5 Jun (NucNet): The UK government has started negotiations with Japan-based Hitachi on the planned £20bn Wylfa Newydd nuclear power station in Wales, energy secretary Greg Clark said in a written statement to parliament yesterday.
Mr Clark said the UK government will be considering a direct investment of public resources in the project alongside with the Japanese government and Horizon, the project’s developing company.
“Both the National Audit Office and the Public Accounts Committee have recommended that the government consider variations from the Hinkley Point C financing model in order to reduce costs to consumers”, Mr Clark said.
However, Mr Clark said: "It remains the government's objective in the longer term that new nuclear projects - like other energy infrastructure - should be financed by the private sector."
He said that no decision has been taken yet to proceed with the Wylfa project and the successful conclusion of the negotiations process will be subject to full government, regulatory and other approvals, including value for money, due diligence and state aid requirements.
The UK is likely to need significant new nuclear capacity to meet its carbon reduction commitments at least cost, particularly as transport and heating electrifications needs increase, Mr Clark said.
The London-based Nuclear Industry Association (NIA) said it welcomed the government’s commitment to consider different funding models, including direct investment, for financing nuclear new build projects.
“Today’s announcement, which reiterated UK government support for civil nuclear as a vital element of a future low carbon power supply and confirmed the Horizon Wylfa Newydd project as the next element of our new build programme, is good news towards meeting our decarbonisation targets”, said NIA chief executive Tom Greatrex.
Nuclear developer Horizon is planning to build and operate two Hitachi UK Advanced-Boiling Water Reactor (ABWR) units at Wylfa Newydd on the island of Anglesey in north Wales. The company submitted its site application in April 2017.
At the end of May 2018, reports in Japan and the UK said Hitachi’s board voted to move ahead with negotiations on Wylfa after the government in London allegedly expanded financial support to ease the Japanese group’s concerns about the project’s price tag.
The vote meant the board had accepted the principle of a tripartite investment structure under which Hitachi, the UK government and state-backed Japanese entities would become equal investment partners.
According to the reports, the UK had proposed an equal equity split of about £6.5bn among Hitachi, the UK public-private consortium and a group of government-backed Japanese entities.