NEWS
17/01/2019 09:17 GMT | Updated 17/01/2019 13:09 GMT

Hitachi Suspends Work On £16bn Wylfa Nuclear Power Station in Wales

'It raises the very real prospect of a UK energy crisis.'

PA
How the new nuclear power station will have looked 

Plans for a multibillion-pound new nuclear power station have been suspended, delivering a huge blow to the industry.

Japanese firm Hitachi announced it was not continuing with work already under way at Wylfa on Anglesey in North Wales.

The company said it had made “strong progress” on the £16bn project, but had not been able to reach agreement on financing and associated commercial arrangements.

Duncan Hawthorne, chief executive of Hitachi’s nuclear business, 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 co-operation 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.”

Hitachi said it will also suspend work on another site, in Oldbury in Gloucestershire, “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,” said Hawthorne.

“We will begin consultation on the implications immediately with our staff who have shown extraordinary talent, resilience and determination to take this complex and exciting project to this stage.

“We will also engage closely with the many international and UK-based stakeholders who have strongly supported the project’s development, especially our lead host community of Anglesey in Wales, represented by the Isle of Anglesey County Council and Welsh Government, and the key representatives around Oldbury.”

A business department spokesman said: “As the business secretary set out in June, any deal needs to represent value for money and be the right one for UK consumers and taxpayers.

“Despite extensive negotiations and hard work by all sides, the government and Hitachi are unable to reach agreement to proceed at this stage.

“This government is committed to the nuclear sector, giving the go-ahead to the first new nuclear power station in a generation at Hinkley Point C, investing £200 million through our recent sector, which includes millions for advanced nuclear technologies.

“We are also reviewing alternative funding models for future nuclear projects and will update on these findings in summer 2019.”

Hitachi’s move follows a decision by Toshiba not to go ahead with a nuclear power station at Moorside in Cumbria.

Justin Bowden, national officer of 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.”

Reacting to the news, Doug Parr, chief scientist for Greenpeace UK, said: “Hitachi’s confirmation that no solution has been found for its UK nuclear programme 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.

“A clever move now would be for the Government to accept that the nuclear bet didn’t pay off, stop holding back renewables and have an urgent rethink about the future of UK energy.”

An EDF Energy spokesman said its new nuclear power station at Hinkley Point in Somerset was making good progress, and a third round of consultations were under way for a plant at Sizewell in Suffolk, showing that nuclear has a “strong future” in the UK.

A spokesman said: “More than 3,600 people are now working on the construction site at Hinkley Point C and the project is on track.

“The UK policy identifying the need for nuclear to play a role alongside renewables has been supported by numerous independent studies.

“Nuclear provides low-carbon electricity when the wind doesn’t blow and the sun doesn’t shine. It will help lower overall energy costs to consumers as part of a balanced energy mix.”

Sara Medi Jones, acting general secretary of CND, said: “Today’s decision is good news because it opens the door to investment in the renewable technologies of the future, and to leave behind dirty and dangerous nuclear power.

“Hitachi’s decision proves once again that there isn’t an economic case for new nuclear, certainly not when renewables like offshore wind are cheaper sources of energy.”

Justin Bowden, national officer of the GMB union, said: “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.

“It is a basic function of government to guarantee we have enough electricity for our homes and industries and history shows that voters do not forgive or forget when the lights go out.”

Unite official Peter McIntosh said: “Without Wylfa being built, there is no way the country can meet its climate change obligations which it committed to when it signed up to the Paris Agreement in 2016.