Hitachi is talking to the UK government about resurrecting plans for a nuclear power plant in north Wales, which were frozen at the start of last year.
Horizon Nuclear Power, a UK-based subsidiary of Hitachi, has been holding “detailed conversations” with the government in recent weeks to persuade ministers that the proposed Wylfa Newydd plant on Anglesey could be quickly re-mobilised if they can produce a new financing model for large nuclear power stations in Britain.
Hitachi suspended the £20bn Wylfa project at the start of 2019 after failing to reach an agreement over financing. The Japanese group decided at the time the project still posed “too great a commercial challenge”, despite the UK government offering to take a one-third equity stake and provide debt financing.
But Hitachi has maintained a skeleton staff at Horizon and continued to pursue planning permission for Wylfa after the government launched a review into a “regulated asset base” funding model, which would see consumers pay upfront through their energy bills for a new plant and significantly reduce the construction risk for developers.
There has also been talk in the industry of the state taking majority stakes in nuclear schemes, which could enable developers such as Horizon to become contractors. A decision on Wylfa’s planning application is expected by the end of next month.
Duncan Hawthorne, chief executive of Horizon, said: “What I’ve been trying to do over the last period is convince people that our suspension has not in any way undermined our ability to restart quickly.
“We are ready to go . . . but the funding model needs to be in place. We’ve got a competitively priced project that will generate jobs quickly and really fuel the economy in the region the plant is in. If we can’t make our transaction viable in this environment then it’s never going to happen,” he said, adding that Horizon was having “pretty detailed conversations right now” about its proposals.
Plans to resurrect Wylfa could help the government out of a political tight spot as rebel Conservative MPs question the involvement of the Chinese-state backed CGN in Britain’s nuclear sector.
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CGN is a junior funding partner on Hinkley Point C, Britain’s first new nuclear power plant in a generation, currently under construction by France’s EDF in Somerset. And there are particular concerns over another proposed scheme at Bradwell-on-Sea in Essex, where the Chinese group hopes to install its own reactor technology.
But the clock is also ticking for Horizon, which has to submit a business plan to its parent company by December before its funding expires early next year.
It wants 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, Mr Hawthorne conceded it would be “easy” for Hitachi to “say we’re out of here” and sell the site, raising fears CGN could potentially move in.
Josh Buckland, who was an adviser to former energy secretary Greg Clark and is now a director for consultancy firm Flint Global, said the government will “want to create a viable model which means developers will put up some money and take some risk but also that taxpayers and consumers have a fair deal if they are having to provide a substantive amount of funding”.
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “New nuclear has an important role to play in providing reliable, low carbon power as part of our future energy mix as we tackle climate change. We regularly engage with developers about their projects.”
Environment activists insist Britain should not be pursuing large new nuclear plants as other forms of power generation, such as offshore wind, are substantially cheaper.