Plans to build the Wylfa nuclear plant in north Wales can only be rejuvenated if the UK government agrees to nationalise the project, the chairman of Hitachi said on Thursday, a week after his company froze its involvement and plunged Britain’s energy policy into crisis.
Hiroaki Nakanishi, speaking at the World Economic Forum in Davos, said the government would need to take a majority stake in the business to cover the gap left by private investors who have declined to fund the project — making it the latest nuclear project in the UK to collapse.
“Nationalisation is the only path,” Mr Nakanishi said in comments on the sidelines of the conference, according to the Nikkei Asian Review. He added Hitachi had ambitions only to be a “provider” of nuclear projects and “not a utility operator”.
The comments from Mr Nakanishi suggest there is little hope of the Wylfa project being restarted.
The British government had offered to take a one-third stake in the Wylva project and provide all of the debt financing, but wanted Hitachi and the Japanese government to invest alongside them.
The government said last week that while it remains committed to nuclear energy, including looking at new financing models, the falling costs of renewables like wind and solar mean it would be unfair to ask the taxpayer to take on too high a burden to build new nuclear plants.
But that has left question marks over the UK’s long-term energy strategy, which envisioned a higher proportion of electricity demand being met by a combination of nuclear and renewables as the country tries to adapt to tough targets on carbon emissions.
Three out of six planned nuclear plants, accounting for more than 40 per cent of the country’s forecast new nuclear capacity, have now been shelved. Toshiba pulled out of developing a plant in Cumbria, north-west England late last year, and Hitachi scrapped plans for another plant in Oldbury-on-Severn in Gloucestershire.
Only one nuclear power station, Hinkley Point C in Somerset, is under construction. It is led by France’s EDF and supported by China but has been heavily criticised for its high costs to consumers, with the guaranteed power price to investors well above current electricity prices and — increasingly — renewables.
Greg Clark, the UK business secretary, said in a letter to the Financial Times this week that nuclear projects could no longer be sanctioned “at any price” as they needed to be competitive for taxpayers — although he supports plans to push ahead with two other plants — Sizewell C and Bradwell.
“The developing technology and economics of energy mean that we have a wider choice of power at a lower price than ever before, much of which can be deployed within years rather than decades,” Mr Clark said.
The government is set to publish an energy white paper this summer that is expected to overhaul its plans, potentially looking at the greater role renewables might play and laying out new funding models for nuclear power.
It could include the so-called regulated asset base approach, which has been used to fund other infrastructure projects, like London’s “ super sewer”, where costs are met in part by additional charges on customer bills before construction is completed.
Others are pushing for renewables to make up a bigger part of the UK’s energy plans following the Wylfa collapse. SSE chief executive Alistair Phillips-Davies on Thursday called on the government to expand its support for offshore wind, an area his company has positioned itself in.
A spokesperson for Hitachi in the UK was not immediately available to comment.