Hitachi Ltd. is likely to suspend a project to build nuclear power plants in Britain, mainly because it has become difficult to recruit investors over concerns about ballooning construction costs, it has been learned. The company could make a final decision early next year at the earliest after considering the stances of the Japanese and British governments, according to sources. Hitachi has already informed the Japanese government of the possibility that it could freeze the project, sources said. The suspended period appears to be undetermined, but the company will leave some possibility it could resume the project after scrutinizing its profitability. Of the total cost, arrangements have been under way to have the British government finance more than ¥2 trillion, with the remaining ¥900 billion to be shouldered equally by three parties — Hitachi; the British government and British companies; and Japanese government-affiliated financial institutions and Japanese companies — by attracting additional investors in Horizon. Hitachi had intended to make a final decision on the project in 2019. However, it has become difficult for the company to rally support for the project from prospective investors. Within Hitachi as well, cautious opinions have grown about the profitability of a project involving a huge investment that would be recouped through electricity charges over a long period. Hitachi has set lowering its share in Horizon from 100 percent to 50 percent or lower through additional investments as a condition to undergo the project, because this would mean the risk involved is dispersed. The company had hoped that the additional funding would come from major utilities such as Tokyo Electric Power Company Holdings Co. The condition was set because a nuclear power project carries the unavoidable risk of having to pay huge damages in the event of an accident.
Japan News 16th Dec 2018 read more »
Britain’s nuclear energy plans were thrown into further doubt last week after reports from Japan suggested that Toshiba’s rival, Hitachi, was considering pulling out of its proposed £15bn Wylfa Newydd station on Anglesey. The government is expected to take a one-third stake in the plant, as well as providing all of the debt, in a reversal of previous policy. Troubles at Hitachi are believed to stem from the Japanese government’s wariness in matching the UK’s stake in the project. It is hoped a deal will be reached by April to keep the project on track. “We have a significant issue with the expectation of what is coming offline,” said Tom Greatrex, chief executive of the Nuclear Industry Association. “If we are going to maintain energy security, we must be able to replace that capacity.” Wylfa and Moorside are among six plants planned. Britain has no large-scale reactor technology of its own, and the power stations will be designed by the Japanese, the Chinese and the French. They may never reach fruition, however, unless the government can address the key problem: financing. While they can be lucrative investments, nuclear power stations require patient investors willing to sit tight during the long, risky years of building. Overruns during building are frequent and were behind the problems at Toshiba’s nuclear unit, Westinghouse, in 2016. EDF is now behind plans for another financing model, the “regulated asset base” (RAB), which could be used for EDF’s planned Sizewell C plant in Suffolk and become the template for new builds. Under the RAB, a project’s builder begins charging households for future electricity as soon as construction starts, with a regulator — in this case, most likely Ofgem — controlling the amount. Supporters say it encourages investment because of the immediate return. Many pension funds are believed to be interested in backing Sizewell on that basis.“The RAB holds the promise that the financing elements of building new nuclear can be dealt with,” said Greatrex. “I don’t think anyone is expecting any future development using the same model as Hinkley.” The RAB arrangement is controversial, not least as bill-payers start paying for the station long before its energy can boil a kettle. Although widely used in infrastructure, the model proposed for the nuclear industry would require new laws. The government has been reviewing the RAB model and ministers are expected to announce soon whether they think it viable, with a consultation or white paper expected early next year. Whether it would get through, given the Brexit distraction, is by no means certain.
Times 16th Dec 2018 read more »
A bid to start clearance work for a new nuclear power station has been halted by the Welsh Government over fears about the effect on wildlife at a nature reserve. The Welsh Government said its decision to review the plans does not imply any view from the Welsh ministers about the merits of the application. A spokesman for Horizon Nuclear Power said it was “disappointed” that the application which was “passed unanimously” by the council had been called in. “We disagree with the reasoning and justification for the call in and are now considering our options on how we respond to the decision. “We are also looking closely at how the decision impacts the project and how these impacts can be mitigated.”
North Wales Chronicle 15th Dec 2018 read more »