Toshiba Corporation announced Thursday that its U.S.-based wholly-owned subsidiary would withdraw from a nuclear project to construct two advanced boiling water reactors in the U.S. state of Texas, citing fallen electricity rates, and tighter regulation of nuclear power plants.
Toshiba Nuclear Energy Corporation had in March 2008 entered into an agreement with American energy provider NRG Energy Inc. to establish an advanced boiling water reactor company, which subsequently became Nuclear Innovation North America LLC (NINA), a statement from the company said.
NINA, in February 2009, became the main contractor for developing South Texas Project Units 3 and 4, after signing an engineering, procurement and construction agreement with STP Nuclear Operating Company, a non-profit company acting as NINA's agent.
'However, the economic circumstances supporting the project have since declined, as a result of significant decreases in electricity rates due to the shale gas revolution, and the trend to tighter regulation of nuclear power plants in the aftermath of the Great East Japan Earthquake [in March 2011],' Toshiba explained.
Under current economic conditions, further development of the third and fourth units 'has ceased to be financially viable,' it said, adding maintaining the project incurred continuous costs, and no investors had expressed an interest in participation.
'In these circumstances, there is no clear pathway to securing profitability and Toshiba has decided to completely withdraw from the project,' the statement said.
The decision to withdraw was taken under Toshiba’s policy of eliminating risk from construction-related cost overruns in overseas nuclear power plant projects, it added.
On March 11, 2011, a massive 9.1-magnitude quake hit 231 miles northeast of Tokyo, triggering tsunamis, which hit the Fukushima nuclear power plant, melting its three reactors. The plant is set to be fully decommissioned by 2021.
The largest earthquake to hit Japan left nearly 22,000 people dead, and some 2,500 others missing, according to Japan's Fire and Disaster Management Agency.
By Hale Turkes
Anadolu Agency
energy@aa.com.tr