Energy crisis as Japan giant scraps £16bn nuclear plant

BRITAIN’S energy strategy has been plunged into crisis after plans to build a new nuclear power station in Wales were ditched.

Japanese firm Hitachi suspended work on its £16billion Wylfa Newydd nuclear plant on Anglesey as costs mounted, it failed to attract new investors and turned down a deal from the Government.

The plant had been due to be completed by the middle of the 2020s, providing around 6 per cent of the country’s electricity – enough to power five million homes. It was expected to create 8,500 jobs during the construction phase and 850 jobs over its 60-year operational lifespan.

Hitachi has also put on hold plans for a nuclear power station at Oldbury in South Gloucestershire.

Duncan Hawthorne, chief executive of Hitachi subsidiary Horizon Nuclear Power which was developing the Wylfa Newydd site, said: ‘Despite the best efforts of everyone involved, we’ve not been able to reach an agreement.’

The GMB union said Hitachi’s announcement – coming so soon after Toshiba abandoned plans in November to develop its Moorside nuclear power station in Cumbria – raised the ‘very real prospect of a UK energy crisis’.

Hitachi had been in financing talks with the Government since June. The Government proposed it would take a one-third stake, would finance all the debt during construction and raised the price it would pay for electricity the plant produced. But this was not enough for Hitachi’s board, which said it will now write-off about £2.2billion it had spent on the project.

Business Secretary Greg Clark told MPs yesterday: ‘I was not prepared to take on a larger share of the equity, as that would have meant taxpayers taking on the majority of construction risk and the Government becoming the largest shareholder with responsibility for the delivery of a nuclear project.’

As Britain’s coal- fired power plants will be shut by the mid-2020s and existing nuclear reactors will wind down in the early 2030s, the Government is now facing questions about how it will plug the gap left by the abandoned power stations, with experts claiming it will be forced to rely on Chinese investment to keep the lights on.

Hinkley Point C in Somerset, which is being built by French firm EDF with Chinese backing, is now the only new nuclear plant under construction. The two remaining new nuclear power stations in the pipeline – Sizewell in Suffolk and Bradwell in Essex – both have Chinese investment.