Plans for a new nuclear power station in Cumbria have been scrapped. The Japanese conglomerate Toshiba announced it was winding up the UK unit behind the project.
Toshiba said it would take a 18.8bn Japanese yen (£125m) hit from closing its NuGeneration subsidiary, which had already been cut to a skeleton staff,after it failed to find a buyer for the scheme.
The decision represents a major blow to the government’s ambitions for new nuclear and leaves a huge hole in energy policy. The plant would have provided around 7% of UK electricity.
“This is a huge disappointment and a crushing blow to hopes of a revival of the UK nuclear energy industry,” said Tim Yeo, the chair of pro-nuclear lobby group New Nuclear Watch Institute and a former Tory MP.
Greenpeace UK executive director John Sauven said: “The end of the Moorside plan represents a failure of the government’s nuclear gamble.”
After a board meeting of Toshiba on Thursday, the company said that it was winding up NuGeneration because of its inability to find a buyer and the ongoing costs it was incurring.
The firm has already spent more than £400m on the project.
“Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project, and has resolved to take steps to wind-up NuGen,” the firm said in a statement.
The plant first ran into trouble when Toshiba’s US nuclear unit, Westinghouse, was declared bankrupt last year, leading it to search for a buyer to take the scheme. Toshiba also said it would no longer take forward new nuclear projects overseas.
South Korean energy firm Kepco initially appeared to ride to the rescue, but despite talks with the UK government it later rowed back due to a change of leadership at Kepco and new approach to financing nuclear power in the UK.
Some industry watchers said the collapse of the scheme should be seen as an opportunity rather than a risk, for the UK to prioritise renewables instead.
Jonathan Marshall, an analyst at the ECIU thinktank, said: “Shifting away from expensive, complicated technology towards cheaper and easier to build renewables gives the UK the opportunity to build an electricity system that will keep bills for homes and businesses down for years to come.”
The government’s infrastructure advisers recently urged ministers to rethink their nuclear plans and focus on renewables instead.
But unions decried the axing of the plant and accused the government of not doing enough to help it succeed.
Justin Bowden, the GMB national secretary, said: “The British government has blood on its hands as the final sad but predictable nail is banged into the coffin of Toshiba’s jinxed jaunt into nuclear power.”
Labour said the pullout was a result of government indecision and a refusal to step in.
The only new nuclear power station to get the go-ahead so far is EDF Energy’s Hinkley Point C in Somerset, which started construction in 2016 and is expected to be operational between 2025 and 2027. As well as EDF, Chineseand Japanese firms hope to build further nuclear plants in the UK.
Once NuGeneration is wound up at the end of January, the Moorside site in Cumbria will be handed back to government body the Nuclear Decommissioning Authority.
The Department for Business, Energy and Industrial Strategy said: “We understand that Toshiba have faced a difficult decision in ending their involvement in new nuclear projects outside of Japan in light of their well-known financial challenges.
“All proposed new nuclear projects in the UK are led by private sector developers and while the Government has engaged regularly with the companies involved, this is entirely a commercial decision for Toshiba.”