The Washington Post By Steve Mufson March 29, 2017 Westinghouse, one of the most storied names in the nuclear energy business, filed for bankruptcy, dealing a blow to the nuclear power industry and raising questions about the fate of four reactors under construction in the United States. The filing also ends the marriage of Toshiba and Westinghouse, one of a handful of nuclear contractors left worldwide. When the Japanese giant bought the Westinghouse nuclear business in October 2006, it declared “the dawn of a new era for nuclear energy.” Together, the companies would make a “powerful combination,” Toshiba said. A decade later, that combination has melted down. Toshiba has written off more than $6 billion in losses connected to its U.S. nuclear business, citing accounting problems, delays and cost overruns. And it has pulled back from new nuclear projects under discussion in India and Britain. The collapse of Westinghouse also reverberates through the global nuclear business. Westinghouse had claimed that its new AP1000 model reactor had passive technology and modular design that was safer, cheaper and faster to build. Many U.S. lawmakers and nuclear industry boosters said the AP1000 could augur in a “nuclear renaissance” in the United States. The company is in charge of constructing four of these new model reactors at two sites. The first two are being built by a SCANA-led group at the Virgil C. Summer Nuclear Generating Station, about 20 miles northwest of Columbia, S.C. The other two, backed by Energy Department loan guarantees, are being built at Southern Co.’s Vogtle facility. Yet Westinghouse stumbled at both sites. Currently, the Vogtle project is $1.8 billion, or 29 percent, above budget and three years behind schedule. Angry about the delays and cost overruns, the owners of the nuclear plants filed claims against Westinghouse. A settlement was reached, but the legal battles are likely to restart. “These AP1000s were a much better mousetrap for the nuclear industry,” said Peter Davidson, the chief executive of Aligned Intermediary, an investment advisory firm for climate projects. “It’s sad that there were so many implementation issues and delays. These are more arrows in the side of the large-scale nuclear industry." Based on the above article, clearly identify and explain factors affecting the negative NPV of AP1000 project that brought Westinghouse into bankruptcy.
The Washington Post
By Steve Mufson
March 29, 2017
Westinghouse, one of the most storied names in the nuclear energy business, filed for bankruptcy, dealing a blow to the nuclear power industry and raising questions about the fate of four reactors under construction in the United States.
The filing also ends the marriage of Toshiba and Westinghouse, one of a handful of nuclear contractors left worldwide. When the Japanese giant bought the Westinghouse nuclear business in October 2006, it declared “the dawn of a new era for nuclear energy.” Together, the companies would make a “powerful combination,” Toshiba said. A decade later, that combination has melted down. Toshiba has written off more than $6 billion in losses connected to its U.S. nuclear business, citing accounting problems, delays and cost overruns. And it has pulled back from new nuclear projects under discussion in India and Britain.
The collapse of Westinghouse also reverberates through the global nuclear business. Westinghouse had claimed that its new AP1000 model reactor had passive technology and modular design that was safer, cheaper and faster to build. Many U.S. lawmakers and nuclear industry boosters said the AP1000 could augur in a “nuclear renaissance” in the United States.
The company is in charge of constructing four of these new model reactors at two sites. The first two are being built by a SCANA-led group at the Virgil C. Summer Nuclear Generating Station, about 20 miles northwest of Columbia, S.C. The other two, backed by Energy Department loan guarantees, are being built at Southern Co.’s Vogtle facility.
Yet Westinghouse stumbled at both sites. Currently, the Vogtle project is $1.8 billion, or 29 percent, above budget and three years behind schedule. Angry about the delays and cost overruns, the owners of the nuclear plants filed claims against Westinghouse. A settlement was reached, but the legal battles are likely to restart.
“These AP1000s were a much better mousetrap for the nuclear industry,” said Peter Davidson, the chief executive of Aligned Intermediary, an investment advisory firm for climate projects. “It’s sad that there were so many implementation issues and delays. These are more arrows in the side of the large-scale nuclear industry."
Based on the above article, clearly identify and explain factors affecting the negative
Based on the article, we have to identify the reasons affecting the negative NPV of AP1000 project that brought Westinghouse into bankruptcy.
Step by step
Solved in 4 steps
