French utility Engie has announced that it is selling its 40% stake in the UK’s Moorside nuclear power station project, planned for a site near the reprocessing complex at Sellafield in northwest England.
The Moorside scheme is being developed by NuGen, a joint venture between Engie and Japanese engineer Toshiba. As part of the agreement that set up NuGen, Engie had the option to sell its stake before work began.
Engie issued a statement saying the plan to build three Westinghouse AP1000 reactors at Moorside was "facing some significant challenges which have led Engie to exercise its contractual rights in view of transferring its 40% shares to Toshiba".
The company added that it was "willing to put its know-how and expertise at the service of NuGen and help any restructuring with new potential partners for the development, construction and operation of the project".
Toshiba paid around $140m for Engie’s share of the company.
The French company’s move was not unexpected. Although it operates a fleet of nuclear power stations in France and Belgium, it has been moving towards wind and solar.
Isabelle Kocher, the company’s chief executive, told Paris Match last month that the company was planning to invest €15bn in businesses connected with "energy transition" with the aim of becoming the leading renewables company in France over the next three years.
However, its decision puts Toshiba in a difficult position. The Japanese company is struggling to deal with the fall-out from the collapse of Westinghouse, its US subsidiary and the maker of the AP1000 reactor. Westinghouse filed for Chapter 11 protection from its creditors on 29 March.
Toshiba announced during its results presentation in February that its losses from the Westinghouse debacle, and lower demand for nuclear power, may reach $6.3bn. It added that in light of this, it would look to sell its stake in Moorside, and would not take on any of the construction risk for building it.
Toshiba and the UK government will now look for companies around the world willing to take on all or part of NuGen. The most likely buyer is Korea Electric Power, which has previously indicated an interest in taking a stake in the west Cumbrian plant. Greg Clark, the UK’s business secretary, is presently in Seoul to discuss a deal with the Korean government.
Moorside was seen as an important element of the UK’s future energy strategy, and was expected to make up 8% of the UK’s future installed capacity. Â
Image: Moorside will be located by the Sellafield nuclear estate (Creative Commons)