Westinghouse declares bankruptcy; what does this mean for nuclear power in the US?

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Westinghouse, one of the most storied names in the nuclear energy business, filed for bankruptcy on Wednesday, dealing a blow to the future of the nuclear power industry and leaving question marks about the future of four reactors currently under construction in the United States.

The filing also brings to an end the marriage of Westinghouse and Toshiba. When the Japanese giant - maker of everything from medical devices to home appliances - 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.

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The collapse of Westinghouse also reverberates through the global nuclear business. Westinghouse supplied the world’s first commercial pressurized water reactor 60 years ago and half the world’s 430 nuclear power reactors have Westinghouse technology.

Moreover, 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 officials say the AP1000 could augur in a “nuclear renaissance” in the United States.

Westinghouse is currently in charge of construction of four of these new model reactors at two different sites. The first two are being built by SCANA at the Virgil C. Summer Nuclear Generating Station, a site about 20 miles northwest of Columbia, S.C. The other two, backed by Energy Department loan guarantees, are being built at the site of Southern Co.’s existing Vogtle facility.

Yet Westinghouse ran into trouble on both sites. Though the AP1000 was supposed to be a standard design, changes were made in South Carolina. Moreover, Westinghouse plans included modules built in Lake Charles, La. that were supposed to fit together “like pieces of Lego,” said a former regulator. But Nuclear Regulatory Commission files say that the Lake Charles plant was shipping faulty modules, forcing Westinghouse to reweld them at the reactor sites. An entire extra building was erected to do the welding because there was so much of it, according to one person familiar with the construction.

Angry over the delays and cost overruns, the owners of the nuclear plants filed claims against Westinghouse. A settlement was reached, but now the legal battles will begin again.

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