UK Edition
Hitachi weighs pulling out of Welsh nuclear power plant
Hitachi may pull the plug on its £21.8bn Horizon nuclear power project at Wylfa, throwing Government plans to replace the UK's ageing coal-fired power stations into disarray.
The Japanese firm will make a decision on the scheme at a board meeting next week following a dispute with the Government over funding, the Nikkei newspaper reported.
Hitachi said no formal decision had been made while it considered its "potential suspension and related financial impacts in terms of economic rationality".
An unnamed company executive told the Nikkei the project was not being abandoned entirely and could be restarted.
The Department of Business spokesman said negotiations with Hitachi on the Wylfa project were ongoing.
Hitachi could take a special loss of up to 300bn yen (£2.2bn) if it abandons Wylfa.
Late last year Toshiba said it planned to wind up its UK nuclear division after failing to find a buyer, potentially dashing hopes for a £15bn nuclear power station to be built at Moorside in Cumbria.
Toshiba tried to offload the project after being financially battered by the collapse of its Westinghouse nuclear business in the US last year.
A withdrawal by both Hitachi and Toshiba would leave EDF the sole builder of a new nuclear power station in the UK, at Hinkley Point.
That project has been mired in controversy about its cost to consumers and construction delays.
The 3.2GW plant was expected to start delivering power to the national grid in 2025 but could now be delayed to 2027 - a decade after the first start date proposed by the French state-owned firm.
It is hoped Hinkley would provide as much as 7pc of the UK's energy.
Deepa Venkateswaran, an analyst at Sanford C Bernstein in London, said ministers had been criticised for the high price it agreed to pay for electricity produced by EDF at Hinkley Point C.
That meant there was "a lot of pressure” to reduce the cost of building other new nuclear stations and Hitachi may not have been able to extract the Government financial support it needed, she said.
The Government may have to consider new ways of enticing private developers to back new nuclear projects in the UK, if it is upgrade rapidly aging fossil fuel reactors, experts said.
Tom Greatrex, chief executive of the Nuclear Industry Association, said: "Wylfa is a strong site, with local support and the Horizon project would deliver 60 years of reliable, secure, low carbon power for homes, businesses and public services.
"With a strike price much below any offshore wind project generating power now, and the prospect of future strike prices equivalent to the lowest offshore wind auction bids, it is imperative that new nuclear at this site goes ahead.”
Sue Ferns, deputy general secretary of the Prospect union, said losing Wylfa as well as the Moorside project would "set alarm bells ringing".
"New nuclear is of significant strategic importance for the country, the Government must not sleepwalk into an energy security crisis by allowing these projects to fail one by one," she said.
However, Greenpeace UK welcomed the news.
"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," said Doug Parr, its chief scientist.
"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."
On a visit to the UK this week, Japanese prime minister Shinzo Abe said the Wylfa project was of “strategic importance” for both nations but it was not discussed when he met Theresa May.
Mrs May said at a joint press conference in Downing Street on Thursday that it would be a “commercial decision” for Hitachi.