8. Russell Grantham and Johnny Edwards, 19 May 2017, 'Plant Vogtle: Georgia's nuclear ‘renaissance' now a financial quagmire',

9. Kristi E. Swartz, 1 Aug 2017, 'Death of Scana's V.C. Summer project puts industry on notice',

10. Mark Chediak and Jim Polson, 2 Aug 2017, 'Even at $25 Billion, Southern Sees Value in Finishing Nukes',

11. Tom Hals, 15 June 2017, 'Group says Georgia nuclear plant costs rise to $29 billion',

12. Matt Kempner, 3 Aug 2017, 'Kempner: Georgia's nuclear crisis of confidence',

A stay of execution for the South Carolina AP1000 reactor project

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

(Please subscribe to Nuclear Monitor at

The two partially-built AP1000 reactors at the VC Summer plant in South Carolina may be resurrected ‒ but it is a long shot. On August 15, South Carolina Electric & Gas Co. (SCE&G) ‒ 55% owner of the project ‒ announced that it had voluntarily withdrawn its petition to the South Carolina Public Service Commission to abandon the two reactors, a fortnight after saying it would discontinue work on the project and lodging the abandonment petition.1

Kevin Marsh, CEO of SCE&G parent company SCANA Corp., said SCANA has "not changed our position on abandonment" and that the withdrawal of the petition is seen as temporary and that it will be refiled "at an appropriate time" once reviews of the project by legislators are complete.2 That may be after state legislators complete their Jan.‒ May 2018 sitting session, by which time they will also have completed reviews of the VC Summer project failures.3

SCE&G said it might not complete the reactors even if a new power company is willing to partner on the project.4 The company previously said it would have been willing to proceed with one of the two reactors if not for the decision of state-owned Santee Cooper ‒ 45% owner of the project ‒ to abandon both. But Marsh told state legislators on August 10: "I've got to be convinced that building the one-plant option ‒ even with a new partner ‒ would be in the best interest of our customer."4 He also said it would take at least a year to restart the project, even if a new partner emerged.

Marsh said the project could only move forward with a willing and capable partner, a new ownership agreement, a suitable agreement with a capable construction firm, some certainty about the project being able to qualify for a federal government tax credit (effectively a subsidy of about US$2 billion), and a new agreement with Westinghouse for design engineering services since "the plant is their design."5 The new partner would need to stump up US$3 billion.6

A federal government handout would also be required to revive the VC Summer project. Marsh noted that before abandoning the project, he went to the Department of Energy seeking a grant, but the agency responded with an offer of a loan. "Loans are nice, but they don't reduce the cost of the project. What we were trying to do was minimize the cost of the project," he said.3 SCANA sought a non-repayable grant of US$1‒3 billion.7

Marsh said the federal government would also need to guarantee that ratepayers wouldn't foot the bill for a project with an uncertain price tag. "We would need to protect customers from that risk, and that would be an absolute we would have to have from a cost perspective," he said at an August 1 public hearing with state regulators.8

So SCANA wants a US$1‒3 billion direct handout, a US$2 billion indirect handout in the form of tax credits, and also a blank check covering future cost overruns! No wonder the Trump administration has been silent on a nuclear project it once called 'massively important'.8

Reviving the project would also depend on the Base Load Review Act, which state legislators seem intent on revising or repealing, Marsh said.9 The Act allowed project partners to charge ratepayers for construction of the reactors during the construction period, and also gives them the right to pursue sunk costs from ratepayers.

State Governor Henry McMaster said that he was looking for a utility to buy Santee Cooper's share of the VC Summer project‒ or even to buy Santee Cooper outright ‒ if it meant one reactor would be completed. McMaster said his office was reaching out to some of the South's largest power companies ‒ including Dominion Energy in Virginia, Duke Energy in North Carolina and the Southern Co. of Georgia ‒ to see if they were interested in all or part of the state-owned utility.4 McMaster said he has heard from a "number of entities that have expressed an interest in purchasing Santee Cooper, in whole or in part, or have inquired regarding Santee Cooper's ownership interest" in the plant.10

At an August 22 meeting of South Carolina Senate's VC Summer Nuclear Project Review Committee, Santee Cooper representatives said they were aware of "very preliminary" discussions involving the Governor about the possible sale of the utility.6 Asked what would become of Santee Cooper's almost US$8 billion of debts ‒ US$4 billion for the nuclear plant ‒ Santee Cooper's chair Leighton Lord said: "It would stay with the state of South Carolina. I don't think any investor utility would want to acquire $4 billion in [nuclear] debt."6

So reviving the project would require a US$1‒3 billion direct handout, an indirect US$2 billion tax-credit handout and a blank check from the federal government, a US$4‒8 billion bailout from the state government, maintaining the Base Load Review Act which allows the project partners to continue to gouge ratepayers, a new project partner with US$3 billion to spare ... and much more besides. So much for nuclear power being too cheap to meter.

Estimates of the amount already spent on the VC Summer project range from US$9 billion to US$10.4 billion.11 The estimated cost to complete the project, from start to finish, is around US$25 billion including interest, according to Santee Cooper's Lonnie Carter (almost US$18 billion excluding interest).6

SCANA's Kevin Marsh said: "The governor has stated that he's looking for another partner to possibly come into the plant, but if someone says they're interested, that's not something that will happen overnight," Marsh said. "There are a lot of bridges that have to be crossed before we would get there."4 SCANA had looked unsuccessfully for a new partner before giving up on construction on July 31.12

Santee Cooper said it had heard from two utilities interested in buying its 45% share of the VC Summer project, after contacting "about 50 utilities and other entities in the Southeast who could enter into power purchase agreements dozens of power companies."13 But Lonnie Carter, the utility's chief executive, said neither company has the assets to undertake a multi-billion-dollar construction project.14 Santee Cooper has set a September 15 deadline for serious expressions of interest.15

Corso Capital Management analyst David Frank said that abandoning the project was the likely outcome: "I'm not quite sure how anyone after any comprehensive review could come to any other decision ‒ I mean, even if you had someone with half a brain ‒ to spend the amount of money with all of the risks and potential risks that are still ahead. All these people, I'm sure they are very upset, it's very emotional, but I'd be curious to really hear someone make a solid argument for going ahead and taking on all that risk."3

Dukes Scott, executive director of the South Carolina Office of Regulatory Staff, said it would take something close to a miracle to revive the project.6

Blame game

Just about everyone involved in the VC Summer fiasco failed to meet expectations by a wide margin ‒ state legislators and regulators, the project owners, the lead contractor Westinghouse and a number of other contractors and sub-contractors. Legislators are trying to shift blame to the project owners, who are trying to shift blame to Westinghouse.

The South Carolina House and Senate have initiated separate inquiries, both of which are providing plenty of theatre. Commenting on the failure to establish a credible work schedule or cost estimates before the project began, Republican Rep. Kirkman Finlay told the House inquiry on August 23: "We embarked on a multi-year, multi-billion project with a road map that we didn't really believe was going to get us to the destination. Help me understand how we could have planned it less thoroughly."16 Republican Sean Bennett, a member of the Senate inquiry, told a community meeting that "the good news is, there is no good news".17

Many of the legislators investigating the VC Summer fiasco are themselves partly responsible for it. South Carolina resident Joe Cali said: "This is like asking the foxes to investigate the depredations at the hen-house."17

Republican state Senator Shane Massey said at an August 22 hearing into the fiasco: "We went a number of years with Westinghouse just screwing you over and you let it happen. We can sit here and we can blame Westinghouse all day. At some point, y'all, we can't pass the buck anymore."18

Santee Cooper chair Leighton Lord blamed state and federal politicians ... and Westinghouse: "Without the state Base Load Review Act, the project would have never started. Without the Congress providing single-application licensing, and production tax credits for new nuclear construction, the project would have never happened. ... [W]e would have completed the new units if Westinghouse had lived up to its contract to complete the project for an agreed fixed price. Westinghouse failed to do what it promised it could do."19

Cindi Ross Scoppe, a columnist with The State newspaper, highlighted the absurdities of the Base Load Review Act:20

"You're a private-sector, regulated utility, so your job is not to protect ratepayers. They're stuck with you, and besides, it's the government's job to look out for them. Your job is to protect your stockholders. And you're doing that. Magnificently. That's why you and your executive team keep getting those huge bonuses.

"There's this law, the Base Load Review Act, that your team convinced the Legislature to pass in 2007. It says your stockholders won't suffer the consequences of your decisions, no matter how much you go over budget. In fact, the more you spend, the more they profit, because they're guaranteed a 10.25 percent return on investment. So you have no incentive to keep costs down. Just the opposite.

"You have no incentive to get out unless things get so bad that it would be "imprudent" ‒ an important legal term that can yank that profit out of your fingers ‒ to continue. Like, say, if your prime contractor goes belly up. And your 45 percent partner bails on you. Until that happens, invest more, profit more.

"When you add this bizarre economic incentive to the natural human inclination toward inertia, it's almost impossible not to keep sending money on the project. More than you should. Longer than you should. That situation is not SCANA's fault, at least not mostly. It's the fault of our Legislature, which created that disincentive to keep costs down. Or pull the plug."

In a blistering attack that's worth reading in full, Republican state Senator Chip Campsen blamed state legislators for passing the Base Load Review Act.21 He says that as a freshman senator he voted against the Act in 2007 but it was approved by a vote of 21 to 1.

Campsen writes:21

"This shifting of risk to customers, when coupled with guaranteed returns up to 11 percent on construction costs, created a perverse incentive to spend big dollars building risky plants. The more utilities spend, the more money they make. Customers underwrite it all, even if a project fails.

"How did such a bill ever pass the General Assembly? The principle of concentrated benefits and diffuse or abstruse costs. When the benefits of a bill are significant and concentrated in a few, beneficiaries lobby the General Assembly assiduously for its passage. When costs are diffuse, abstruse, or both, no one is motivated to lobby against it. Members sense a lot of support and no opposition. The bill typically passes.

