PLUS: Speculation mounts Hitachi will pull plug on Wylfa nuclear power station project:
THE FUTURE of the planned Wylfa Newydd nuclear power station on Anglesey is shrouded in uncertainty after Hitachi responded to a report that construction would be suspended by saying that “no formal decision” had been taken.
The Nikkei Asian Review reported that Hitachi plans to put the project on hold because funding negotiations with the UK government have “hit an impasse”.
It claimed that the “deadlock looks set to sink Japan’s last overseas nuclear project”.
Hitachi confirmed it has been assessing the “potential suspension” of the project.
“No formal decision has been made in this regard currently, while Hitachi has been assessing the Horizon Project including its potential suspension and related financial impacts in terms of economic rationality as a private company,” said a spokesman.
“Should any matter arise which needs to be disclosed, Hitachi will announce the information in a timely manner.”
The Financial Times reported: “According to people familiar with financing discussions for the Wylfa plant, a lack of firm investor commitments means Hitachi can no longer keep putting money into the socalled Horizon project and will announce it is to pull the plug at a board meeting next week.”
The development of the nuclear site was expected to be a major source of employment on Anglesey and a boost to the region’s economy. The Welsh Government described the situation as “worrying” and the Prospect trade union warned of the risk of the UK sleepwalking into an “energy security crisis”.
Here is the Welsh Government’s statement: “Reports on Wylfa this morning are worrying. This is a major project with significant economic benefits to Wales and the rest of the country.
“We will continue to monitor the situation very carefully and press the UK government to do everything it can to help bring this project to Anglesey.”
The FT reports that in the negotiations between the UK government and Hitachi a “strike price” – the guaranteed amount that will be paid for power generated at the plant – of “about £75 per megawatt hour” is on the table. Future reactors on the site could have a strike price of just £60.
This is “much lower than the support provided to Hinkley Point C, which had a strike price of £92.50 per MWh”. It is claimed the Treasury is sceptical about Energy Secretary Greg Clark’s idea that the UK government could take a direct stake in the project.
The Nikkei Asian Review reports that “Hitachi had trouble finding corporate investors in Japan” to back the project and that “mounting opposition to May’s government within parliament over Brexit has raised questions about the future of UK nuclear policy”. It says the “suspension will spare Hitachi from shelling out 3bn yen to 4bn yen a month on the plant”.
Horizon Nuclear Power, the subsidiary of Hitachi which is dedicated to developing new nuclear power stations, released the following statement: “Since the Secretary of State’s statement to the House in June 2018 we’ve been in formal negotiations with the UK government regarding financing of the Wylfa Newydd project in a way that works both for investors and the UK electricity customer. This is one of the aspects of the project development phase that must be concluded before construction of Wylfa Newydd can go ahead, but the discussions are commercially confidential and we won’t be commenting on rumours or speculation.”
Hitachi had agreed to take over the Horizon project in 2012 after it was put up for sale by RWE and E.ON. It had been hoped the new plant would have a generating capacity of 2,900 MW by the middle of the next decade.
A spokesman for the Department for Business, Energy & Industrial Strategy said: “Negotiations with Hitachi on agreeing a deal that provides value for money for consumers and taxpayers on the Wylfa project are ongoing. They are commercially sensitive and we do not comment on speculation.”
Opponents of the nuclear power project welcomed the possibility it could be suspended. The campaigning group People Against Wylfa B (PAWB) said in a statement: “Should the news be confirmed at a meeting of the Hitachi Board next week then it will be a relief for all of us who worry about the future of our island, our country, our language, our environment and indeed, renewable energy. PAWB has warned for years that the costs associated with the Wylfa project would be likely to prove fatal to the project, but we were ignored.
“Consequently, millions of taxpayers’ money from the island, Wales and the UK was invested to back Wylfa B. In addition, huge political capital has been invested, and there has been a failure to have a mature public discussion about the project other than in terms of cash and jobs.
“The legacy of this, if the reports from Japan prove to be true, is that over a decade has been wasted on Wylfa, with very little alternative economic planning in evidence. Our young people have been promised jobs on very shaky foundations.
“Good land has been destroyed to create infrastructure to back the project. It is time for politicians and officials from the UK government, the Welsh Government and Anglesey to admit that they were wrong.
“Wales is rich in natural resources which can be used to create a vibrant and sustainable energy future, and above all else create more jobs in less time than Wylfa would have done.”
Dr Doug Parr, Chief Scientist for Greenpeace UK, said: “The government’s energy policy is in tatters, but this is the opposite of a disaster. We could have locked ourselves into reliance on an obsolete, unaffordable technology, but we’ve been given the chance to think again and make a better decision.
“Our urgent, immediate dilemma – how to maintain security of supply whilst cutting carbon – can be solved by making offshore wind, at half the cost of nuclear, the backbone of the new power system. The failure of the old technology is the opportunity the new technologies need, and Britain’s world-leading offshore wind industry’s time has come.”
Champions of tidal energy were disappointed in 2017 when the UK government declined to back plans for the Swansea Bay Tidal Lagoon on economic grounds.
Anglesey was home to a nuclear power station near Cemaes until its closure in 2015 after more than four decades of operations.
The Wylfa B project was thought to have the potential to support 6,000 jobs during the construction process and provide up to 1,000 positions once operational.
Jonathan Bartley, the co-leader of the Green Party, said: “Good to see work on the Wylfa nuclear plant suspended. The whole project should be abandoned. It belongs in the past.”
Hitachi’s announcement comes in the same week that Theresa May met Japanese Prime Minister Shinzo Abe.
Sue Ferns, of the Prospect trade union, was alarmed by the possible suspension of the project.
She said: “This is extremely worrying news, especially coming in the wake of Toshiba’s recent withdrawal from the Moorside project. To lose one major nuclear project is a serious blow, to lose two in six months would set alarm bells ringing about the sincerity of the government’s commitment to new nuclear.
“The government must not sleepwalk into an energy security crisis by allowing these projects to fail.”