The Guardian view on nuclear power: expensive mistakes | Editorial

Hitachi's decision to walk away from two projects, despite hefty subsidies, indicates strongly that the UK's current policies don't add up

The scrapping of three nuclear power station projects in just over two months should prompt immediate and serious thought about the future of energy in this country. Hitachi expects the axing of the Wylfa plant on Anglesey in Wales to cost it 2.14bn. Around 300 people at its UK subsidiary Horizon will lose their jobs along with around 1,000 in the supply chain, and a second Hitachi power station in Gloucestershire will never be built. That another Japanese company, Toshiba, pulled the plug on another nuclear project in Cumbria in November, after trying and failing to sell it, makes the need for a considered response from policymakers all the more pressing.

The problem, in a nutshell, is that the new generation of nuclear power stations is proving too expensive. Hitachi walked away from a package including a guaranteed price for its electricity of 75 per megawatt hour for 35 years, well above the wholesale price of around 50, but still below the 92.50 awarded to EDF Energy for power generated at Hinkley Point C. With the price of offshore wind as low as 57.50 and expected to fall further, and with renewables now supplying 33% of power (up from 6.7% in 2009), the contrast with nuclear is increasingly unflattering, as business secretary Greg Clark acknowledged when he told MPs that nuclear is being "outcompeted".