"In this case utility lobbyists descended upon the General Assembly like the plague of locusts in Exodus 10. And what of the opposition? Instead of locusts, it was crickets chirping. Opposition was essentially nonexistent."

Cheryl Rofer, who runs the 'Nuclear Diner' blog, blames everyone in a sarcastic post:22

"So congratulations to:

The contractors who cannot build nuclear plants on time and within budget. Special mention for lowballing their bids and failing to meet quality control requirements.

The utilities that cannot contract or manage the building of nuclear plants.

The financiers who have botched their judgments of the projects.

Proponents of nuclear power. The strategy of competitive parading of one's knowledge, parochial defense of a single system against all others, and unthinking opposition to wind and solar have been tremendous public relations successes.

Opponents of nuclear power. Spreading incorrect information and confusion instead of clearly delineating actual problems with nuclear power has made the public dumber.

Reporters who can't be bothered to learn middle-school science.

The schools that didn't teach it.

The Department of Energy and its predecessors. From a major misjudgment by a Rickover protégé through continuing confusion as to its role relative to the national laboratories and wildly varying support for nuclear energy, these agencies at best have been a neutral influence on commercializing nuclear energy.

Congress. Ever-increasing micromanagement of budgets, bending to lobbyists without a clear plan, and, since the mid-1990s, continuing resolutions rather than thought-out budgets make long-range plans impossible.

The national laboratories. Replacing their role as national resources for nuclear issues with a university model of individual investigators, but with more fighting over resources and overhead has diluted what they can contribute to the development of nuclear power.

Particular thanks to those who have assembled studies showing their favorite type of energy to be the most economically favored.

Good job, all! Your participation trophies are in the mail."

Environmentalists and nuclear opponents

The weirdest part of the blame game is the mud being thrown at environmentalists. Environmentalists aren't to blame for the VC Summer fiasco. As Houston Chronicle business columnist Chris Tomlinson noted: "Let it be written that environmentalists didn't kill the nuclear power industry, economics did. South Carolina Electric and Gas Co. and partner Santee Cooper abandoned work on two new nuclear reactors ... not because of public protests, but because the only way to pay for them was to overcharge customers or bankrupt both companies."23

Nonetheless, attempts are being made to blame environmentalists and nuclear opponents more broadly. James H. Holloway Jr., an accountant whose clients have included nuclear utilities and companies, runs this curious argument:24

1. Historically, environmentalists and other nuclear opponents forced costly delays to reactor construction, stopping some and driving up the cost of others.

2. As the nuclear renaissance took hold, power companies had to eliminate the risk of opponents forcing costly delays. Hence the need for the Base Load Review Act and similar legislation elsewhere: "If customers were charged for the interest during construction (and construction delays), then opponent activities to stall or stretch out construction would have less financial impact on the project. ... If the activities of nuclear power opponents had not had such a large effect on earlier construction, there would have been no need for a base load law for the new construction."

3. "So when you're sending out thank you notes to the Public Service Commission, SCANA and the Legislature for their roles in forcing you to pay the construction interest on these now-abandoned nuclear plants, be sure to include one to your favorite nuclear power opponents. They won't like it, but they do need to hear from you."

But of course, as Santee Cooper's Leighton Lord bluntly stated, without the state Base Load Review Act, the project would never have started.19

And of course, Westinghouse, SCE&G, Santee Cooper and others proved themselves perfectly capable of screwing up the VC Summer project without any help from environmentalists and other nuclear opponents.

Had the early warnings of environmentalists been heeded, the project never would have started. South Carolinians would have saved many billions of dollars. Or some or all of the wasted money could have been invested in renewables which would have been producing low-carbon power years ago.

Had the mid-project warnings of environmentalists been heeded, problems with the project might have been forced onto the public and political agenda and the project might have been put back on track ‒ or abandoned at a much earlier date with the associated savings.

Sammy Fretwell wrote in The State newspaper on August 12:25

"The troubles at the site didn't surprise [Columbia lawyer Bob] Guild and a small group of environmentalists who oppose nuclear power. Even though they philosophically do not believe in building more nuclear plants, activists from the Sierra Club and Friends of the Earth raised questions as far back as 2008 about the cost of the project and how it might affect ratepayers. Through the years, they held signs and acted out satirical plays, in an effort to raise awareness.

"Despite the efforts, Guild and others said they were able to gain little more than moderate support. "There were so many issues, but people didn't pay attention'' said Leslie Minerd, a longtime environmental activist and Five Points business owner. "Legislators bought what SCE&G said hook, line and sinker. They were listening to them before us.""

The fake environment group 'Environmental Progress' claims that SCE&G and Santee Cooper were "caving into pressure from Sierra Club and Friends of the Earth" by abandoning the project.26 Attempting to justify that ridiculous claim, 'Environmental Progress' said: "The effect of the campaigns funded by [Friends of the Earth and the Sierra Club] has, in fact, been to create the environment in which the Summer project is abandoned".27

Friends of the Earth complained in an August 22 statement about the failure of the South Carolina legislature to include public interest groups in their inquiries into the VC Summer project.28

Friends of the Earth has nevertheless filed unsolicited testimony ‒ titled 'Doomed from the Start' ‒ with the legislature.29 The testimony "documents the state's Public Service Commission (PSC) and the Office of Regulatory Staff (ORS) repeatedly failed to thoroughly analyze suspect requests by utility South Carolina Electric & Gas (SCE&G) concerning cost overruns, schedule delays, construction problems and nine pay-in-advance rate hikes to pay for project financing. Public interest groups, namely Friends of the Earth and the Sierra Club, repeatedly raised warning flags about challenges facing the project but were ignored by both the PSC and ORS."28

Tom Clements, senior adviser with Friends of the Earth and author of the 'Doomed from the Start' testimony, said: "As has been clear since day one, both the PSC and ORS viewed their roles as facilitators in what SCE&G requested, an approach that makes the regulators in large part responsible for the resulting debacle. Both the PSC and ORS rubber stamped every cost overrun and schedule delay that SCE&G asked for and it is now clear that those decisions were based on faulty information and grossly inadequate analyses. For their failure to protect the public interest, PSC commissioners and the director of the ORS must accept responsibility for enabling this $9 billion debacle and resign."28


1. SCE&G, 15 Aug 2017, South Carolina Electric & Gas Company to Voluntarily Withdraw Its New Nuclear Abandonment Petition to Accommodate the Legislative Review Process',

2. World Nuclear News, 16 Aug 2017, 'SCE&G withdraws petition to scrap Summer project',

3. Kristi E. Swartz, 17 Aug 2017, 'Will V.C. Summer project restart? Probably not',

4. Thad Moore, Aug 2017, 'CEO: SCANA may not return to scuttled nuclear project — even if a new partner emerges',

5. Rod Adams, 17 Aug 2017, 'Is V.C. Summer really dead or is near term revival possible?',

6. John Downey, 22 Aug 2017, 'Senators told saving V.C. Summer project could take ‘a miracle'',

7. Amy Harder, 4 Aug 2017, 'Utility made failed plea for billion-dollar nuclear grant',

8. Thad Moore and Emma Dumain, 12 Aug 2017, 'Trump administration silent on demise of nuclear project it once called 'massively important'',

9. Avery Wilks, 16 Aug 2017, 'SCANA sticking with plans to abandon nuclear project, charge customers more', The State,

10. 19 Aug 2017, 'McMaster to Santee Cooper board: 'All options' on the table when it comes to possible sale',

11. Mark Nelson and Michael Shellenberger, 2 Aug 2017, 'Wind Energy Still More Expensive Than Nuclear Reactors Halted for Cost Overruns',

12. John Downey, 16 Aug 2017, 'SCANA sees little hope for reviving V.C. Summer nuclear project despite partner search',

13. 17 Aug 2017, 'Fate of US VC Summer NPP still uncertain',

14. Thad Moore, 21 Aug 2017, 'Santee Cooper has heard from 2 companies interested in joining V.C. Summer project, but neither is 'viable'',

15. 22 Aug 2017, 'Santee Cooper: Offers to Revive Summer Nuclear Expansion Not Viable',

16. Avery G. Wilks, 23 Aug 2017, 'SCE&G got state's OK for doomed nuclear project without a detailed construction schedule',

17. Jenna-Ley Harrison, 22 Aug 2017, 'Local senator promises to 'protect the ratepayers' after nuclear project ends',

18. Andrew Brown, 22 Aug 2017, 'SCANA CEO rushed from state Senate hearing as failure review begins on abandoned $9 billion nuclear plant project',

19. Leighton Lord, 21 Aug 2017, 'Here's why Santee Cooper started, stopped nuclear plants',

20. Cindi Ross Scoppe, 22 Aug 2017, 'How ‘waste not, want not' became ‘spend more, profit more'',

21. Chip Campsen, 15 Aug 2017, 'How the S.C. Legislature paved the way for nuclear mess',

22. Cheryl Rofer, 3 Aug 2017, 'A Job Well Done',

23. Chris Tomlinson, 3 Aug 2017, 'Nuclear power as we know it is finished',

24. James H. Holloway Jr., 20 Aug 2017, 'How nuclear opponents paved the way for SC law',

25. Sammy Fretwell, 12 Aug 2017, 'Warnings were raised years before utilities abandoned nuke project',

26. Mark Nelson and Michael Light, 31 July 2017, 'New South Carolina Nuclear Plant Would Cut Coal Use by 86%, New Analysis Finds',


28. Friends of the Earth, 22 Aug 2017, 'Friends of the Earth Files Unsolicited Testimony with South Carolina Legislature on Termination of Nuclear Reactor Project',

29. Friends of the Earth, 22 Aug 2017, 'Doomed from the Start: $9 Billion Reactor Construction Debacle due to Imprudence by South Carolina Electric & Gas (SCE&G) and Dereliction of Duty by the S.C. Public Service Commission and the Office of Regulatory Staff',

