Hitachi May Scuttle UK Nuclear Project

Hitachi may cancel its plans for a $20.5 billion nuclear power project in Wales, according to several media reports from the UK and Japan. The Japanese company is expected to determine the fate of the project at a board meeting this week.

The Guardian newspaper was among those that in recent days reported an impasse in talks among Hitachi, UK officials, and the Japanese government regarding financing for the plant would likely lead to a cancellation. Hitachi already has spent about $2.6 billion on the project.

The Nikkei Asian Review on Jan. 11 reported that Hitachi's board this week would likely move to suspend all work on the Wylfa Newydd plant. The power station on Anglesey, an island on the north coast of Wales, was first proposed in 2009 as a 3,000-MW plant with two advanced boiling water reactors. Horizon Nuclear Power, a joint venture of E.ON and RWE, was behind the project. Hitachi bought the venture in 2012.

Two earlier 490-MW reactors at the Wylfa site, known as Reactor 1 and Reactor 2, became operational in 1971. Reactor 2 was shut down in 2012 and Reactor 1 was closed in December 2015.

Hitachi in a statement Friday said suspending the project is an option, though it added that news reports in Japan were not "based on Hitachi's decision or disclosed information. 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."

Hitachi, the Japanese government, and UK officials have been negotiating to establish a guaranteed price of power from Wylfa Newydd, along with the potential of a UK public stake of more than $6 billion in the reactors.

Economic Concerns

A statement from the Welsh government said, "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."

Unions that could supply workers for the project said the prospect of Wylfa Newydd being canceled was of deep concern. Union spokespeople, including Peter McIntosh, national officer for energy at the union Unite, told the BBC they are worried about the UK's commitment to nuclear power.

"Government must take action now, because if the project does not proceed, it will have a devastating impact on the Welsh economy and on the UK's ability to meet its climate change obligations," McIntosh said. Unions also are concerned because news of Hitachi's possible suspension of the Wylfa project comes just two months after Japan's Toshiba ended its Moorside project, a new nuclear plant planned in Cumbria. Toshiba said it was dropping the project after it could not find a buyer.

The Moorside project is not dead, though; on Jan. 13, a group of local officials, including what ITV News called "members of the nuclear industry," said they would lobby the British government to back the nuclear development. They said they have assurances from government officials that the project remains viable and that there is still interest from foreign nuclear companies in the project.

Only one new nuclear power station, EDF Energy's Hinkley Point C in Somerset, is under construction in the UK. EDF, a French company, and Chinese firm CGN both have said they want to develop more UK projects.

Months of Negotiations About Wylfa Project

British officials have been negotiating with Hitachi about the Wylfa project since June 2018. Japanese Prime Minister Shinzo Abe and UK Prime Minister Theresa May, who met at May's London office on Jan. 10, said their talks did not involve the plant's future.

Said Abe last week: "On the Horizon nuclear power plant project, this is a project which is of strategic importance for both nations. I do understand that stakeholders including Hitachi are currently discussing this matter and I will wait until they come to a conclusion. We did not touch upon this issue in our summit meeting today."

May said, "This is a commercial decision for [Hitachi], we have been working with them, but it will be a commercial decision for the company."

BBC News on Jan. 12 reported that a spokesman for the British government's Department for Business, Energy and Industrial Strategy said, "Negotiations with Hitachi on agreeing [to] 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."

The BBC said Welsh officials are concerned about the economic impact of the project's cancellation. The country's former first minister, Carwyn Jones, told the BBC he worries whether "this is a case of the UK government being so focused on Brexit that they are not focused on other issues. And there are bread and butter issues that are hugely important for people living on Anglesey."

Several citizens' groups have been against the Wylfa project, saying the UK should focus on renewable energy resources. The UK has looked at building new nuclear plants to help replace generation as the country moves to close coal-fired units. It also has discussed renewables, including large-scale offshore wind farms.

Japan in recent years has hoped to export its nuclear technology after the Fukushima disaster in 2011 closed all of the nation's reactors. Only a few reactors have restarted in Japan, in part due to much-stricter regulatory and safety standards for plant operators.

-Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).

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