The Nuclear Free Local Authorities (NFLA) notes media reports in the UK and Japan which suggest the UK Government is inching towards an agreement with Hitachi and the Japanese Government over the funding for a proposed new nuclear reactor at Wylfa in Anglesey. This could leave the UK taxpayer providing funds and guarantees to help cover a substantial amount of the £21 billion cost of the project. NFLA is particularly concerned that Hitachi may be placing the costs of additional safety measures on to the Government.
According to the ‘Financial Times’, Hitachi has agreed to continue negotiations with the UK on a planned £21bn nuclear power station in Wales after the UK Government expanded financial support to ease Hitachi’s long-standing concerns about the final cost of the project. Hitachi’s board voted on 28th May 2018 to move ahead on further talks with the Government. (1)
This vote means the board has accepted in principle a ‘tripartite investment structure’ under which Hitachi, the UK government and state-backed Japanese entities would become equal investment partners. According to reports in Japanese media outlets, the UK is proposing an equal equity split of about £6.5bn among Hitachi, the UK public-private consortium and a group of government-backed Japanese entities. The ‘Financial Times’ reported that another key factor to resolve is the strike price – the guaranteed level at which the plant sells electricity – which is still under discussion. (2)
According to ‘The Times’ though, Hitachi ‘won’t pay’ for nuclear accidents at the proposed Wylfa plant on Anglesey. As such, Hitachi could seek to absolve itself of financial responsibility for any accidents at Wylfa. Commenting on sources in the Japanese newspaper ‘Nikkei’, ‘The Times’ noted that some of Hitachi’s directors want “safeguards that reduce or eliminate Hitachi’s financial responsibility for accidents at the plant”. As the Times notes, nuclear operators are already obliged to take out insurance to cover their liabilities in case of an accident. If they are unable to secure insurance from the market, the government is obliged to step in and provide it instead. It is unclear what alternative arrangement or safeguards Hitachi might be seeking at present. (3)
The NFLA is opposed to this controversial deal, and it has already commented that it wants to see a greater level of public openness and transparency from the Government as so much public money is going to be allocated for such a project. It backs the call from Caroline Lucas MP for full Parliamentary and audit scrutiny of any finally agreed package for a Wylfa B reactor.
NFLA sees the billions of pounds of public money being planned for this project as a significant and unnecessary risk and not good value for money. Such financing would greatly assist the renewable energy sector in projects such as the Swansea Bay tidal lagoon, which has been assessed as a scheme where costs would come down in the future unlike with new nuclear, where costs always appear to go up, as a newly published study by Imperial College indicates. (4)
NFLA welcomes that a delegation from the ‘People Against Wylfa B’ group is currently in Japan looking at the Fukushima incident and interacting with Friends of the Earth Japan in challenging the Hitachi board decision made in Tokyo. It looks forward to a report from them, which will be provided at its September meeting in Cardiff. (5)
For Wales, this development comes shortly after the Welsh Environment Minister approved the dumping of as much as 300,000 tonnes of sediment from the proposed Hinkley Point C new nuclear project on a site close to Cardiff Bay. NFLA believes the views of over 100,000 people who signed a petition of concern on this matter should be fully considered, and a delay to providing the environmental licence should occur to allow for more detailed environmental analysis, as was suggested by the groups behind the petition. In the NFLA’s view, the case has not been effectively made that such material should be dumped close to a site near Cardiff Bay, many miles from the Hinkley site. NFLA will continue to work with the groups involved to call for a rethink of this policy. The issue also raises wider concerns on the ongoing real limitations in marine sampling off the coastline in and around nuclear sites. (6)
NFLA Vice-Chair, Councillor David Blackburn said:
“It is disappointing to hear Hitachi may want to go ahead with the Wylfa development and agree a deal with the UK Government. This could effectively lock-in large public investment for a project where the costs have grown markedly. It could even become a more expensive development than Hinkley Point C. Such a deal should not go through without proper Parliamentary scrutiny and a full and independent audit of the deal from the National Audit Office. It is very sad that, after over a decade of the industry pushing forward with new nuclear projects ballooning in budget from their original cost, the Government is bending over backwards to save this project. If only such commitment could be provided to other areas of renewable energy, decentralised energy, energy efficiency and energy storage then our wider strategy would be in a much healthier state than it currently is.”
Ends – for more information please contact Sean Morris, NFLA Secretary, on 0161 234 3244.
Notes for editors:
(1) Financial Times 29th May 2018
(3) As per reference (2) above.
(4)bImperial College 29th May 2018
(5) BBC 28th May 2018
(6) BBC 23rd May 2018