Toshiba and Westinghouse fight for survival

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

(Please subscribe to Nuclear Monitor at

On August 10, Toshiba reported its financial figures for the 2016 fiscal year (ending 31 March 2017) after repeated delays and a protracted dispute with its auditor. Toshiba reported a net loss of ¥‎965.7 billion (US$8.83bn; €7.51bn)1 ‒ more than double the loss of the previous year, and the largest-ever annual loss for a Japanese manufacturer.2

Toshiba said its net worth is negative ¥552.9 billion ($5.07bn; €4.29bn)2 and notes (as it did in April) that there is "substantial doubt about the Company's ability to continue as a going concern".1

Toshiba's losses on its nuclear businesses amounted to over US$11 billion (€9.65bn) in the 2016 fiscal year. The company's financial report states: "Toshiba Group recorded a net loss attributable to shareholders of the Company of 965.7 billion yen (US$8622.0 million), due to the loss of 1,242.8 billion yen (US$11,096.3 million) generated in Westinghouse, its U.S. subsidiaries and affiliates, and Toshiba Nuclear Energy Holdings (UK) Limited, a holding company for Westinghouse Group operating companies outside the U.S."1

Toshiba noted that its subsidiary Westinghouse Electric Company, Westinghouse's US subsidiaries, and Toshiba Nuclear Energy Holdings (UK) Limited, had all filed for Chapter 11 bankruptcy protection under the US Bankruptcy Code on March 29. Those filings "deconsolidated Westinghouse from Toshiba", Toshiba said.1

Toshiba has agreed to meet parent-company contractual agreements with US utilities by paying US$3.68 billion to the owners of the Vogtle AP1000 project in Georgia, and US$2.17 billion to the owners of the VC Summer AP1000 project in South Carolina, in the coming years.1 Thus Toshiba ‒ assuming the company still exists ‒ will be free from the mess of the AP1000 projects in the US when its makes its final payment in September 2022.

And Toshiba hopes to rid itself of Westinghouse altogether: "As part of the Company's plan to offset the negative impact of the ongoing situation, the Company has been reviewing a restructuring plan of Westinghouse Group including deconsolidation by a potential sale of a majority stake in order to eliminate risk in the overseas nuclear power business."1

Auditor dispute

Toshiba had to repeatedly delay releasing its financial figures because of a protracted dispute with its auditor, PricewaterhouseCoopers (PWC) Aarata. The auditor issued an "opinion with qualifications" regarding Toshiba's annual earnings report on August 10, along with an "adverse opinion" on Toshiba's internal controls.2,3 PWC Aarata also said there is an "unfixed significant misstatement" and that Toshiba's figures "are not based on generally accepted corporate accounting levels".2

PWC Aarata believes Toshiba "should have booked a respectable degree or all" of the massive losses stemming from its US-based subsidiary Westinghouse ‒ lead contractor for the VC Summer and Vogtle AP1000 projects ‒ in fiscal 2015 instead of the following year.2 Toshiba claims it wasn't aware of the massive cost overruns with the US AP1000 projects but PWC Aarata evidently believes otherwise.4

If Toshiba followed its auditor's advice, it would have recorded negative net worth for two consecutive years, which would normally trigger a delisting from the Tokyo Stock Exchange.5 That, in turn, would take Toshiba one step closer to bankruptcy ‒ hence the company's reluctance to accept the auditor's advice.

Stock exchange listing

As things stand, Toshiba has avoided a stock exchange delisting – but on August 1 it was demoted to the second tier of the exchange, and will no longer feature in the Nikkei 225 index of Japan's top public companies.6

Toshiba is still under pressure. Japan Times noted that "there are still two scenarios under which it could be delisted from the Tokyo Stock Exchange: by failing to eliminate its negative net worth and failing to show improvement in its internal management controls. TSE rules stipulate that firms must be delisted if they conclude two consecutive business years in a negative net worth. Because Toshiba ended 2016 with a negative net worth, it was demoted last Tuesday to the TSE's second section."7

Financial Times journalist Peter Wells wrote on August 10:8

"The immediate threat to Toshiba may have receded after its auditor signed off its annual results but the broader dangers that still threaten the company's future have not disappeared. Toshiba remains, say people close to the conglomerate, "absolutely devoted" to remaining listed on the Tokyo Stock Exchange.

"But the decision by PwC Aarata, Toshiba's auditor, to add a so-called adverse opinion of the company's internal controls could still bring about its delisting. "I don't see how the TSE can look at the wording of that criticism and decide that Toshiba did have adequate control of its systems at the end of March 2017," says Travis Lundy, an analyst at Smartkarma. The wording, he suggests, lowers the likelihood of Toshiba remaining listed. "I don't see anything that suggests this was a problem in the past, but that it has now been fixed."

"Toshiba's biggest challenge has certainly not gone away. It is still scrambling to fill a $5bn hole in its shareholder equity, punched by a $6.3bn writedown on its US nuclear business, the Westinghouse subsidiary that filed for Chapter 11 bankruptcy protection this year. Japanese companies that report two consecutive years of negative shareholder equity face delisting from the TSE, although the exchange operator is able to exercise some discretion.

"Successfully closing the $18bn sale of its memory chip business by the end of its financial year in March 2018 remains Toshiba's best shot at reversing the shareholder equity deficit and avoiding a forced delisting. But the sale process continues to face numerous obstacles, and bankers, lawyers and other executives involved with the sale have repeatedly described "chaos" in the process. ... Owing to the time any sale agreement would take to pass regulators ‒ as well as the need to smooth out a complicated legal spat with joint venture partner Western Digital ‒ Toshiba has in effect until the end of August to conclude a sale, say bankers and lawyers involved in the talks."

"Even if Toshiba can get the chip unit sale back on track in a timely fashion, the risk of delisting may not subside quickly. Since its [profit padding] accounting scandal in 2015, Toshiba has been under scrutiny from the TSE, and in September last year submitted a report on its internal management controls to the bourse operator. But that was knocked back by the exchange three months later. In March, Toshiba resubmitted the report ‒ its second and final chance to impress the TSE that its controls were up to scratch. Should the TSE at some point decide that Toshiba's internal controls are passable, then it would have to justify how it arrived at a different conclusion from the independent auditor. Such a discrepancy could send investors at home and abroad the wrong signal at a time when Japan is keen to show it is trying to improve corporate governance standards."


The small risk of Toshiba going bankrupt will loom much larger if the sale of the memory chip business falls through. There is also a possibility that Toshiba will voluntarily file for bankruptcy protection, much as Westinghouse has done in the US. The Wall Street Journal reported on July 27:9

"A number of creditors and others involved in Toshiba Corp.'s restructuring are pushing for a Toshiba bankruptcy filing as the best path to rebirth after its effort to raise money through a chip-unit sale stalled. People involved in talks over Toshiba's workout, including business partners, lawyers and people with ties to the company's main bankers, said bankruptcy is worth serious study. Some of them said it is the best available option and that they are advocating it in discussions with Toshiba or creditors. They said a bankruptcy filing by Toshiba, the core of an industrial conglomerate, could free it of burdens that include lingering liabilities from the March bankruptcy of its Westinghouse Electric Co. nuclear unit in the U.S."

"Toshiba's chief executive, Satoshi Tsunakawa, said at a recent news conference that seeking debt relief through the courts isn't an option. A Toshiba spokesman reiterated this week that the company has "no specific plan" to seek bankruptcy protection.

"A person familiar with deliberations at one of Toshiba's main lenders compared the conglomerate to a hole that might have treasure at the bottom but also lurking snakes. Bankruptcy, this person said, could kill any snakes and let the lenders access the treasure. ...

"One person directly involved in a portion of the Toshiba recovery plan said "everyone thinks" bankruptcy has to be looked at ‒ but it is difficult to say so publicly."


On July 31, SCE&G and Santee Cooper announced their decision to abandon the two partially-built AP1000 reactors at the VC Summer plant in South Carolina. Westinghouse wasn't forewarned even though it was formally the lead contractor on the project (though less directly involved since its March 29 bankruptcy filing). Westinghouse has been working on restructuring plans which assumed that the company would play a minor but profitable role in the completion of the VC Summer project ‒ those plans must now be reworked.

In a court filing on July 26, Westinghouse asked a New York bankruptcy judge to allow the company an extra three months to file a restructuring plan.10 Westinghouse said it needs more time given the complicated nature of the business ‒ the company has thousands of vendors, around 37,000 creditors and "five different business lines that serve more than half of the nuclear power plants in the world".10 Bankrupt companies have a 120-day exclusivity period to come up with a reorganization plan, the Pittsburgh Post-Gazette reported, and another 60 days to try to gain approval of it without worrying about creditors or others introducing competing plans.10 Westinghouse is seeking to extend both deadlines until December 6 and February 4, 2018, respectively.

On July 31, Westinghouse said it has submitted a five-year business forecast to its bankruptcy lenders which includes savings of US$205 million over that period and plans to cut 7% of its 14,000-strong global workforce.11,12

In early August, Westinghouse laid off 870 employees who were working on or supporting the VC Summer project.13 That prompted a lawsuit alleging that Westinghouse violated labor laws by laying off hundreds of workers without proper notice. Seeking class-action status, Andrew Fleetwood, a field engineering manager at VC Summer, is suing Westinghouse for violating the Worker Adjustment and Retraining Notification Act, which requires employers to provide at least 60 days of advance notice before a plant shutdown or a mass layoff.13 Westinghouse said it provided as much notice as practicable and that the employees will be permanently laid off on August 31 if no other assignment is identified for them.

