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You can try to sugar coat it if you like, and I know the industry isn't to blame, but ~9 billion in losses from investing in nuclear power is not something you

You can try to sugar coat it if you like, and I know the industry isn't to blame, but ~9 billion in losses from investing in nuclear power is not something you can close you eye and pretend isn't happening (despite Toshiba clearly trying to do so). I'm willing to bet we see a big change in the nuclear industry come out of this.

Spooky23 9y ago
How is the industry not to blame? The nuclear facility fueling and maintenance business is a profitable, but dying business, as most of the nuclear plants are aging out. It's sort of like being the most profitable mainframe vendor -- not very relevant. To make money on nuclear, you need to build more facilities to replace the declining stock, and Westinghouse/Toshiba cannot seem to manage doing that anymore given the market conditions. End of the day, these big nuclear plants are an albatross. The capital investments required to build them are too big to survive without heavy ratepayer subsidies in an era where energy prices are volatile. In New York, energy ratepayers are plowing a half billion a year into direct subsidy of a few plants because they are uncompetitive compared to gas and hydro for meeting base demand and wind/solar for peak demand.
- Cyph0n 9y ago
  The Middle East and especially the Gulf states are becoming quite interested in nuclear power. The UAE actually has a nuclear power plant that will be entering operation soon. I believe it was built by South Korea.
  - Retric 9y ago
    The seasonal plus day vs night demand curves in the Gulf states is a relatively poor fit for nuclear power. They can add a few, but it's not a great opportunity for long term business.
    - Cyph0n 9y ago
      Isn't that the case everywhere though? That is, day vs night demand. In the UAE, air conditioning is on day and night for at least 6 months, so seasonal demand shouldn't be an issue imo. Power grid load is also quite straightforward to predict too as far as I heard.
      - Retric 9y ago
        The problem is you need to compare the absolute minimum demand at night if the off season vs the absolute peak during the day time to find your base load demand vs peak demand. AC usage at night drops off dramatically during the cool pars of the year and is very weather dependent so the peak vs minimum shift is more dramatic than usual.
  - Spooky23 9y ago
    Gulf States like the prestige and are practically drowning in cash. Since they are totalitarian regimes, it's pretty easy for the guy or guys running the show to direct money to whatever they want.
    - Cyph0n 9y ago
      True, but setting this up has been a huge investment. In addition to building the plant itself, the government has sent hundreds of students to study abroad (fully funded, with salary and benefits!). Once they come back, they are required to go through almost a year of intensive training. My friend is going to be a reactor operator, so I'm familiar with the details. It sounds like a weird way to spend money for fun in my opinion. The only other explanation is that they actually need this. Keep in mind that power generation in the UAE is nearly 100% oil-based.
      - treebeard901 9y ago
        > It sounds like a weird way to spend money for fun in my opinion. Considering the geopolitical aspects of nuclear power along with dual use knowledge and technology, it is probably not a weird way to spend money from their perspective.
        Cyph0n 9y ago
        I agree completely, but I was responding to OP's claim that the Gulf states are building nuclear power facilities because they can.
  - dreamcompiler 9y ago
    They're also investing very heavily in renewables. They want to remain energy-independent when the oil runs out or becomes too cheap to sell.
skolos 9y ago
Not sugar coating, but many companies survived bigger losses without changing what they do. Here are some examples: - Microsoft lost around 8 billion on Nokia - BP lost 60 billion on oil spill
- DamnYuppie 9y ago
  Those are large losses by companies who had much larger cash reserves, net income, and market caps. As such they do not appear to me to be apples to apples comparisons.
- pavlov 9y ago
  Microsoft's loss was mostly not an operational loss, but an accounting adjustment known as a writedown. They paid X billion dollars for an asset (Nokia's devices unit). The asset was recorded as being worth X billion dollars on Microsoft's balance sheet (this is called "goodwill" -- the value is what they paid, not an objective assessment). When they shut down the unit, that asset obviously ceased to have any value, and all the goodwill that was on the balance sheet materialised as a loss. But in fact the money had been paid out years earlier (when the acquisition completed), so at this point the loss was only on paper. It's sort of like if you pay $400 for an Apple Watch assuming you'll be using it all the time to improve your health. Two years later, you still haven't gone to the gym and you find the watch collecting dust in a drawer, so you must admit to yourself that the device was not an investment and your $400 were lost.
  - mholmes680 9y ago
    Toshiba/Westinghouse is a writedown as well https://www.forbes.com/sites/rodadams/2017/02/14/toshiba-chairman-resigns-after-company-announces-6-3-billion-writedown/#600e0d9229fc https://www.forbes.com/sites/rodadams/2017/02/14/toshiba-cha...
  - azinman2 9y ago
    You're forgetting the watch was $400 worth of fun for a while :)

