The Nuclear Free Local Authorities (NFLA) notes reports today in the Japanese media that Hitachi is shortly going to completely withdraw its interest in developing a new nuclear reactor site at Wylfa in Anglesey. The reports suggest that Hitachi does not believe the UK Government can provide enough financial support to help to develop the project. (1) For NFLA, despite report after report in the supportive media of the benefits of new nuclear, Hitachi’s decision is a reality check as more attractive, realisable and cheaper renewable energy, energy efficiency and energy storage solutions exist.
According to reports in the Mainichi Shimbun newspaper, sources close to the Japanese utility Hitachi say that at its board meeting tomorrow the company will formally decide to withdraw its plans to develop the Wylfa site, and inform the UK Government of its decision. (1)
As Mainichi comment, the decision by Hitachi is a huge blow both to the Japanese Government’s nuclear technology export plans as well as to the UK’s nuclear energy programme, which relies so much on foreign investment.
Hitachi’s original plans to build a two-reactor nuclear plant at Wylfa commenced after buying the site from RWE and E-On in 2012. At the time, Hitachi had planned for it to be operational around 2025. They had estimated the construction cost to be around £22 billion, of which the UK government would provide around two thirds of financial support in it through loans. It would appear that Hitachi have now concluded increasing new costs are too high, safety issues have grown and stiffer competition from the renewables sector is such that it cannot go ahead with any support for the project. It is also possible the financial issues affecting the UK Government from Covid-19 support and the upcoming prospects of a ‘no deal’ Brexit will also have had a part to play in Hitachi’s expected decision.
Despite the nuclear industry pushing very hard for a wide range of new nuclear projects – big nuclear at Hinkley Point, Sizewell and Bradwell; small modular nuclear at sites like Moorside and the proposed development of a nuclear fusion reactor – Hitachi’s decision is a sober reality check that costs remain too high in comparison to developing renewable energy schemes, introducing a wider energy efficiency programme and bringing in further battery storage plans.
NFLA note a recent report by Professor Stephen Thomas and Alison Downes that highlight the French utility EDF is surrounded in a mass of debt which makes it increasingly difficult for it to finance Hinkley Point C. (2) EDF have also made it clear that Sizewell C can only go ahead if the UK Government largely pays for much of it through a Revenue Asset Base model, but over a year after that consultation was held there has been no announcement of support for it. Despite as well the wide calls for supporting small and advanced modular nuclear reactor designs, there is an acknowledgement this would also require a huge financial investment to both develop the technology and create a robust supply chain for it. (3)
Meanwhile, development of offshore wind continues apace, solar farms are being built without any public subsidy and there is finally some real support from government for the great benefits of energy efficiency, though much more should be done.
NFLA calls for the UK Government’s planned Energy White Paper to acknowledge this changed energy environment, and the new economic realities the country is now facing, and develop instead a renewable energy revolution that is coupled with energy efficiency, smart energy and energy storage programmes. Local government can play a positive role in supporting all of these schemes.
NFLA Welsh Forum Chair, Councillor Ernie Galsworthy said:
“I am not surprised at all to hear that Hitachi is likely to call a final halt to its 8 year interest in developing new nuclear at Wylfa in its board meeting tomorrow. The writing has been on the board for some considerable time, and it is clear recent negotiations with the UK Government have failed to satisfy the Japanese company that it could move forward with this project. This should now mean the end of interest in new nuclear in Wales and start the process of moving away from these costly projects towards renewable energy alternatives, energy efficiency and energy storage schemes in which Councils can play a positive role in.
“In the 15 years new nuclear has been heavily pushed in the UK all that is to show for it is a building site at Hinkley Point on a development whose long-term funding still appears fragile at best. At the same time offshore wind is booming and, with renewed support, onshore wind, solar, possibly marine, tidal and green hydrogen can join them. A new low carbon revolution is eminently possible if the UK Government can finally move away from its obsession with new nuclear.”
Ends – for more information please contact Sean Morris, NFLA Secretary, on 00 44 (0)161 234 3244.
Notes for Editors:
(1) Mainichi Shimbun, 15th September 2020
(2) Report by Professor Steve Thomas and Alison Downes on issues around financing Hinkley Point C, August 2020
(3) NCG / NFLA joint report on the prospects for SMRs in the UK and worldwide, July 2019