On August 7, Westinghouse asked the bankruptcy court to allow it to break thousands of contracts associated with the VC Summer project ‒ contracts cover everything from engineering services and security protection to scaffolding and urine testing.14 These contractors will join the long list of unsecured creditors in Westinghouse's bankruptcy. The company has accumulated debts of around US$9.8 billion.15

Santee Cooper said in late July that it will continue to pursue Westinghouse's assets in bankruptcy court to obtain further payment on top of its share (US$976 million) of the parent-company contractual settlement of US$2.17 billion agreed to by Westinghouse's parent company Toshiba for the VC Summer project.16 Santee Cooper will "continue to pursue Westinghouse ... revenues and assets through bankruptcy court and other legal channels" to further offset its losses, according to chief executive Lonnie Carter.17

On June 27, the Delaware Supreme Court ruled against Westinghouse, and in favor of Chicago Bridge & Iron Co, in a US$2 billion dispute over cost overruns with the four AP1000 reactors under construction in Georgia and South Carolina.18,19


1. Toshiba Corporation, 10 Aug 2017, 'Toshiba Announces Consolidated Results for Fiscal Year 2016, to March 31, 2017',

2. Kyodo, 10 Aug 2017, 'Toshiba submits delayed financial report, avoids immediate delisting',

3. Reuters, 10 Aug 2017, 'Toshiba's auditor gives 'adverse opinion' on governance: filing',

4. Nikkei Asian Review, 11 Aug 2017, 'Battle between auditors drove Toshiba's earnings delay'',

5. Reuters, 10 Aug 2017, 'Toshiba wins auditor sign-off, likely avoiding delisting for now',

6. 2 Aug 2017, 'Cumbria nuclear backer Toshiba sees stock exchange demotion',

7. Kazuaki Nagata, 10 Aug 2017, 'Toshiba ducks delisting by submitting long overdue financial report',

8. Peter Wells, 10 Aug 2017, 'Cloud hangs over Toshiba even after auditor sign-off',
9. Kosaku Narioka, Takashi Mochizuki and Peter Landers, 27 July 2017, 'Toshiba Bankruptcy Filing Pushed by Some Involved in Workout',

10. Anya Litvak / Pittsburgh Post-Gazette, 27 July 2017, 'Westinghouse needs more time in crafting bankruptcy plan',

11. Anya Litvak / Pittsburgh Post-Gazette, 16 Aug 2017, 'Westinghouse cuts office space in North Hills',

12. World Nuclear News, 1 Aug 2017, 'US nuclear construction project to be abandoned',

13. Anya Litvak / Pittsburgh Post-Gazette, 11 Aug 2017, 'Westinghouse furloughed 870 employees in fallout from the cancelled South Carolina nuclear project',

14. Anya Litvak / Pittsburgh Post-Gazette, 9 Aug 2017, 'Westinghouse: Project canceled 'without warning'',

15. Nathan Bomey / USA Today, 30 March 2017, 'Georgia nuclear plant in jeopardy after Westinghouse plunges into bankruptcy',

16. Steven Mufson, 31 July 2017, 'S.C. utilities halt work on new nuclear reactors, dimming the prospects for a nuclear energy revival',

17. Andrew Ward, 1 Aug 2017, 'Westinghouse nuclear project halted in South Carolina',

18. Reuters, 29 June 2017, 'US court rules for Chicago Bridge in Westinghouse dispute',

19. Anya Litvak / Pittsburgh Post-Gazette, 27 June 2017, 'Court rules against Westinghouse in nuclear acquisition deal',

AP1000 reactor projects in the US, the UK and India

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

It remains unclear whether the four partially-built Westinghouse AP1000 reactors in the US will be completed ‒ and it will probably remain unclear for some months. Westinghouse CEO Jose Gutierrez said the company is working with the owners of the Vogtle and V.C. Summer nuclear plants ‒ Southern Co. in Georgia, and SCANA Corp. in South Carolina ‒ "to find a long-term solution to complete those reactors".1 Gutierrez said he hopes more reactors get built in the US and that "we hope they do a better job than we did".1

Southern Co. CEO Thomas Fanning said a decision may not be made on the Vogtle project in Georgia until August.2 A decision on the Summer project in South Carolina might be made by the end of June3 ‒ but none of the deadlines associated with the crisis are being met and it's unlikely the fate of the Summer project will be decided this month.

Work is proceeding on the Vogtle and Summer projects, albeit without Westinghouse funding, under interim agreements. The latest agreement to continue work on the Vogtle project expired on June 5 (an agreement extending to June 3 was extended for 48 hours). Presumably there will soon be another announcement extending the interim agreement ‒ or possibly a more significant, decisive announcement on the future of the project. The interim agreement to keep the South Carolina project moving ahead ends on June 26.

Anya Litvak summarized some recent developments in the Pittsburgh Post-Gazette on June 6:4

"On May 16, Westinghouse reached a tentative agreement with Southern Co., the parent of the utility that commissioned the Plant Vogtle AP1000 projects in Georgia. The deal called for Southern to take over responsibility for completing the construction. The two parties were supposed to finalize a path forward by Sunday, but they were still negotiating Monday.

"Parallel discussions are ongoing between Westinghouse and Scana Co., which owns the two AP1000 units under construction at V.C. Summer in South Carolina.

"It has been rumored for months that Fluor Corp. and Bechtel Corp., two of the country's largest engineering and construction firms, might be preparing bids to take over the projects in Georgia and South Carolina. Fluor was brought in by Westinghouse more than a year ago to straighten things out after the nuclear firm's ill-fated takeover of the nuclear construction firm that was previously in charge of that effort, Stone & Webster. Bechtel, according to the recently filed financial statements, has also been on the job since at least January, as evidenced by two "staff augmentation contracts," one at each site."

Westinghouse is expected to break its construction contracts with the owners of the Vogtle and Summer projects but would gladly remain involved in some capacity if asked to do so. The owners must estimate the costs required to complete the reactors and then decide whether (and how) to proceed. Possible funding sources include contractual guarantees from Westinghouse's parent company Toshiba, further government subsidies, and ratepayers.

The extension of a federal government tax credit program has been seen as the most likely way of securing federal support for the Vogtle and Summer projects. The extension could translate into about US$2 billion in funding support for each of the projects. But Congress has not supported an extension to date, and if it arrives it may be too late to save the projects.5

Toshiba is reportedly prepared to pay about US$3.6 billion towards the completion of the Vogtle plant, payable over at least three years. The agreement is not final and is said to be contingent on a similar agreement between Toshiba and the owners of the Summer plant.6 But that US$3.6 billion may not be enough to complete the Vogtle plant.7 Likewise, Toshiba's commitment to pay about US$1.7 billion towards the completion of the Summer plant isn't set in stone, and it may not be sufficient to complete the plant.3

There has been speculation that Toshiba may seek bankruptcy protection in Japan, just as Westinghouse has in the US, which would probably be the final straw for the Vogtle and Summer projects ‒ but it remains nothing more than speculation.3

Another possible source of funding to help complete the reactors would be to once again increase power bills in Georgia and South Carolina. Ratepayers are paying in advance for the Vogtle and Summer projects. Georgia Power had collected almost US$1.2 billion by the end of 2016 to pay for Vogtle.8 Power prices in South Carolina have increased by 20% since 2009 to pay for the Summer reactors3 and at least US$1.4 billion has been collected.9

Public utility commissions would need to approve further rate increases. Numerous increases have been approved as the cost of the reactor projects has escalated time and time again. Ratepayers are fed up, and politicians or commissioners proposing further increases might find themselves out of a job. The Atlanta Journal-Constitution said that funding the two AP1000 reactors in Georgia "may become the most volatile issue of the 2018 campaign for governor, lieutenant governor, Congress, the state Legislature, and perhaps dogcatcher."10

Given the history of state utility commissions repeatedly approving further imposts on ratepayers, no-one would be surprised if power bills are increased yet again. But there is some push-back. Public Service Commissioner Bubba McDonald said Georgia Power should voluntarily stop billing ratepayers for Vogtle costs, and the Public Service Commission has asked the state attorney general's office for advice as to whether it would be legal for Georgia Power to remove the charge.11 In circumstances where existing charges are being challenged, it will be difficult to increase those charges.

Georgia Power spokesperson Jacob Hawkins said the pay-in-advance model "saves customers hundreds of millions of dollars by reducing financing and borrowing costs"11 ‒ but Georgians and South Carolinians have paid over US$1 billion for reactors that may never be completed. Georgians are paying about US$23 million each month ‒ not far short of US$1 million per day ‒ for reactors that may never be completed.12

Kennedy Maize, contributing editor at Power magazine, thinks the projects will be abandoned: "My guess – and it's just that, based on my reading of U.S. nuclear history – is that both Vogtle and Summer eventually will crater. While both utilities enjoy supine state regulators and the ability to earn on construction costs as they are incurred, that will trigger rate shock and political backlash, killing the projects. That's what we saw in the 1980s."13

The Atlanta Journal-Constitution summarized some of that unhappy history: "[C]onstruction of Plant Vogtle's first two reactors had provided a vivid example of the potential complications. Plant Vogtle was conceived around 1970, with an original cost estimate of about $660 million. Construction was expected to take about eight years. Then, Three Mile Island happened. Regulations tightened. Demand for materials and interest rates shot up in the 1980s. Construction took 13 years. The final price tag: around $9 billion."8

AP1000 reactor plans in the UK

NuGen's plan for three AP1000 reactors at Moorside in the UK has descended into farce. Tom Samson, chief executive of the NuGen consortium, insists the project has "100 per cent backing" from Toshiba14 and he is "110% certain" the reactors will be built.15 But Toshiba is 100% committed to selling its stake in NuGen and has no intention of building reactors in the UK or anywhere else ... for reasons that must be all too obvious. The likelihood of the Moorside project going ahead is closer to 10% than 110%. French company Engie recently exited the Moorside project, forcing Toshiba to acquire its 40% stake based on contractual agreements, and previously Iberdrola and SSE exited the project.16

Samson says there is a "universe of options ... to progress this phenomenal project of national significance".14 South Korea's Kepco is the most likely saviour, but South Korean interest in NuGen dates from 2013, if not earlier, yet nothing has been agreed ‒ and the recent election of Moon Jae-in as President may complicate South Korean involvement in NuGen. A delegation from China's State Nuclear Power Technology Corporation (SNPTC) visited the UK in May, reportedly to meet NuGen. The Carlisle News and Star reported that "both organisations have not denied that such a meeting will take place."17 Chinese involvement has raised national security concerns18 that could scupper any such involvement.

