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Ever multiplying financial costs for building new nuclear reactors are hitting UK, and other countries, too

Nikkei Asian Review 6th June 2018 Britain’s move to finance much of a Hitachi nuclear power plant underscores
how such projects have grown too costly for the private sector to bear
alone, raising further questions about a key component of Japan’s ambitious
plans to export infrastructure worldwide.

The threat of electricity shortages spurred by factors including aging power plants drove London’s
pledge to loan a full 2 trillion yen ($18.2 billion) for the Japanese
industrial group’s plan to build two nuclear reactors in Wales, a project
slated to cost over 3 trillion yen.

The Wylfa saga illustrates how the expense of building nuclear power plants has become a deterrent to their
construction. Estimates for the Wales reactors have roughly doubled from
the initial outlook, owing to snowballing costs for safety and other
provisions. apart from Hitachi’s U.K. project, most of Japan’s overseas
nuclear efforts face an uncertain future at best.

Plans for new reactors are stalling around the world as countries get caught between the need for
energy security and the risks associated with nuclear energy. A Mitsubishi
Heavy Industries plan to build four reactors in Turkey’s Black Sea coastal
city of Sinop has doubled in cost to around 5 trillion yen, owing mainly to
additional precautions against earthquakes. Now the project “will not turn
a profit unless the Turkish government more than doubles the price at which
it buys electricity,” said a source affiliated with Mitsubishi Heavy.

Trading house Itochu has pulled out of the business alliance behind the
project. Toshiba’s former nuclear unit Westinghouse Electric, which was
building four reactors in the U.S., filed for bankruptcHitachi still faces
other hurdles on the Wylfa project. Lining up investors is proving
difficult on the Japanese side.

The U.K. government likely will drive a
hard bargain on power purchase prices, having drawn criticism for agreeing
to pay far above market rates for electricity from Hinkley Point C, a
nuclear power plant being built by France’s EDF and state-owned China
General Nuclear Power Group. Clarifying liability for accidents will be
another issue.
https://asia.nikkei.com/Business/Business-Trends/Hitachi-s-UK-nuclear-project-shows-heavy-risks-for-private-sector

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June 8, 2018 - Posted by | business and costs, politics, UK

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