Hitachi has agreed to continue negotiating with the UK over the future of a ¥3tn (£20bn) nuclear plant in Wales, in response to enhanced terms offered by the British government. The vote to move ahead, at a pivotal meeting on Monday, means the board has accepted the principle of a tripartite investment structure under which Hitachi, the UK government and state-backed Japanese entities would become equal investment partners in a project fraught with risk of huge cost overruns and low profitability. People close to the Hitachi board, who said ahead of Monday’s meeting that the decision was ” very finely balanced’, said things were now looking positive for a project that many view as critical to the British nuclear industry. A memorandum of understanding is expected in June, said one of the people. The Wylfa Newydd development, located on the island of Anglesey, is also seen by some as a litmus test of UK-Japan trade relations as Brexit approaches. In recent weeks, and as a gauge of how keenly it wants to bring the project to fruition, the UK government has discussed a number of proposals with Hitachi that reflect the Japanese group’s reluctance to shoulder too large a slab of equity risk. Sweeteners from the UK side included an offer to double the level of its previous guarantee on the loans required to fund construction. A letter sent by the UK government on the eve of the Hitachi board meeting outlining its latest proposals was received positively by the Japanese company, according to people familiar with the situation. But the same people said objections were raised during Monday’s meeting, and that some directors were concerned Hitachi might be taking on too much financial risk. Another key factor is the strike price – the guaranteed level at which the plant sells electricity – which is still under discussion. The UK government is expected to back a price some £15 per megawatt hour lower than the £92.50/MWh negotiated for the Hinkley Point C nuclear plant that is under development by EDF.
FT 29th May 2018 read more »
Hitachi Ltd. has decided to continue talks over a ¥3 trillion nuclear power plant project in Wales after the British government made a financing offer, according to a source. The maker of machinery and infrastructure systems made the decision at an extraordinary board meeting Monday and will exchange a document that will serve as a basic agreement with the British government if negotiations make progress, the source said. The British government has offered to shoulder ¥2 trillion in loans directly and indirectly through a local financial institution. Even so, Hitachi remains concerned over the risk of pursuing the project due to the hefty cost. The remaining ¥1 trillion to be financed by investments will be equally shouldered by three parties — Hitachi, a British group and a Japanese group. Hitachi Chairman Hiroaki Nakanishi made a personal request to British Prime Minister Theresa May earlier in the month for support for the nuclear plant construction operations, another person familiar with the matter said earlier. As other nuclear projects abroad involving Japanese companies have been struggling due to increased costs for safety measures, making progress in the Wales project is seen as a boost for Prime Minister Shinzo Abe’s goal of exporting nuclear power technology to drive economic growth. The Japanese government is involved in the project through a state-backed financial institution. Hitachi has indicated that should talks over the British government’s proposed funding prove difficult, the company may withdraw from the project after the total cost swelled for additional safety measures. It remains unclear whether the nuclear power plant project as a whole will be profitable, as Hitachi and the British government are at odds over the purchase price of electricity to be produced at the plant, the source said. Currently, the purchase price offer by the British government, which is considerate of local opposition, is some 20 percent lower than the price Hitachi wants, according to the source.
Japan Times 28th May 2018 read more »
Higher offer from UK keeps Hitachi at table for nuclear project. Japanese conglomerate seeks to reduce disaster liability. Hitachi has agreed to continue negotiations with the U.K. on a planned nuclear power plant in Wales after the government in London expanded financial support to ease the Japanese group’s concerns about its hefty price tag. The Board voted to move ahead on Monday. The UK has offered to lend Hitachi over 2 trillion yen. Hitachi aims to conclude a memorandum of understanding as soon as mid-June. Some of Hitachi’s outside directors remain concerned about the project’s risks. The company plans to insist on safeguards that eliminate Hitachi’s financial liability. Hitachi is currently the full owner of the project’s developer but looks to sell down its stake in the operations over time. Because the size of the stake in the project directly translates to its accident liability.
Nikkei Asian Review 29th May 2018 read more »
Hitachi Ltd. has decided to continue talks over a ¥3 trillion nuclear power plant project in Anglesey, Wales after the British government made a financing offer, according to reports. The maker of machinery and infrastructure systems made the decision at an extraordinary board meeting on Monday. Reporting from the Japanese Times indicates that the UK government has agreed loans and loan guarantees covering ¥2 trillion, but not to take an equity stake in the remaining ¥1 trillion investment needed. Kate Blagojevic, Head of Energy for Greenpeace UK, said – “Nuclear has been given more state support than any other industry. After sixty years of preferential treatment, shielded from risk and scrutiny, it still can’t compete in the energy market. “Reports that the government could put the taxpayer on the hook, not just for the risk of this project failing but for the billions it will cost in construction are deeply troubling. “We should be told why the government thinks it makes economic sense to pay far more for our electricity when other technologies, like offshore wind and solar power with battery power are not only cheaper but safer, faster, cleaner and a lot more popular.”
Greenpeace 28th May 2018 read more »
A group of anti-nuclear campaigners have travelled to Japan to petition the government to withdraw support for a nuclear power station on Anglesey. A petition against the Wylfa Newydd nuclear plant signed by almost 6,000 people was handed to Japan’s Ministry of International Trade and Industry. Pawb’s (People against Wylfa B) trip comes amid reports of UK and Japanese government investment in the project. Technological giant Hitachi said there had been “no changes to disclose”. Speaking to BBC Wales from Japan, Meilyr Tomos from Pawb, said: “There’s huge uncertainty. It’s a scheme that requires two governments to prop it up, so there’s no certainty on anything at this stage. “It’s not a commercial proposition. You need the biggest bang for your buck, that’s not something nuclear can deliver, it’s far too expensive.”
BBC 28th May 2018 read more »
[Machine Translation] Citizen groups who came to Japan from England asked the Ministry of Economy, Trade and Industry to cancel the plan concerning the nuclear export plans to the UK, which is backed by the Japanese government and promoted by Hitachi, Ltd., to the UK. British citizen group: “We are very anxious and concerned about the nuclear plans we are about to build now, I do not want the people of Wales to happen to the people of Fukushima.” Nuclear power plant A local citizen group in the UK where the construction plan goes forward has submitted 5823 signatures to the Ministry of International Trade and Industry requesting that the plan be canceled and the government’s support be canceled. The civil society appealed that “nuclear exports are impossible despite the continuing miserable situation due to the accident at Fukushima Daiichi Nuclear Power Plant”, the Ministry of Economy, Trade and Industry said, “There is no fact that we have decided support at the moment” It was. According to the stakeholders, since Hitachi is likely to increase construction costs, the British government is seeking support for 2 trillion yen loan proposal. Hitachi is expected to confirm the continuation of the plan at the Board of Directors on 28th
Asahi TV News 28th May 2018 read more »