The rapidly-evolving nuclear power crisis escalated dramatically yesterday when US nuclear giant Westinghouse, a subsidiary of Japanese conglomerate Toshiba, filed for bankruptcy.

The Chapter 11 filing took place in the US Bankruptcy Court for the Southern District of New York in New York City.

Westinghouse and its parent Toshiba are in crisis because of massive cost overruns building four ‘AP1000’ nuclear power reactors in the southern US states of Georgia and South Carolina.

The combined cost overruns for the four reactors now amount to about $1.2 billion and counting. And it has now emerged that they may never be finished at all. Whether the four reactors will be completed is now subject to an “assessment period”, according to Westinghouse.

The corporate mishap may also signal the end of new nuclear power in the US. No other reactors are under construction in the country and there is no likelihood of any new reactors in the foreseeable future. The US reactor fleet is one of the oldest in the world, with 44 out of its 99 reactors having been operated for four decades or more.

A $10 billion financial hole – and it’s getting deeper!

Toshiba says Westinghouse had debts totalling US$9.8 billion. Plans for new Westinghouse reactors in India, the UK and China are in jeopardy and will likely be cancelled. Bloomberg noted yesterday: “Westinghouse Electric Co., once synonymous with America’s industrial might, wagered its future on nuclear power – and lost.”

The same could be said about Toshiba, which is selling profitable businesses to stave off bankruptcy. Toshiba said yesterday it expects to book a net loss of $9.1 billion for the current fiscal year, which ends on Friday – a record loss for a Japanese manufacturer.

That projected loss is also well over double the estimate provided just last month, raising investor fears that the final figure may be greater still. “Every time they put out an estimate, the loss gets bigger and bigger”, said Zuhair Khan, an analyst at Jefferies in Tokyo. “I don’t think this is the last cockroach we have seen coming out of Toshiba.”

The BBC noted that Toshiba’s share-price has been in freefall, losing more than 60% since the company first unveiled the problems in December 2016. Toshiba president Satoshi Tsunakawa said at a news conference yesterday: “We have all but completely pulled out of the nuclear business overseas.”

Westinghouse is the major member of the Nugen consortium that’s set to build a massive three-reactor AP1000 nuclear complex at Moorside in the UK, next to the Sellafield site. The company has already stated that while it intends to progress the project through planning stages, it is unable to take on financing or construction and intends to sell its share.

Nugen’s other member, the French energy company Engie (formerly GDF Suez) has also gone on record as wanting to extricate itself from the Moorside project in favour of the ‘new energy’ economy based on renewable, storage and smart grid technologies.

It’s now looking increasingly probable that the Moorside project, given the state of the Nugen consortium and the massive failure of the AP1000 design, may never progress to construction.

The good news for the nuclear industry? The UK’s Office of Nuclear Regulation (ONR) today – with impeccable timing – accepted the AP1000 design as “suitable for construction in the UK“ and issued Westinghouse a Design Acceptance Certificate.

Is the nuclear game up at last?

A similar crisis is unfolding in France, which has 58 power reactors but just one under construction. French ‘EPR’ reactors under construction in France (Flamanville) and Finland are three times over budget – the combined cost overruns for the two reactors amount to about €12.7 billion and counting.

The French government is selling assets so it can prop up its heavily indebted nuclear utilities Areva and EDF. The French nuclear industry is in its “worst situation ever” according to former EDF director Gérard Magnin.

Meanwhile a simple comparison of decommissioning provision between France and Germany indicates that EDF has massively under-budgetted for its liabilities. Germany has set aside €38 billion to decommission its 17 nuclear reactors (€2.2 billion each), but France has set aside only €23 billion to decommission its 58 reactors (€0.4 billion each).

When the real costs, for which EDF will be liable, come in, they could easily bankrupt the company. This in turn puts the UK’s Hinkley Point double EPR nuclear project, in which EDF is the main partner, in doubt.

The crisis-ridden US, French and Japanese nuclear industries account for half of worldwide nuclear power generation. Other countries with crisis-ridden nuclear programs or nuclear phase-out policies account for more than half of worldwide nuclear power generation.

Meranwhile renewable energy generation doubled over the past decade and strong growth, driven by sharp cost decreases, will continue for the foreseeable future.

Dr Jim Green is the national nuclear campaigner with Friends of the Earth Australia and editor of the Nuclear Monitor newsletter.