Toshiba's UK power arm, NuGen, to be closed by early 2019

Toshiba has abandoned plans to build a new nuclear power station in Moorside, Cumbria, and will wind up its UK power arm, NuGen, in the new year.The announcement on Thursday came as a blow to the UK government's plan to expand electricity generation from new nuclear plants, although the withdrawal by the Japanese conglomerate was not totally unexpected given its current financial problems, particularly in the US.

Toshiba's disastrous purchase of Westinghouse to blame for the Japanese conglomerate's financial woes

"The struggling Japanese engineering firm revealed its NuGen vehicle was to be shut down early next year as part of renewed efforts to shore up its finances following its disastrous acquisition of US nuclear energy firm Westinghouse," reported Sky News."Westinghouse was placed in bankruptcy protection last year amid billions of dollars worth of losses, forcing Toshiba to raise funds by selling off its prized chip-making business. The troubles at Westinghouse, which was due to provide three reactors for the £15 billion Moorside project, prompted a French investor to pull out of NuGen."

Toshiba's latest statement about NuGen and the UK nuclear plant

Toshiba said in a statement, "After considering the additional costs entailed in continuing to operate NuGen, Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project, and has resolved to take steps to wind-up NuGen."Korea Electric Power Corporation (Kepco) had been a preferred bidder to take over the nuclear power plant project, but talks fell through after more than a year of negotiations.“This is a huge disappointment and a crushing blow to hopes of a revival of the UK nuclear energy industry,” said Tim Yeo, a former Conservative minister who chairs pro-nuclear lobby group, the New Nuclear Watch Institute.The Moorside plant had been expected to produce up to seven per cent of Britain's electricity needs and its scrapping leaves EDF Energy’s Hinkley Point C project in Somerset as the only new nuclear plant under construction in the UK. It is expected to be operational between 2025 and 2027.Rebecca Long Bailey, the Labour Party's shadow business secretary, said: "Nuclear energy has an important role in the energy mix as we seek to rapidly decarbonise our energy system. That is why Labour has been consistent in its support for Moorside, calling on the government to take a public stake.

Toshiba's decision not to continue with the Cumbria nuclear energy project has put thousands of UK jobs at risk

"Today's announcement by Toshiba is hugely concerning for the future of the sector and the thousands of jobs it would bring to Cumbria. Unfortunately, it's not surprising given the government's long indecision and refusal to step in."A spokesman for the Department for Business, Energy and Industrial Strategy said: "We understand that Toshiba have faced a difficult decision in ending their involvement in new nuclear projects outside of Japan in light of their well-known financial challenges."All proposed new nuclear projects in the UK are led by private sector developers and while the government has engaged regularly with the companies involved, this is entirely a commercial decision for Toshiba."Nuclear has an important role to play as part of the UK's diverse energy mix as we transition to a low-carbon economy, but in each case projects must provide value for money for consumers and taxpayers."This government remains committed to new nuclear through the Industrial Strategy Nuclear Sector Deal as well as consenting the first new nuclear power station in a generation at Hinkley Point C."For related news and features, visit our Enterprise section.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online Directory

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