Hitachi announced today it will end its business operations on the Wylfa Newydd nuclear power plant construction project, which it had suspended in January 2019 "because it was clear that further time was needed to decide on a financing structure". Horizon Nuclear Power, the UK project developer that Hitachi acquired in November 2012, said it will now take steps for the "orderly closing down" of all its current development activities, but will "keep the lines of communication open" with government and other key stakeholders regarding future options at both its sites, which in addition to Wylfa Newydd on Anglesey, include Oldbury on Severn in South Gloucestershire.The proposed UK ABWR project at Wylfa (Image: Horizon Nuclear Power)
Hitachi said it had made the decision to exit the project given that 20 months had passed since the suspension, and the investment environment had become "increasingly severe" owing to the impact of COVID-19.
The Horizon Project was to develop two UK Advanced Boiling Water Reactor (ABWR) units at Wylfa Newydd in North-West Wales, with the intention to develop Hitachi's nuclear business in the UK and contribute to the energy policy of the UK government, as well as maintaining the business foundation that supports the nuclear industry in Japan, Hitachi said.
It had decided to suspend the project in January 2019, from the viewpoint of its "economic rationality as a private company" because it was clear that further time was needed to decide on a financing structure for the project, and the conditions for building and operating the nuclear power plants.
Hitachi said it would coordinate with the UK government and relevant organisations regarding its cooperation as the owner of the ABWR licence and the handling of the planned construction sites and other matters. This decision is not expected to have a significant impact on Hitachi's business results as Hitachi had posted an impairment loss and other expenses of JPY294.6 billion (USD2.8 billion) on consolidated financial results for fiscal 2018, the year ending 31 March, 2019 due to the suspension of the project.
"Hitachi expresses its deepest gratitude to the UK government, the Wales government and residents, the Japanese government and other stakeholders for their continued support and cooperation. Hitachi will continue to contribute to improve social, environmental and economic value and people's quality of life through its Social Innovation Business, including the energy business," the Tokyo-headquartered company said. Its Social Innovation Business combines information technology, operational technology and products.
Since the project was suspended, Gloucester-based Horizon said it had "maintained the capability to remobilise" in the event that a new financing model was re-established. This includes more than 10 years of stored project data and knowledge, applications for permits and licences and a small core team of staff and contractors.
Horizon CEO Duncan Hawthorne said Wylfa Newydd and Oldbury were "highly desirable" sites for new nuclear build and that Horizon would do its "utmost" to facilitate the prospects for development, which would bring "major local, national and environmental benefits that nuclear can uniquely deliver as we push to transition to a net-zero carbon economy by 2050".
Hawthorne said in August that Horizon wanted clarity from government on its nuclear strategy and a potential funding model by the autumn, when ministers had been expected to publish a delayed energy white paper and national infrastructure strategy. If sufficient commitment isn’t forthcoming, Hawthorne conceded it would be "easy" for Hitachi to "say we're out of here" and sell the site, "raising fears China General Nuclear could potentially move in", according to his interview with the Financial Times.Urgent need for progress
Tom Greatrex, CEO of the UK's Nuclear Industry Association, said today's announcement was disappointing news that "nevertheless underscores" the urgent need for progress on new nuclear projects in the UK if the government's net-zero by 2050 target is to be achieved.
Greatrex said: "Wylfa is probably the best site in the UK for new nuclear capacity, and has strong community and stakeholders support on Ynys Mon [Welsh for Anglesey]. It is imperative that a way forward is found for the site, to deliver thousands of jobs, hundreds of apprenticeships and millions of pounds of investment into an economic boost for the area while delivering secure, reliable and low-carbon power to underpin the UK's transition to net zero."
No electricity generation source had avoided as many carbon dioxide emissions as nuclear power has, "while generating skilled, stable and long-term employment", he said. “The government can secure these economic and environmental opportunities for future generations by setting out a clear pathway for new nuclear power in forthcoming policy announcements."
The country's sole nuclear new-build project - the twin-EPR Hinkley Point C, in Somerset - is being funded by the French utility EDF and its partner in the project, China General Nuclear Power Corp (CGN), with a contract-for-difference already agreed with the previous UK government to provide long-term price stability for the generator once the plant begins generating (but leaving construction and operating risk with the investors). The regulated asset based model that is being considered would apply to future plants, of which as many as five had been planned - by EDF Energy together with CGN; Horizon; and NuGeneration (NuGen).
EDF and CGN plan to develop projects to build new plants at Sizewell in Suffolk and Bradwell in Essex, the latter using Chinese reactor technology, the HPR1000.
Hitachi-GE's UK ABWR completed the Generic Design Assessment process with UK regulators in December 2018. The ABWR design is already licensed in Japan and the USA. Four units have been built in Japan and two are currently under construction on Taiwan. The two ABWR units Horizon planned to build at Wylfa Newydd would have been the first commercial boiling water reactors in the UK.Supply chain
Unlike state-owned EDF Energy and CGN, the other UK new nuclear developers - Horizon Nuclear Power and NuGen - are private investor vehicles. Established in 2009 and acquired by Hitachi in November 2012, Horizon aimed to provide at least 5.4 GWe of new capacity, expecting the first unit at Wylfa Newydd to be operating in the first half of the 2020s. NuGen, the UK joint venture between Japan's Toshiba and France's Engie, planned to build a nuclear power plant of up to 3.8 GWe gross capacity at Moorside, in West Cumbria, using AP1000 nuclear reactor technology provided by Westinghouse Electric Company, a group company of Toshiba. In November 2018, Toshiba - by then the sole owner of NuGen - announced it was withdrawing from the new-build project, and NuGen was wound up.
The Moorside site itself, which NuGen bought from the UK Nuclear Decommissioning Authority in 2009, remains designated by government for nuclear new build. In June this year, a group of companies, trade unions and individuals launched an initiative to develop a Clean Energy Hub centred on a package of nuclear projects at Moorside, in north-west England. The proposal is based on projects including a new 3.2 GWe UK EPR plant, as well as small modular reactors and advanced modular reactors, with links to technologies including renewables and hydrogen production.
In July, a group of 32 companies and organisations from the UK nuclear supply chain announced they had formed a consortium to encourage the government to support a state-guaranteed financing model for Sizewell C, EDF and CGN’s proposed new nuclear power plant on the Suffolk coast.
The Sizewell C Consortium said today's news of Hitachi's withdrawal from the Horizon project would have "serious ramifications" for companies both in Wales and across the UK.
"The Wylfa nuclear project would have been another important milestone for the UK’s nuclear supply chain and would have created thousands of jobs. Unless Sizewell C, a replica of the under-construction Hinkley Point C, is given the go-ahead, there is now a serious risk to the future of the UK's civil nuclear construction capability and the tens of thousands of jobs that go with it."
Researched and written by World Nuclear News