Horizon Nuclear Power is suspending its UK nuclear development programme, following a decision announced by its Japanese parent company Hitachi Ltd today.
Consequently, Hitachi plans to post an impairment loss and related expenses of approximately 300.0 billion yen ($2.77 billion) for the financial year ending 31 March 2019.
The decision comes after Hitachi was unable to reach an agreement with the UK government on the financing of the Wylfa Newydd project in North Wales.
Established in 2009 and acquired by Hitachi in November 2012, Horizon had been planning to develop at least 5.8GW of new nuclear capacity at two UK sites: its flagship Wylfa Newydd site on Anglesey and Oldbury-on-Severn in South Gloucestershire. Both projects were to use UK Advanced Boiling Water Reactors (ABWRs), which completed the UK's generic design assessment process in December 2017. The Wylfa units would have been the first commercial boiling water reactors built in the UK.
The UK government started formal negotiations with Hitachi regarding financing of the Wylfa Newydd project in June, but an agreement could not be reached.
A spokesperson from the UK's Department for Business, Energy and Industrial Strategy (BEIS) 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."
BEIS added that the government remains committed to the nuclear sector and that it is reviewing alternative funding models for future nuclear projects, including the Regulated Asset Base (RAB) model. The RAB model sparked interest after being used for the Thames Tideway Tunnel, a large sewer running under London.
Duncan Hawthorne, CEO of Horizon Nuclear Power said Horizon "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, the company will take steps to reduce its presence but keep the option to resume development in future. Hitachi will retain ownership of the land at Wylfa.
The National Grid has confirmed there will be no implications to the security of energy supply, and the government said it is committed to a dynamic energy market with a range of options for meeting future energy demand. These including renewables, storage, interconnectors, new nuclear and more.
However, the UK industry has expressed disappointment and called on the government to do more to support the nuclear industry.
Tom Greatrex, chief executive of the Nuclear Industry Association, said: “Today’s news is disappointing, not just for the Wylfa Newydd project but for Anglesey and the nuclear industry as a whole. Wylfa remains a strong site for vital new nuclear power for the UK.
“It’s regrettable that this project has been suspended, especially as a considerable amount of groundwork has already taken place on the Wylfa project, including creating a supply chain to deliver the project.”
Greatrex stressed that there is an urgent need for further new nuclear capacity in the UK, with all but one of the UK’s nuclear plants (Sizewell B) set to go offline by 2030. Nuclear currently provides 21% of the UK’s electricity.
“If we want a balanced generation mix, Government must work with industry to deliver that vital capacity on this site. At stake [is] our ability to provide bulk, low carbon power, energy security, and the potential loss of the chance of thousands of highly skilled, well-paid jobs in Wales and Northwest England,” Greatrex added.
Wylfa Newydd was Japan's last active overseas nuclear project after Toshiba pulled out of the UK Moorside project in November, and a Japanese-led consortium including Mitsubishi Heavy Industries scrapped its project in Turkey in December.