Spooky23 9y ago

How is the industry not to blame? The nuclear facility fueling and maintenance business is a profitable, but dying business, as most of the nuclear plants are aging out. It's sort of like being the most profitable mainframe vendor -- not very relevant. To make money on nuclear, you need to build more facilities to replace the declining stock, and Westinghouse/Toshiba cannot seem to manage doing that anymore given the market conditions. End of the day, these big nuclear plants are an albatross. The capital investments required to build them are too big to survive without heavy ratepayer subsidies in an era where energy prices are volatile. In New York, energy ratepayers are plowing a half billion a year into direct subsidy of a few plants because they are uncompetitive compared to gas and hydro for meeting base demand and wind/solar for peak demand.

Cyph0n 9y ago
The Middle East and especially the Gulf states are becoming quite interested in nuclear power. The UAE actually has a nuclear power plant that will be entering operation soon. I believe it was built by South Korea.
- Retric 9y ago
  The seasonal plus day vs night demand curves in the Gulf states is a relatively poor fit for nuclear power. They can add a few, but it's not a great opportunity for long term business.
  - Cyph0n 9y ago
    Isn't that the case everywhere though? That is, day vs night demand. In the UAE, air conditioning is on day and night for at least 6 months, so seasonal demand shouldn't be an issue imo. Power grid load is also quite straightforward to predict too as far as I heard.
    - Retric 9y ago
      The problem is you need to compare the absolute minimum demand at night if the off season vs the absolute peak during the day time to find your base load demand vs peak demand. AC usage at night drops off dramatically during the cool pars of the year and is very weather dependent so the peak vs minimum shift is more dramatic than usual.
- Spooky23 9y ago
  Gulf States like the prestige and are practically drowning in cash. Since they are totalitarian regimes, it's pretty easy for the guy or guys running the show to direct money to whatever they want.
  - Cyph0n 9y ago
    True, but setting this up has been a huge investment. In addition to building the plant itself, the government has sent hundreds of students to study abroad (fully funded, with salary and benefits!). Once they come back, they are required to go through almost a year of intensive training. My friend is going to be a reactor operator, so I'm familiar with the details. It sounds like a weird way to spend money for fun in my opinion. The only other explanation is that they actually need this. Keep in mind that power generation in the UAE is nearly 100% oil-based.
    - treebeard901 9y ago
      > It sounds like a weird way to spend money for fun in my opinion. Considering the geopolitical aspects of nuclear power along with dual use knowledge and technology, it is probably not a weird way to spend money from their perspective.
      - Cyph0n 9y ago
        I agree completely, but I was responding to OP's claim that the Gulf states are building nuclear power facilities because they can.
- dreamcompiler 9y ago
  They're also investing very heavily in renewables. They want to remain energy-independent when the oil runs out or becomes too cheap to sell.

skolos 9y ago

Not sugar coating, but many companies survived bigger losses without changing what they do. Here are some examples: - Microsoft lost around 8 billion on Nokia - BP lost 60 billion on oil spill

DamnYuppie 9y ago
Those are large losses by companies who had much larger cash reserves, net income, and market caps. As such they do not appear to me to be apples to apples comparisons.
pavlov 9y ago
Microsoft's loss was mostly not an operational loss, but an accounting adjustment known as a writedown. They paid X billion dollars for an asset (Nokia's devices unit). The asset was recorded as being worth X billion dollars on Microsoft's balance sheet (this is called "goodwill" -- the value is what they paid, not an objective assessment). When they shut down the unit, that asset obviously ceased to have any value, and all the goodwill that was on the balance sheet materialised as a loss. But in fact the money had been paid out years earlier (when the acquisition completed), so at this point the loss was only on paper. It's sort of like if you pay $400 for an Apple Watch assuming you'll be using it all the time to improve your health. Two years later, you still haven't gone to the gym and you find the watch collecting dust in a drawer, so you must admit to yourself that the device was not an investment and your $400 were lost.
- mholmes680 9y ago
  Toshiba/Westinghouse is a writedown as well https://www.forbes.com/sites/rodadams/2017/02/14/toshiba-chairman-resigns-after-company-announces-6-3-billion-writedown/#600e0d9229fc https://www.forbes.com/sites/rodadams/2017/02/14/toshiba-cha...
- azinman2 9y ago
  You're forgetting the watch was $400 worth of fun for a while :)