NuGen has set up a 'strategic review' to assess whether the Moorside project can be revived.19

Meanwhile, David Wright, a director at UK's National Grid, says he is "sure" that the NuGen project will go ahead ‒ his confidence based on discussions with Tom Samson (!). But National Grid recently suspended its £2.8bn (US$3.6bn) project to provide a transmission link to the Moorside site.20

Oliver Tickell and Ian Fairlie wrote an obituary for Britain's nuclear renaissance in The Ecologist on May 18.21 They concluded: "[T]he prospects for new nuclear power in the UK have never been gloomier. The only way new nuclear power stations will ever be built in the UK is with massive political and financial commitment from government. That commitment is clearly absent. So yes, this finally looks like the end of the UK's 'nuclear renaissance'. Not with a bang, nor even with a whimper, but with a deep and profoundly meaningful silence. Not a moment too soon."21

AP1000 reactor plans in India

World Nuclear News reported on June 2 that six AP1000 reactors planned for the Mithi Virdi plant in the Bhavnagar district of India's northern Gujarat state will now be constructed at the Kovvada site in the southern state of Andhra Pradesh.22 But there's precious little chance of AP1000 reactors being built anywhere in India. Both Toshiba and Westinghouse are exiting the reactor construction industry, and it's doubtful whether another company or utility would take over the project.

No binding contracts have been signed. No-one has any idea where the money might come from to pay for the AP1000 reactors. India's liability law remains an obstacle. And public opposition is still a major obstacle ‒ public opposition goes a long way to explaining the decision to abandon the Mithi Virdi AP1000 project and opposition will be keenly felt in Andhra Pradesh.23 That is, opposition will be keenly felt if the Andhra Pradesh project gathers any momentum, which seems unlikely for the foreseeable future.

Nuclear Engineering International reported on May 9 that India has asked Toshiba to offer ways to resolve the issue of reactor sales following the bankruptcy of its subsidiary Westinghouse.24 A firm agreement on AP1000 reactors was meant to be concluded by the end of June 2017, but that deadline will come and go without any agreement. Nuclear Engineering International also reported that India is seeking a loan of around US$8‒9 billion from the US Export-Import Bank to part-fund the AP1000 reactors.24 But there is very little likelihood that the Export-Import Bank will provide the funding.

According to a recent Reuters report, India's Cabinet has decided that foreign reactors will not be bought unless such reactors are already in operation elsewhere.25 Likewise, Sekhar Basu, secretary of India's Department of Atomic Energy, said in May that potential foreign reactor suppliers "have to sort out their financial issues before anything can come on the table" and India "will not buy a reactor unless a plant is operating in their own country."26

Some long-delayed AP1000 and EPR projects may be completed in the next couple of years; but even so, plans for AP1000 and EPR reactors in India will likely be scrapped.

In May, India's Cabinet approved a plan to build 10 indigenous pressurized heavy water reactors (PHWR). That decision clearly reflects doubts about the ability of Westinghouse to deliver AP1000 reactors and French utilities to deliver EPR reactors. The plan for 10 new PHWRs faces major challenges27 but suffice it here to note that the PHWR program has more chance of success than the AP1000 or EPR plans.

Suvrat Raju and M.V. Ramana wrote in The Hindu on June 7:28

"Both Areva and Westinghouse had entered into agreements with the Indian government to develop nuclear plants. Areva had promised to build the world's largest nuclear complex at Jaitapur (Maharashtra), while last June, Prime Minister Narendra Modi and U.S. President Barack Obama announced, with great fanfare, that Westinghouse would build six reactors at Kovvada (Andhra Pradesh).

"The collapse of these companies vindicates critics of these deals, who consistently pointed out that India's agreements with Areva and Westinghouse were fiscally irresponsible. If these projects had gone ahead, Indian taxpayers would have been left holding the bag ‒ billions of dollars of debt, and incomplete projects. This narrow escape calls not only for a hard look at the credibility of those members of the nuclear establishment who advocated these deals for a decade, but for a comprehensive re-evaluation of the role of nuclear power in the country's energy mix.

"Therefore, the government's recent decision to approve the construction of ten 700 MW Pressurised Heavy Water Reactors (PHWRs) deserves to be scrutinised carefully. Strictly speaking, there is little that is new in this decision. A list of all the sites where the PHWRs are to be constructed had already been provided to Parliament by the United Progressive Alliance government in 2012. But delays with the first 700 MW PHWRs already under construction, the changed international scenario for nuclear energy, and the ongoing reductions in the cost of renewable energy all imply that these earlier plans are best abandoned."


1. Rebecca Kern, 25 May 2017, 'Westinghouse to Emerge From Bankruptcy Stronger, CEO Says',

2. Peter Maloney, 26 May 2017, 'Southern CEO: Decision on Vogtle's fate not likely until late summer',

3. David Wren, 11 May 2017, 'Reports of impending Toshiba bankruptcy raise new doubts about S.C. nuclear project',

4. Anya Litvak / Pittsburgh Post-Gazette, 6 June 2017, ''We, Westinghouse, cannot fail': CEO gives fuller picture of business in new documents',

5. Sammy Fretwell, 22 May 2017, 'Could losing tax break sink SCE&G's nuclear project?',

6. Tom Hals and Jessica DiNapoli, 15 May 2017, 'Power plant owners limit Toshiba's Westinghouse liabilities: sources',

7. Matt Kempner, 25 May 2017, 'Kempner: Radioactive question looms over Georgia's nuclear mess',

8. Russell Grantham and Johnny Edwards, 19 May 2017, 'Plant Vogtle: Georgia's nuclear ‘renaissance' now a financial quagmire',

9. Sammy Fretwell, 3 June 2017, 'Once-secret records reveal pattern of costly mistakes at troubled nuclear project',

10. Jim Galloway, 26 April 2017, 'The first suggestion of a federal rescue for Plant Vogtle',

11. Molly Samuel, 6 June 2017, 'Ga. PSC Delays Nuclear Vote, Asks Attorney General To Step In',

12. Pam Wright, 23 May 2017, 'Sinking Into the Vogtle Vortex',

13. Kennedy Maize, 20 May 2017, 'Nuclear Farewell?',

14. 16 May 2017, 'NuGen chief says Cumbrian new nuclear has Toshiba's '100 per cent' backing',

15. ITV, 3 May 2017, 'Exclusive: NuGen CEO 'certain' Moorside will go ahead',

16. Nuclear Free Local Authorities, 4 April 2017, 'As Engie becomes the seventh international energy utility to give up on UK new nuclear build, NFLA say now is the time to move towards a decentralised, renewable energy alternative policy',

17. Carlisle News and Star, 23 May 2017, 'Chinese investors linked with £10bn Moorside nuclear plant,

18. Matthew Gunther, 15 August 2016, 'Chinese investor in Hinkley Point faces nuclear espionage charges',

19. Cumbrians Opposed to a Radioactive Environment, 17 May 2017, 'NuGen's investment turmoil sparks pylon delay for Moorside new-build',

20. Jane Gray, 23 May 2017, 'Transmission chief ‘sure' that Moorside will go ahead',

21. Oliver Tickell and Ian Fairlie, 18 May 2017, 'Conservative election manifesto signals the end of new nuclear power',

22. WNN, 2 June 2017

23. 2 June 2017, 'Green clearance for nuclear project in Gujarat withdrawn by NGT, but Govt shifts it to Andhra!',

24. Nuclear Engineering International, 9 May 2017, 'Westinghouse will miss deadline for India deal',

25. Geert De Clercq, 3 June 2017, 'France, India to cooperate in fighting climate change',

26. Douglas Busvine, 18 May 2017, 'Foreign suppliers urged to step up as India backs own nuclear design',

27. Dan Yurman, 23 May 2017, 'India Sets New Course for Nuclear Energy with 10 700 MW PHWR',

28. Suvrat Raju and M.V. Ramana, 7 June 2017, 'Nuclear power: Expensive, hazardous and inequitable',

Update on the Toshiba / Westinghouse crisis

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

Nuclear Monitor has been covering the Toshiba / Westinghouse crisis in detail, on the expectation that it might soon reach a dramatic resolution, and because we think it is useful to have a detailed record of these momentous developments. The resolution might yet be dramatic but it won't be reached anytime soon. Japanese conglomerate Toshiba and its US nuclear subsidiary Westinghouse are undergoing complex negotiations about restructuring options, including selling profitable parts of their operations to stave off bankruptcy. Decisions on the fate of the four Westinghouse AP1000 reactors under construction in the US are also unfolding slowly.

The best-case scenario from the point of view of Toshiba and Westinghouse is that both companies survive ‒ albeit with some painful downsizing. And they hope that the US AP1000 projects will be completed, though the fate of those projects is largely out of their hands. Even in the best-case scenario (from their point of view), much damage has already been done: the multi-billion-dollar cost overruns with the US reactor projects, and the near-collapse of nuclear industry giants, will have a chilling effect on the global nuclear power industry for decades to come.


Toshiba announced on May 15 that it expects to report a consolidated net loss of ¥950 billion (US$8.6 billion) for the 2016-2017 financial year which ended March 31.1 But the figure was an unaudited projection as the company and its auditor PricewaterhouseCoopers (PwC) Aarata remain in dispute about Toshiba's accounting for cost overruns with the four AP1000 reactors under construction in the US.

