Hitachi has pulled the plug on its nuclear power station project at Wylfa in Wales, blaming the global pandemic for a decision that will cast a shadow over the future of UK energy policy.
The formal announcement, which followed a board meeting on Wednesday, is the latest blow to the UK’s ambitions on climate change as it aims to achieve net zero carbon emissions by 2050.
In a statement, the Japanese industrial conglomerate said the decision came after “the investment environment has become increasingly severe due to the impact of Covid-19”.
While describing the decision as “disappointing,” a UK government spokesperson said it was open to discussing new nuclear projects with any viable companies and investors that are willing to develop sites in the UK, including in North Wales.
“Nuclear power will play a key role in the UK’s future energy mix as we transition to a low-carbon economy, including through our investments in small and advanced modular reactors,” the spokesperson added.
Hitachi bought the site in Anglesey, an island off the coast of north Wales — dubbed Horizon Nuclear — from two German utility companies for £697m in 2012.
But the group suspended the £20bn scheme in January 2019 after the company failed to secure a financial agreement with the UK government. It later wrote off nearly ¥300bn ($2.8bn) of work in progress.
Analysts had said Hitachi was likely to walk away from the project following its $6.4bn deal in late 2018 to buy an 80 per cent stake in Swedish-Swiss conglomerate ABB’s power grids division — a business that has also been hit by a decline in electricity consumption due to coronavirus lockdowns.
Still, as recently as August, Horizon executives remained hopeful that the Wylfa site could be revived and held detailed discussions with UK officials — but the optimism was not shared by Hitachi’s management.
On Wednesday, Duncan Hawthorne, chief executive of Horizon, said: “Wylfa Newydd on Anglesey and Oldbury on Severn are highly desirable sites for new nuclear build. We will do our utmost to facilitate the prospects for development which will bring the major local, national and environmental benefits that nuclear can uniquely deliver.”
Stephen Crabb, the former work and pensions secretary who chairs the Welsh affairs committee, said the breakdown of the largest energy project in Wales was a hit to UK’s energy policy. “With the nation’s remaining nuclear plants ageing and the need for low-carbon, high yield plants needed to replace them urgent, it has never been more important than now to ensure energy security,” he said.