The future of the UK’s nuclear supply was in doubt on Thursday when Hitachi pulled a £20 billion project after government talks collapsed.
The Japanese conglomerate confirmed it was suspending plans to build the Wylfa Newydd nuclear power plant in Anglesey, North Wales and would take a multi-billion pound writedown.
Hitachi has been in talks with the UK government since June about funding the equity portion of the project, known as Horizon Nuclear Power, to make the deal more economically viable but both sides failed to reach agreement.
“The decision was made from the viewpoint of Hitachi’s economic rationality as a private enterprise,” the company said. Business Secretary Greg Clark said: “Despite extensive negotiations, the Government and Hitachi are unable to reach agreement to proceed at this stage.”
Hitachi bought the project in 2012 for £697 million after acquiring a joint venture between E.ON and RWE to further its UK nuclear ambitions.
Funding plans included securing backers and the Government to invest with Hitachi in the equity portion of the project. That would have contributed around one-third of the financing, with the rest coming from loans.
Hitachi said it would continue discussing a nuclear power programme with the UK and remains committed to Britain, where it makes trains and digital equipment.
The reactors, which included plans for a second site in Oldbury, would have created up to 850 jobs and a construction workforce of up to 4000.
Horizon Nuclear Power chief executive Duncan Hawthorne said the company was starting consultation with staff, who number around 330, about the next steps. “I am very sorry to say that despite the best efforts of everyone involved we’ve not been able to reach an agreement,” he said.
The Horizon sites would have seen the Japanese group install one of its Advanced Boiling Water Reactors, which have been used four times in Japan.
Hitachi will take a 300 billion yen (£2.14 billion) hit on expenses and a further 300 billion yen impairment.
In November, Toshiba ditched plans to build a nuclear power plant in Cumbria through its NuGeneration subsidiary. Nuclear Industry Association chief executive Tom Greatrex said: “The urgent need for further new nuclear capacity in the UK should not be underestimated.”