Toshiba said it aims to file a financial report with the Tokyo Stock Exchange and Tokyo's Kanto Finance Bureau by the legally required deadline of June 30. But audited figures will not be available ahead of a June 28 general meeting of shareholders. An extraordinary general meeting will be held at a later date to present audited financial figures. "The company expresses its sincere apologies to its shareholders, investors and all other stakeholders for any concerns or inconvenience caused by this situation," Toshiba said in a statement.2

In addition to the unresolved dispute over Toshiba's historical accounting for AP1000 cost overruns in the US, the company is unsure how much it will have to pay US utilities building those reactors, further complicating efforts to accurately assess its financial position. And Westinghouse's Chapter 11 bankruptcy filing further complicates the process. Nikkei Asian Review reported: "The Chapter 11 bankruptcy filing itself also is slowing the process. Westinghouse looks to firm up a turnaround plan in late July, which will confirm the extent of Toshiba's losses. This will let PwC Aarata kick the auditing process into high gear."3

Toshiba's efforts to find a new auditor to replace PwC Aarata have been unsuccessful. Finding a new, second-tier auditor in a short space of time to endorse figures from the past fiscal year, when a large auditing firm has refused to sign off on those figures, has proven to be impossible.4

Thus Toshiba plans to work with PwC Aarata to finalize figures for the March 2016 to March 2017 fiscal year, and then to find a new auditor. Nikkei Asian Review reported: "PwC Aarata has reportedly agreed to audit Toshiba's earnings only under certain conditions, including further investigation into the Westinghouse problems. Ironing out these issues is likely to take some time. Toshiba may submit a request soon to the Financial Services Agency to extend the securities report deadline beyond June. Some company insiders say the final report may not come out until around September."5

One of Toshiba's many problems is that its efforts to sell its lucrative NAND flash memory chip business are being frustrated by joint partner Western Digital. US-based Western Digital announced on May 14 that several of its SanDisk subsidiaries have filed a request for arbitration through the International Chamber of Commerce related to flash-memory joint ventures operated with Toshiba.1

Western Digital wants to increase its stake in NAND but its proposed purchase price is "low-ball" according to Nisha Gopalan, a Bloomberg columnist.6 Gopalan wrote on May 29: "Western Digital has Toshiba over a barrel. It took the Japanese company to the International Chamber of Commerce's International Court of Arbitration, and has refused to allow Toshiba to use its shares as collateral to access a much-needed 700 billion yen credit line. Western Digital has since softened its stance, but the point's been made: There's not going to be a sale unless Western Digital is invited to the party."6

Arbitration between Western Digital and Toshiba could take a year or so.7 But Toshiba doesn't have that amount of time to sort out its current mess. It has to recover its financial situation, and produce audited financial figures, to avoid a stock-exchange delisting that would make the company's current situation much worse and possibly irretrievable. A negotiated settlement over the sale of NAND seems likely.8

In a piece titled 'Toshiba: From nuclear renaissance to nuclear nightmare', market analyst Venkat Subramaniam notes that Toshiba faces "significant risks on a number of fronts – e.g. delisting risk with the TSE [Tokyo Stock Exchange], banks pulling the plug, execution risk with NAND sale, getting auditor sign-off on the accounts, and the very real possibility of crippling additional liabilities on the Westinghouse side."9

A growing number of Toshiba's subsidiaries and affiliates are withdrawing money from the parent company, seeking to minimize risks and appease shareholders.10

Associated Press reported on May 31 that Toshiba is facing 20 lawsuits in Japan filed by banks, individuals, overseas investors and other parties seeking damages totaling ¥50 billion (US$455 million).11

Masashi Goto, a former Toshiba engineer who specialized in nuclear containment vessels, told Associated Press that nuclear reactors can be likened to bedridden patients, who must be cared for and eventually properly buried ‒ an onerous, decades or possibly centuries-long task for the industry. "Even after Fukushima," he said, "Toshiba management did not have the wisdom to change course."11


Mark Marano, Westinghouse's chief operating officer, said on May 23 that Toshiba has "signalled pretty clearly to the market" that it wants to divest a majority stake in Westinghouse.12 The process of selling Toshiba's 90% stake in Westinghouse "may materialize into the fall, once we get further along in the Chapter 11 process," Marano said.12

But previous efforts to sell Westinghouse have failed and future attempts will be unlikely to succeed unless Westinghouse is sold for a song (Toshiba chief executive Satoshi Tsunakawa said in mid-March that Toshiba might have to pay a buyer to take Westinghouse off its hands13) and/or broken up into bite-sized chunks. There will certainly be bidders for Westinghouse's profitable operations.

Westinghouse says it plans to file a business plan with the bankruptcy court in July, but approval of the plan may have to wait until "some months after" according to company executive David Howell.12

Westinghouse's interim president and CEO José Gutíerrez said on May 24 that the company remains committed to its reactor design business and will pursue future sales with opportunities in China, India, Turkey and the UK.14 That may be wishful thinking, of course.

Westinghouse is working to develop a "more achievable delivery model" to reduce risk, Gutíerrez said.14 The company hopes to remain involved in the nuclear industry in areas such as engineering and procurement, instrumentation and controls, and fuel services ‒ but will no longer take on reactor construction contracts such as the AP1000 projects that have led it to seek bankruptcy protection. "Construction is not our forte, and we certainly have decided from a risk perspective, never to do that again," David Howell said.15

One of the company's problems is keeping skilled staff ‒ and more broadly, the lack of skilled, experienced staff goes some way to explaining the failure of the US AP1000 projects, and the failure of the AP1000 projects will make a bad situation worse. Westinghouse notified around 75 former senior managers in April that it will stop paying their pension entitlements, thus removing a benefit that has helped the company retain top talent.16 Some of the former managers may take Westinghouse to court, Reuters reported on May 25. Former Westinghouse CEO Steve Tritch told Reuters the company may struggle to keep top talent without the plan in place.16

Westinghouse's ability to keep skilled staff was further strained by a lockout of over 170 workers from the company's Newington plant in New Hampshire, and a smaller facility at Pease Development Authority, beginning May 21. Westinghouse wanted workers to sign a new agreement freezing wages for three years and severely curtailing conditions relating to health care, pensions, and severance packages.17 Newington worker and union leader Duane Egan said the union is willing to forgo wage increases but the contract put forward by Westinghouse "strips us of most of our benefits, and we're not agreeable to that."18 The two-week lockout ended on June 5 with a compromise agreement on employment conditions.19

The Newington plant manufactures the reactor vessel barrel and the parts that go into it for AP1000 nuclear power plants. Currently, it is working on reactor vessel parts and coolant pumps that will go into the AP1000 projects in Georgia and South Carolina.18

Further disputes between Westinghouse and other unions are anticipated in the coming months. Union members claim that Westinghouse is trying to bring union employees in line with its non-unionized workers, who have seen their pensions frozen, their severance pay slashed, and their health-care costs increase in recent months.18 Westinghouse has 713 union employees across its operations, according to the company's bankruptcy documents, a small fraction of its total workforce which numbers around 11,500 worldwide.18

Westinghouse is also having problems at its nuclear fuel plant in Columbia, South Carolina. Since finding an accumulation of uranium in an air pollution control device last year ‒ leading to a shut-down of part of the plant for several months ‒ the Nuclear Regulatory Commission has cited one additional violation related to the same piece of equipment. The NRC says it will conduct comprehensive performance reviews annually instead of every two years.20

The problems just keep piling up for Westinghouse. The Pittsburgh Post-Gazette reported on June 6:21

"In new documents, Westinghouse disclosed a litany of lawsuits, including those stemming from its AP1000 construction projects. It also listed conflicts that may at some point lead to more lawsuits, including potential breach-of-contract claims against Curtiss-Wright Electro-Mechanical Corp., whose Cheswick plant makes reactor coolant pumps. Defects in coolant pumps delivered to Westinghouse's AP1000 projects in China and in the U.S. delayed progress there.

"Westinghouse indicated it is mulling an action against its Japanese parent company, Toshiba Corp., for breach of contract. And the company disclosed that it received a subpoena from the U.S. Securities and Exchange commission in March, a year after Toshiba confirmed the federal agency is investigating it for potential fraud around an accounting scandal."


1. World Nuclear News, 15 May 2017, 'Toshiba projects JPY950 billion loss for FY2016',

2. Toshiba Corporation, 31 May 2017, 'Notice on the Ordinary General Meeting of Shareholders',

3. Nikkei Asian Review, 1 June 2017, 'Toshiba earnings delayed again amid uncertainty over losses',

4. Japan Times, 11 May 2017, 'Toshiba gives up finding new auditor for now',

5. Nikkei Asian Review, 11 May 2017, 'Toshiba keeping current auditor for fiscal 2016 earnings',

6. Nisha Gopalan, 29 May 2017, 'Western Digital Isn't Going Anywhere, Toshiba',

7. 15 May 2017, 'Toshiba's U.S. partner Western Digital seeks right to have say in sale of chip unit',

8. Nikkei Asian Review, 2 June 2017, 'Western Digital CEO to return to Japan, seeking Toshiba deal',

9. Venkat Subramaniam, 26 May 2017, 'Toshiba: From nuclear renaissance to nuclear nightmare',

10. Nikkei Asian Review, 17 May 2017, 'Group companies pulling money out of Toshiba',

11. Associated Press, 31 May 2017, 'For Toshiba, a management meltdown',

12. Rebecca Kern and Pavel Alpeyev, 24 May 2017, 'Toshiba may seek buyers for Westinghouse starting this fall',

13. Makiko Yamazaki and Taiga Uranaka, 14 March 2017, 'Toshiba pushes sale of nuclear unit Westinghouse as crisis deepens',

14. World Nuclear News, 25 May 2017, 'Westinghouse aims for competitive future',

15. Rebecca Kern, 25 May 2017, 'Westinghouse to Emerge From Bankruptcy Stronger, CEO Says',

16. Tom Hals, 25 May 2017, 'EXCLUSIVE-Bankrupt Westinghouse ends pensions for ex-CEOs, execs',

17. Doug Alden, 2 June 2017, 'Westinghouse workers seek support from State House legislators',

18. Anya Litvak / Pittsburgh Post-Gazette, 22 May 2017, 'Westinghouse locks out union at New Hampshire plant',

19. Jason Moon, 5 June 2017, 'Westinghouse, Union Reach Deal to End Newington Employee Lockout',

20. Sammy Fretwell, 8 May 2017, 'Nuclear-safety concerns linger at Westinghouse plant',

21. Anya Litvak / Pittsburgh Post-Gazette, 6 June 2017, ''We, Westinghouse, cannot fail': CEO gives fuller picture of business in new documents',

Update on the Toshiba / Westinghouse crisis

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

As discussed in Nuclear Monitor #841, Japanese conglomerate Toshiba said on April 11 that there is "substantial doubt about the Company's ability to continue as a going concern". Toshiba's US nuclear subsidiary Westinghouse filed for bankruptcy protection on March 29.

