Westinghouse Electric filed for bankruptcy this week, in a move the New York Times describes as “casting a shadow over the global nuclear industry.”
Westinghouse’s parent company, Toshiba, has been scrambling to cover its losses on a series of nuclear construction projects in the southern U.S. “Now, the future of those projects, which once seemed to be on the leading edge of a renaissance for nuclear energy, is in doubt,” the Times notes.
Analysts blame the bankruptcy in part on “self-inflicted” harm, including a construction business that was supposed to cut costs but ultimately helped precipitate the bankruptcy.
“But some of what went wrong was beyond either company’s control,” the Times contends. “Slowing demand for electricity and tumbling prices for natural gas have eroded the economic rationale for nuclear power, which is extremely costly and technically challenging to develop. Alternative energy sources like wind and solar power are rapidly maturing and coming down in price. The 2011 earthquake in Japan that led to the nuclear disaster at the Fukushima Daiichi plant renewed worries about safety.” (Editor’s note: We’re not seeing anything here that wasn’t foreseeable.)
After writing off its investment in Westinghouse, Toshiba is still expected to declare US$9.9 billion in losses after its fiscal year ends today. “We have all but completely pulled out of the nuclear business overseas,” said President Satoshi Tsunakawa. But Toshiba “still faces tough questions,” the Times reports.
“Its executives have said they would like to sell all or part of Westinghouse to a competitor, but with a dwindling list of potential buyers—combined with Westinghouse’s history of financial calamity—that has become a difficult task,” note reporters Diane Cardwell and Jonathan Soble. “The company is also divesting its profitable semiconductor business and plans to sell a stake to an outside investor to raise capital,” moves that will “further erode Japan’s place in an industry it once dominated.”