Government in talks over public financing for Welsh nuclear plant: reports

The UK and Japanese government are in talks with the owner of Horizon Nuclear Power over the possible public financing of the Wyfla Newydd plant it is planning to build in Wales, the Financial Times has reported.

Japanese conglomerate Hitachi is discussing options including government equity, loans and credit guarantees, unnamed sources “briefed on the matter” told the paper.

The talks still have “a long way to go” and could still come to nothing. One person involved with the discussions said any financing from the UK would need to be “off balance sheet” to avoid adding to public debt, although it could involve the government taking a minority share. If the Japanese government provides financial support it is likely to be through loans, they added.

Were the government to take a stake in the plant, it would make a major shift in policy, which has for many years been to avoid the direct financing of nuclear projects.

In the case of Hinkley Point C, it instead offered a guaranteed price for the power produced via the Contracts for Difference scheme, leaving the developers EDF and China General Nuclear Power Corporation (CGN) to bear the construction risk. The Treasury also made available a £2 billion loan guarantee, although EDF has since revealed it will not take up the offer.

The 2.7GW Wylfa Newydd plant on the Isle of Anglesey is being developed by Horizon Nuclear Power, which was bought by Hitachi for £700 million in 2012.

A spokesman for Horizon said: “It is no secret that we are in discussions with the UK government and have been for some time. These discussions are of course complex and while they are ongoing it would be premature and inappropriate for us to comment on the nature of them.”

 “It is too early in the process to comment on specifics of the project, including cost, but we have always understood that in order for us to go ahead we will have to deliver at a competitive price for the government and the consumer. This will continue to be the basic requirement for this project to proceed.”