Hitachi has halted work on its plans for new nuclear plants at Wylfa and Oldbury, sparking fears about the UK’s future energy security and its ability to achieve greenhouse gas reduction targets.
The multi-national announced this morning, following a meeting of its board in Japan, that its UK subsidiary Horizon Nuclear Power will suspend work on the two plants at Wylfa on Anglesey and Oldbury in South Gloucestershire.
The company’s scheme for a new nuclear plant at Wylfa is the most advanced in the UK’s nuclear new build planning pipeline after EDF’s Hinkley Point C power station currently under construction in Somerset.
Hitachi’s UK Advanced Boiling Water Reactor received regulatory approval under the Generic Design Assessment process in December 2017.
The announcement is the second blow to the UK’s nuclear new build programme in three months after Toshiba axed its plans for a power station at Moorside in Cumbria in November.
Duncan Hawthorne, chief executive of Horizon, said “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.
“As a result, we will be suspending the development of the Wylfa Newydd project, as well as work related to Oldbury, until a solution can be found. In the meantime, we will take steps to reduce our presence but keep the option to resume development in future.”
Greg Clark, secretary of state for business and energy, told the House of Commons that while nuclear power still has an “important role” to play in the UK’s future energy mix, it must provide good value for money for taxpayers and consumers.
He said the government had offered to take an equity stake and furnish all of the debt financing for the Wylfa project, which would enable the project’s Contract for Difference (CfD) strike price to be set at £75/MWh.
Responding to the announcement, former energy and climate change secretary Ed Davey said: “The UK will face an energy crunch in the next decade and fall behind on climate change targets if the government just continues to sit on its hands.
“The much cheaper opportunity of renewable power backed up by cutting edge technologies like new-generation batteries, interconnectors and tidal lagoons must now take priority over nuclear.”
Tim Yeo, former chair of the House of Commons Energy and Climate Change Committee, said the suspension of work by Hitachi posed an “existential threat” to the UK’s nuclear industry.
“Equally serious are the implications for climate change because nuclear provides a big promotion of Britain’s low-carbon electricity.
“Unless Britain’s older nuclear plants are replaced soon Britain won’t meet its legally binding emissions reduction targets.”
Yeo, who now chairs the New Nuclear Watch thinktank, urged the government to open urgent discussions with alternative nuclear developers about taking forward the sites at Wylfa and Moorside.
Justin Bowden, national secretary for energy at the GMB union, said: “Hitachi’s announcement, coming so soon after the Moorside fiasco, raises the very real prospect of a UK energy crisis.
“As coal is taken out of the equation in the next few years and the existing nuclear fleet reaches the end of its natural life after 50 years, decisions are already long overdue for construction to be completed in time and not leave the country at risk of power cuts or reliant on imported electricity, much of it from unreliable regimes.
“While the government has had its head up its proverbial backside over Brexit, vital matters like guaranteeing the country’s future energy supply appear to have gone by the wayside.”
Emma Pinchbeck, deputy chief executive of Renewable UK, called on the government to plug the hole emerging in its carbon reduction plans by allowing onshore wind farms to compete in CfD auctions.
But Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit, said the pause in Hitachi’s programme should not set alarm bells 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.”
He said that focusing on the rolling out of a smart grid rather than new build nuclear would enable renewable energy to meet the UK’s electricity needs.
“With enough focus on smart low-carbon energy, there’s no reason why Britain shouldn’t achieve all its energy objectives despite the cancellation of these nuclear stations.”