On 17 January 2019, the Japanese company Hitachi announced it was suspending work on the Wylfa nuclear power plant on Anglesey, Wales and a second project at Oldbury in Gloucestershire. Hitachi’s wholly-owned subsidiary, Horizon Nuclear Power said it hadn’t been possible to reach an agreement on the financing and associated commercial arrangements in time to sustain ongoing levels of development. Horizon says it hopes a way forward can be found, in discussion with UK Government. There is more on Hitachi’s suspension of Wylfa and Oldbury in nuClear News No.114.
Hitachi Ltd bought the Horizon nuclear project for about £700m from its former German owners – Eon and RWE – who decided to put the joint venture up for sale in March 2012. Investing billions in new reactors would have forced a credit-rating downgrade on RWE, said Volker Beckers, CEO at RWE npower in May 2012 and Tony Cocker, CEO of E.ON UK said E.ON lacks the “financial firepower”.
An application for Development Consent was received by the Infrastructure Planning Inspectorate on 1st June 2018. On 28th June, the Inspectorate announced that it had accepted the application for examination, and on 6th July it invited interested parties to register. Registration closed on 13th August. The Nuclear Free Local Authorities (NFLA) full submission is available here. In February 2019 Horizon said it would continue to seek full planning permission for the Wylfa Newydd nuclear project, despite the fact it has been put on hold. This would allow “a timely restart” to work on the project. The Inspectorate announced on 23rd April 2019 that it had completed its examination and that over a period of three months it would write its report and then make a recommendation to the Secretary of State. The Secretary of State will then have three months in which to make a decision.
In nuClear News No.117 we looked at the House of Commons Welsh Affairs Committee which investigated the implications and what might be done to restart development. The MPs argued that if Hitachi was not prepared to resume development, the UK Government should encourage it to sell the site to another developer that might be willing to reactivate the project. The MPs also said the suspension of work on Wylfa Newydd makes it all the more important that plans for Trawsfynydd are brought forward at the earliest opportunity to build a Small Modular Reactor.
The government is reportedly considering using the controversial Regulated Asset Base (RAB) model of financing for Wylfa. (see nuClear News No.116 and No.113) This has been described as an “open cheque book” for developers, as consumers could be locked into paying the costs of a project going wrong – like construction taking longer than planned, or prices spiralling – indefinitely until it’s complete.
Greg Clark has promised to set out a new approach to funding nuclear projects in summer 2019. These supposedly “clever” financing solutions, such as the “regulated asset base” model, sound like ways to shovel construction risks on to consumers and disguise the fact within their bills, according to Nils Pratley writing in The Guardian. They don’t change the fundamental expense of nuclear. A better approach is possible. Ministers should read their own infrastructure adviser’s report which says: “Given the balance of cost and risk, a renewables-based system looks a safer bet at present than constructing multiple new nuclear power plants.”
The combined capacity of the three cancelled nuclear plants was 9.1GW which would have generated 72 terawatt hours (TWh) – roughly equivalent to what the UK’s existing nuclear fleet generates. Despite this large hole in Government plans the Climate Change Committee (CCC) says legally binding carbon budgets to 2030 could still be met without any new nuclear beyond the Hinkley C. Replacing this output with renewables would be between 13% and 33% cheaper, according to an analysis from the Energy and Climate Intelligence Unit, even allowing for the extra costs needed to balance the intermittency.
Looking out to 2050, however, according to the Carbon Brief website, the path becomes more uncertain – not least because the UK is set to raise its targets in line with the Paris Agreement. The need for extra electricity to help decarbonise heat and transport, and an expectation of rising costs to integrate variable renewables as their share grows beyond 50 or 60% will add to the uncertainties. A lot will depend on progress in developing storage and demand side flexibility.
Horizon had wanted to build two Advanced Boiling Water Reactors (ABWRs) at Wylfa. (See ABWRs – one of the least reliable reactors in the world nuClear News No.77September 2015.) The Office for Nuclear Regulation and the Environment Agency issued a Design Acceptance Confirmation for the Hitachi-GE Nuclear Energy’s UK Advanced Boiling Water Reactor (UK ABWR) in December 2017.
The first pre-application consultation for Wylfa Newydd ran from 29th September 2014 to 8th December 2014. The Nuclear Free Local Authorities (NFLA) response to this consultation is available here. Between 31 August and 25 October 2016 held a second stage pre application consultation. The NFLA response is available here.
In April 2017 Horizon Nuclear Power Wylfa Ltd applied to the ONR for a site licence for Wylfa Newydd. This was expected to take 19 months to process and establish “the applicant’s organisation capability, governance arrangements and competence to be a nuclear site-licence holder.” It must “demonstrate it is capable and competent to install, operate and decommission a nuclear facility. If licensed, Horizon will then be regulated by the ONR for the full lifecycle of the site from construction to decommissioning.” Horizon said it “aims to receive all the necessary permissions by the end of 2018.”