The companies are in crisis because of extraordinary cost overruns building four AP1000 reactors in the US ‒ two each in Georgia and South Carolina. Estimating the scale of the cost overruns is difficult because there is still much work to be done to complete the reactors. A reasonable estimate is that if the reactors are completed, the combined overruns will amount to about US$13 billion.1,2 Estimates compiled by Reuters put the cost overruns ‒ again assuming that the reactors are completed ‒ at US$3.9‒6.7 billion for the reactors in Georgia and US$11.9 for the reactors in South Carolina, a combined total of US$15.8‒18.6 billion.3

Toshiba wants to sell Westinghouse but can't find a buyer, although profitable parts of Westinghouse's operations might be sold off after a company restructure. Toshiba is also restructuring and selling some of its own businesses to avoid bankruptcy. Toshiba said on April 24 that it will establish its four in-house companies as wholly-owned subsidiaries.4 As of October 1, it will split off its Energy Systems & Solutions Company, and the Nuclear Energy Systems & Solutions Division, and transfer them to a newly established company. The other three companies to be established as independent business entities are Infrastructure System & Solutions Company, Storage & Electronic Devices Solutions Company, and Industrial ICT Solutions Company.

The Financial Times reported: "Toshiba is not expected to seek to sell the subsidiaries because the group last month identified that much of the activities done in these four areas as essential to its turnround strategy. But the shake-up will leave the 144-year-old conglomerate, once a proud pillar of the Japanese industrial establishment, as a mere shadow of its former self. Toshiba is planning to sell its Nand memory chip business, the group's flagship technology asset, as well as offload much or all of Westinghouse. The Nand business could raise more than $20bn for the group ‒ and therefore help repair its balance sheet."5

Toshiba's stand-off with its auditor

On April 11, Toshiba's auditor PricewaterhouseCoopers Aarata refused to sign off on Toshiba's financial report ‒ Toshiba reported a net loss of ¥647.8 billion (US$5.7bn) for the Oct. to Dec. 2016 quarter. The main sticking point has been Toshiba's accounting in relation to the AP1000 reactors in the US.

Over the past month, Toshiba has been looking for a new auditor.6 The other three of the Big Four accounting firms are probably non-starters. Deloitte Touche Tohmatsu and KPMG Azsa have past business ties to Toshiba. So does Ernst & Young ShinNihon, Toshiba's previous auditor. Ernst & Young ShinNihon incurred a fine and reputational damage for failing to detect Toshiba's billion-dollar profit-padding scam from 2008‒2014.6

Toshiba is seeking a second-tier accounting firm to sign off on its accounts but the Financial Times reported that only a few such firms have the expertise and the number of auditors needed to handle a group as large as Toshiba.6

Any auditing firm that certifies Toshiba's accounts does so at the risk of damaging its own reputation.

Sacking PricewaterhouseCoopers is not a simple option for Toshiba ‒ it would require shareholder approval.7 Sacking the auditor could unsettle the Stock Exchange, Reuters reported, but Toshiba "is out of attractive options."8

Toshiba has said it will release its figures for the March 2016 to March 2017 fiscal year by mid-May, but that could be extended to June 30. The company says it expects to report a net loss of just over ¥1 trillion (US$8.9bn) for the fiscal year, well over double the estimate of ¥390 billion provided in February.9

Stock exchange listing / delisting

Toshiba faces being delisted from the Tokyo Stock Exchange, an outcome that will be all the more likely if it releases unaudited figures for the 2016‒17 fiscal year (as it did for the Oct. to Dec. 2016 quarter). Delisting would create a new set of problems that would make it all the more difficult for the company to survive ‒ big investors would likely sell their stock, financing costs would increase, more lawsuits from shareholders would be expected, the share price would take another hit (it has fallen by 50% over the past six months) and, as Reuters reported, shareholders would be left with "near-worthless paper".8 Last but not least, the complete collapse of Toshiba would loom as a real possibility.

The Reuters report continued: "There are three hurdles. First, a Tokyo Stock Exchange review has to conclude managers have fixed long-running shortcomings in internal controls. Second, the company must claw its way out of negative equity by March – hence the 2 trillion yen-plus ($18 billion) sale of its memory-chip business. And third, it must file full-year results promptly: ideally by May 15, late June at the very latest."8

A zombie company?

Creditors and investors are nervous. In mid-April, Toshiba lost access to one of its subsidiary's funds after hedge fund Oasis Management went to court to get the subsidiary to take back its cash ‒ ¥87.8 billion (US$771m) ‒ from the parent company.10 If that trickle becomes a flood ‒ and in particular if the banks call in their loans ‒ Toshiba will be doomed.

The BBC outlined three possible outcomes for Toshiba.11 Firstly, it might become a zombie company like Sharp, TEPCO and many others: loss-making or insolvent companies that should be allowed to fail, but continue to operate because of lenient creditors. The second ‒ and most likely ‒ option is a break-up of the company (the strategy that is already playing out with Toshiba's plan to sell its memory chip business). The third possibility is a complete collapse of Toshiba. "If the chip sale falls through, more accounting irregularities emerge or the banks decide to call in their loans, then all bets are off," BBC business reported Leisha Chi said in an April 16 article.11

Might Toshiba file for bankruptcy protection?

Southern Company, which hired Toshiba subsidiary Westinghouse to build two nuclear reactors in Georgia, is concerned that Toshiba will apply for protection from creditors and relieve itself of the guarantees made on Westinghouse's behalf, sources have told the Wall Street Journal.12 A Toshiba official reportedly said the best way to save the company could be a filing under Japan's corporate reorganization law, which is similar to US Chapter 11 bankruptcy protection legislation in that it seeks to allow a company to stay in business by relieving it of some obligations. The Toshiba official said the move could free Toshiba of its obligations to Westinghouse and its customers, including its obligations to provide funding to complete AP1000 reactors under construction in the US.

However a Toshiba spokesperson said: "At this moment, we do not have any thought or intention of seeking protection under corporate-reorganization proceedings."12

The Wall Street Journal reported:12

"A Japanese chapter 11-style filing is only one of several scenarios Toshiba could choose. It presents several downsides: Suppliers could take a hit, hurting the broader economy, and shareholders could be wiped out ‒ though Toshiba's shares are already in danger of being delisted in Tokyo because of accounting problems that emerged in 2015. But the filing would strengthen Toshiba's balance sheet and could allow it to keep its profitable memory-chip business, the Toshiba official said ‒ relieving Japanese government concerns about technology leaks to Chinese or other competitors. A person familiar with Southern's thinking said Japanese creditor banks have significant leverage in deciding what to do with Toshiba, and that their loans would come ahead of other obligations. "We are not first in line," this person said."

Westinghouse and the AP1000 reactors in the US

Westinghouse filed for Chapter 11 bankruptcy protection on March 29, listing assets of US$4.3 billion and liabilities of US$9.4 billion among about 35,000 creditors.13

Westinghouse said on March 29 it would no longer spend money on the Vogtle (Georgia) and Summer (South Carolina) AP1000 projects, but reached an agreement with the utilities involved to allow them to pay costs to continue the projects during a 30-day interim period while decisions on the future of the projects are made. That 30-day period was later extended until May 12 for the Georgia project and June 26 for South Carolina.14

Between April 7 and April 20, about 30 vendors asked Westinghouse to return US$35 million in materials and products ordered for the four reactors in Georgia and South Carolina before the company filed for bankruptcy protection.15 No doubt other vendors have done likewise since April 20. Many Westinghouse suppliers received letters saying that their invoices for work performed or products supplied before the bankruptcy protection filing could not be paid at this time.16

Westinghouse plans to complete a restructuring plan by the end of June 2017 and a new business plan by the end of July 2017. The aim is to ring-fence the four AP1000 reactors. Gavin Liu, Westinghouse's president for Asia, said the "rest of the Westinghouse business, the healthy part, which is new plant construction, fuel, service, decommissioning ‒ we anticipate an ownership change."17 Liu noted that there has been "high interest from the financial community" in the profitable parts of the company's operations.17

Toshiba would like to sell Westinghouse and keep its profitable businesses ‒ but must instead sell profitable businesses to cover the debts from Westinghouse's nuclear projects. Westinghouse, in turn, would like to rid itself of the US AP1000 reactors projects and keep its profitable operations but must instead sell profitable operations to cover debts from the reactor projects.

No amount of ring-fencing will make the AP1000 problems go away. According to Westinghouse, an additional US$4 billion is required to complete the four reactors (US$2.5 billion in Georgia and US$1.5 billion in South Carolina).13 That figure may be an underestimate. Southern Co. CEO Thomas Fanning has said the company needs at least US$3.7 billion needs to complete the two reactors in Georgia ‒ possibly more.18,19

If the additional costs can be kept to US$3.7 billion, Southern Co. hopes that funding from Toshiba will suffice to complete the reactors in Georgia.19 Of course, those hopes could be dashed if Toshiba seeks protection under Japanese corporate reorganization laws.

