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Japan’s Prime Minister Abe in UK to beg for more money for Wylfa nuclear project?

Unearthed 9th Jan 2019 Doug Parr: Japan’s prime minister Shinzo Abe is in London this week, and it seems likely in his meeting with Theresa May that the Japanese-backed
nuclear power plant in Wales will come up. The Wylfa project, to be built
by Hitachi and its subsidiary Horizon, is one of a clutch of planned
nuclear power stations which the UK government has heavily prioritised for
security of power supply, and meeting the country’s climate obligations.

Late last year another of the 6 major projects, the proposed Moorside plant
in Cumbria, was effectively abandoned after Toshiba pulled out. And another
has come under fire as questions are raised about security issues flowing
from the Chinese builders.

These developments effectively illustrate that
UK nuclear power policy is heavily dependent on overseas developers.

What is less understood is that there are significant shifts underway in Japan
which strongly suggest Hitachi’s projects may too be at risk. The most
advanced of Horizon’s nuclear plans is a large power station to be built
at Wylfa on Anglesey, North Wales. In fact, with the collapse of Moorside,
the Wylfa plant is the only nuclear project that could realistically be
built before 2030, in addition to the plant already under construction at
Hinkley Point in Somerset.

Japan, however, is reconsidering its nuclear
export strategy. Because it keeps going wrong. Until recently it had 3
companies interested in building nuclear power stations abroad: Toshiba,
Mitsubishi and Hitachi. These companies have experience building nuclear
stations at home but since the Fukushima disaster in 2011, they have had to
look elsewhere.

Seeking to help these giants of Japanese industry to
maintain their businesses, Prime Minister Abe reportedly wanted to turn
Japan into a “nuclear export superpower”. Hitachi, however, are
reportedly be thinking of scrapping the project as its costs and risks
become unmanageable. Hitachi could be looking at Toshiba’s
near-bankruptcy and thinking ‘let’s not go there’. According to their
chairman the project was in “an extremely severe situation” as it
struggled to attract investors, even though UK government may have promised
as much as two thirds of the build cost.

Despite this already generouslargesse (on behalf of UK taxpayers, not offered to any other energy projects) Hitachi are intending to come back to UK government and ask for
more. It looks like no assessment of the risks by a private funder come
back looking good, and the only way nuclear plants can be built is with
government stepping into very risky projects that require taxpayers to
shoulder the risk.

The aversion from private investors may not only be
because of the rising costs, but also that the operating performance of the
proposed reactor is pretty poor (albeit partly due to earthquakes).

Notably Hitachi continues to be happy to spend many billions of pounds on power
grid investments, but not its own nuclear reactor, which it wants UK
taxpayers to fund. Major Japanese newspapers have opposed their own
taxpayers lending support to the Wylfa project, even though a home-grown
company would be getting the benefits.


And during the Xmas break, Japan’s
third largest newspaper called for the nuclear export strategy to be
abandoned. Another paper attacks the ‘bottomless swamp’ of nuclear
funding in UK and remarks upon how few countries seem to be following the
UK-style nuclear-focused policy. Reportedly Japanese government has asked
its development banks to fund the ‘nuclear export strategy’, and Wylfa
in particular, but they don’t want to. It is quite difficult to see how
Hitachi can manage the risks of this project without some home support, and
support in Japan is ebbing away.


January 12, 2019 - Posted by | Japan, politics international, UK

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