Hitachi suspends UK nuclear programme, halts Horizon work at Wylfa Newydd and Oldbury

Horizon Nuclear Power has suspended its UK nuclear development programme, which was to have seen a new plant built at Wylfa Newydd on Anglesey in North Wales, with a second to follow at Oldbury on Severn in South Gloucestershire.
The decision was taken Horizon’s parent company Hitachi, which said, “The decision was made from the viewpoint of Hitachi’s economic rationality as a private enterprise….it is now clear that more time is needed to develop a financial structure for the Horizon Project”.
Hitachi acquired Horizon for £697 million in November 2012. It plans to post an impairment loss and related expenses of approximately £2.4 billion and a further £2.4 billion as extraordinary losses for the year ending 31 March 2019.
Duncan Hawthorne, chief executive of Horizon Nuclear Power said: “We have made very strong progress on all aspects of the project’s development, including the UK design of our tried and tested reactor, supply chain development and especially the building of a very capable organisation of talented and committed people.“We have been in close discussions with the UK government, in cooperation with the government of Japan, on the financing and associated commercial arrangements for our project for some years now.  I am very sorry to say that despite the best efforts of everyone involved we’ve not been able to reach an agreement to the satisfaction of all concerned…. we will take steps to reduce our presence but keep the option to resume development in future.”

Tom Greatrex, chief executive of the Nuclear Industry Association, said: “Wylfa remains a strong site for vital new nuclear power for the UK. It’s regrettable that this project has been suspended, especially as a considerable amount of groundwork has already taken place on the Wylfa project, including creating a supply chain to deliver the project. …The urgent need for further new nuclear capacity in the UK should not be underestimated”.

Justin Bowden, GMB national secretary for energy said: “Hitachi’s announcement, coming so soon after the Moorside fiasco, raises the very real prospect of a UK energy crisis. … This decision has nothing to do with costs. The planned reactor at Wylfa is not the ‘first of a kind’, and this fact – combined with the government stake – would ensure Wylfa was built at a cost much lower than Hinkley Point C currently under construction in Somerset. The government must act and step in now, pick up the reins and take whatever funding stake and leadership is necessary, to ensure Wylfa goes ahead on time.”

Doug Parr, chief scientist for Greenpeace UK, said, ““Hitachi’s confirmation that no solution has been found for its UK nuclear programme despite already spending £2bn on it tells you all you need to know about the economics of nuclear power. In the meantime renewable energy costs, especially offshore wind and solar, have plunged dramatically, while new smart technologies including storage have arrived on the scene.”

Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit said: ”While certainly a setback in the government’s energy plans, Hitachi’s decision to walk away from Wylfa should not cause alarm bells to start ringing. … In recent years government has quietly cut back its expectations for nuclear new build, and that’s looking more and more realistic as the price of renewable generation falls and the benefits of the flexible smart grid become more apparent. Filling the nuclear gap with renewables would indeed require an increase in rollout, but one that is well within UK capabilities.”

 

David Oliver, senior consultant at energy consultancy Inenco, said: The UK must invest in carbon-free generation that can be relied upon whatever the weather, however large storage solutions, hydro-electric projects and tidal lagoons are all extremely expensive options, with long construction times and high risk of overspend – much like new nuclear projects.

This means that small-scale, decentralised generation and storage could play an even more meaningful role in our future energy system, although we would need to avoid the uncertainty that has previously been caused by the removal of benefits and rule changes. We urgently need a Plan B to reduce the risk of lights going out in the next decade and to avoid derailing the decarbonisation process.”

Further reading
New Power’s recent look at the project New Power October 2018 ABWR