Southern Co. subsidiary Georgia Power is also trying to convince the Georgia Public Service Commission to allow it to recoup further costs from ratepayers in Georgia, but the Commission appears reluctant.19 Georgian ratepayers have already been paying for the construction of the two AP1000 reactors since 2011, based on provisions of the 2009 Georgia Nuclear Finance Act.20,21

Tax credits and loan guarantees

The AP1000 reactors in Georgia and South Carolina need to be operating by the end of 2020 to be eligible for a US$18/MWh federal production tax credit. For the South Carolina project, the tax credit would amount to a government subsidy of about US$2.2 billion.22 Relaxation of the 2020 deadline for the tax credits is shaping as an important determinant of the future of the four reactors given the receding likelihood of completing the reactors by then. South Carolina Electricity & Gas recently said it is re-evaluating its timeline for completion of the two reactors in that state because of Westinghouse's "historical inability to achieve forecasted productivity and work for efficiency levels" and in light of Westinghouse's bankruptcy filing.23

The extension of the tax credits is "absolutely imperative" to the AP1000 projects and "next-up U.S. nuclear projects" according to David Blee, executive director of the US Nuclear Infrastructure Council.24 However an attempt to include a relaxation of the 2020 deadline in a government spending bill recently failed.25 Congressional leadership is reportedly delaying the issue until lawmakers take up tax reform later this year24 ‒ but that could be too late to save the AP1000 projects. Republican senator Lindsey Graham said: "I'm not going to sit on the sidelines and watch the nuclear industry be destroyed. For three years, we've been trying to get these tax credits extended. ... The reactors that are being built are very much at risk."24

If the Vogtle project in Georgia collapses, the federal government is on the hook for US$8.3 billion in loan guarantees. Ryan Alexander, president of Taxpayers for Common Sense, said:26

"The Title XVII program at the Energy Department provides broad authority for it to guarantee loans for early commercial use of advanced technologies if there is a "reasonable" prospect of repayment by the borrower. Loan guarantees are like cosigning a loan. The government (taxpayers) are on the hook for repayment of the loans if the borrower defaults.

"Building a nuclear reactor – two nuclear reactors – is expensive and risky. The amount of risk represented by a particular loan guarantee is measured in the project's "subsidy cost." The higher the risk, the higher the cost that gets assigned to the guarantee. You would think a loan guarantee for a nuclear power plant – the riskiest project of all – would be assessed a pretty high price. It should have been. But the Energy Department guaranteed at least $6.5 billion of the $8.3 billion total at a cost of $0. That is, it recorded no potential liabilities for its guarantee of more than $6 billion in loans for the construction of two nuclear power plants. ...

"While this might mean huge losses for taxpayers, the real tragedy is that financial entanglement with the project could have been avoided altogether. It's not clear what the Department of Energy can do now to mitigate the potential for losses. In the end, the Vogtle mishap could be a very expensive way to learn what we should have known all along – the federal government cannot ignore risk when taxpayers' money is on the line."

The plan for AP1000 reactors in the UK

NuGen was established in 2009 as a consortium between Engie, Iberdrola, and Scottish and Southern Energy. After various twists and turns, Toshiba had a 60% stake in NuGen and Engie the remaining 40% by the end of 2013. In 2014, NuGen announced plans to build three AP1000 reactors at Moorside, near Sellafield in the UK. But Engie has exercised its contractual right to force Toshiba to buy its 40% stake. Toshiba wanted to sell its 60% stake ... and now wants to sell its 100% stake.

Reactor construction never began and likely never will. In April 2017, NuGen said it has put its application for development consent on hold and is "undertaking a strategic review of its options following shareholder and vendor challenges".27 The consortium has written to suppliers to warn them it will have to cut spending, and also plans to order staff who have been seconded to the project from other companies to return to their employers.28

Toshiba (and the British government and others) are hoping that South Korean utility Kepco will buy a stake in NuGen (Toshiba presumably hopes Kepco will buy its entire 100% stake). Kepco has been considering buying a stake in NuGen for some time, but a deal has not been struck. Kepco may prefer to build its APR1400 reactors rather than Westinghouse AP1000 reactors, which would delay the project by several years: the APR1400 design has not been approved by UK regulators whereas the AP1000 design recently received approval.

Some see Kepco's purported interest in building its own reactor technology as a bargaining chip to use in negotiations. Kepco might agree to build AP1000 reactors ‒ or to be the engineering, procurement, and construction manager of Westinghouse-built AP1000 reactors ‒ on the condition that Kepco supplies expensive items like steam generators, turbines, pumps, and other system components.29

A Hinkley Point-style guaranteed 'strike price' per kilowatt-hour might make the project attractive for Kepco, but still the question remains: where will the capital costs for the three-reactor project ‒ which could amount to US$20 billion or so ‒ come from? One pro-nuclear commentator suggests that the project could be revived with a guaranteed strike price plus UK government-issued bonds covering the capital costs.29 The commentator also recommends following through on BREXIT in order to prevent any challenge under EU legislation to the subsidies required to get the Moorside project off the ground (Austria and others challenged the Hinkley Point subsidies).

NuGen chief executive Tom Samson said in early May that the project faces "significant challenges" and that direct government funding is one option on the table. He said: "We already have tremendous support from the government, we look for all opportunities to secure funding for the Moorside project and the government's involvement is one of those areas we'll continue to explore."27

Plans for AP1000 reactors in India

A. Gopalakrishnan, a former Chair of India's Atomic Energy Regulatory Board, has written an opinion piece in The Hindu strongly criticizing plans to contract Westinghouse to build six AP1000 reactors in India.30

Gopalakrishnan wrote:30

"India must not enter into a contract involving billions of dollars with an American company that has already declared bankruptcy. ... Westinghouse going into bankruptcy causes much larger problems than just the financial consequences. With the bankruptcy filing, no creditors will come forward to lend the approximately $7 billion needed to bankroll the India project in the first phase. During the time of the Barack Obama administration, India had hoped to get a U.S. Export-Import (Exim) Bank loan for the Kovvada project. But with Donald Trump assuming the U.S. presidency and Westinghouse perilously in the red, there is little chance that the new American administration will favourably consider an Exim Bank loan for an Indian nuclear project to be technologically executed by a bankrupt U.S. company. Even if the Trump administration is willing, the project is definitely not in the interest of the people of India.

"From personal contacts, I understand that senior and mid-level Westinghouse managers and technical staff have already started looking for other jobs. The company will find itself hard-pressed to handle the completion of the eight AP1000 reactors for the U.S. and China that it is committed to, let alone competently take on and complete a new two-reactor project in Kovvada. Besides, six-eight years from the start of construction, which competent Westinghouse engineering team will be around to help India start up these reactors and provide periodic assistance thereafter? ...

"In view of these difficulties, it is best to completely keep away from agreeing to purchase the Westinghouse AP1000 reactors. In fact, the current status of world energy technology does not warrant the inclusion and consideration of nuclear power of any kind in the energy basket of our nation."

Dr Vijay Sazawal, a former Westinghouse employee who is now a member of the Civil Nuclear Trade Advisory Committee of the US Department of Commerce, also urged caution.31 He said: "Basically, Westinghouse has backed out of the contracts in place [in the US] and will renegotiate contracts with those utilities which will have to bear previous cost overruns on their projects. So both Westinghouse and a new potential customer like NPCIL in India will have to be very careful in their financial negotiations in order to ensure that Westinghouse does not back out of its legal and financial obligations if it hits a road bump as it has in its four nuclear power plants under construction in the US and China, with all four plants having exceeded their original cost and schedule commitments."


1. 17 April 2017, 'The Westinghouse Bankruptcy: Test for Chinese Investment in US Infrastructure',

2. Tom Hals / Reuters, 3 May 2017, 'Westinghouse, CB&I spar in court over $2 bln merger dispute',

3. Tom Hals and Emily Flitter, 2 May 2017, 'How two cutting edge U.S. nuclear projects bankrupted Westinghouse', and see also

4. World Nuclear News, 24 April 2017, 'Toshiba creates subsidiaries 'to maximise value'',

5. Kana Inagaki, 24 April 2017, 'Toshiba to restructure to protect core businesses',
6. Kana Inagaki, 2 May 2017, 'Brave is the auditor that takes on Toshiba's accounts',
7. Intellasia, 28 April 2017, 'Toshiba plans to replace auditor PwC after earnings impasse',

8. Quentin Webb, 26 April 2017, Unaccountable,

9. BBC, 14 Feb 2017, 'Toshiba chairman quits over nuclear loss',

10. 16 April 2017, 'Toshiba: loses access to unit's cash after hedge fund sues',

11. Leisha Chi / BBC, 16 April 2017, 'Can Toshiba escape the clutches of corporate Japan's zombie hordes?',

12. Takashi Mochizuki, Mayumi Negishi, and Kosaku Narioka, 9 May 2017, 'Toshiba partners brace for possible bankruptcy filing',

13. World Nuclear News, 28 April 2017, 'US industry on tenterhooks over Westinghouse: NEI',

14. Augusta Chronicle, 3 May 2017, 'Too important to fail',

15. Kristi E. Swartz, 20 April 2017, 'Vendors line up to demand returns from Westinghouse',

16. Anya Litvak, 28 April 2017, 'Westinghouse battles trust issues with vendors, customers and employees',

17. Reuters, 28 April 2017, 'Westinghouse says will operate normally in Asia, Europe despite Chapter 11',

18. Power Engineering, 4 May 2017,

19. Kristi E. Swartz, 5 May 2017, 'Tug of war in Ga. over who controls Vogtle's fate',

20. Anne Maxwell, 8 May 2017, 'Georgia Power profits off Plant Vogtle construction despite cost overruns, delays, and contractor bankruptcy',

21. Georgia Watch, 'Protect Georgia Power Customers from Massive Cost Overruns',

22. David Wren, 27 April 2017, 'SCANA exec: Nuclear plant completion could hinge on extension of federal tax credits',

23. World Nuclear News, 8 May 2017, 'Summer plant construction progress continues',

24. Andrew Follett, 5 May 2017, 'Congress Gears Up For Showdown Over Billions In Nuclear Tax Credits',

25. Kristi E. Swartz, 4 May 2017, 'Southern turns to D.C. for help to finish reactors',

26. Ryan Alexander 6 April 2017, 'The High Cost of Ignoring Risk',

27. ITV, 3 May 2017, 'Exclusive: NuGen CEO certain Moorside nuclear development will go ahead',

28. John Collingridge, 30 April 2017, 'Toshiba mothballs Cumbrian nuclear power project',

29. Dan Yurman, 8 April 2017, 'A Modest Proposal to Save NuGen's Moorside Nuclear Project',

30. A. Gopalakrishnan, 31 March 2017, 'Say no to Westinghouse',

31. PTI, 30 March 2017, 'Westinghouse bankruptcy unlikely to impact Indo-US N-deal',