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Costly saga of Hitachi nuclear power project in North Wales comes to an end

Hitachi to Cease Work on Nuclear Power Plant in North Wales, NYT,   Stanley Reed, Jan. 17, 2019, Hitachi said on Thursday that it was suspending work on a 15 billion pound, or $19.3 billion, nuclear power project in North Wales after failing to agree on financial terms with the British and Japanese governments.

“The decision was made from the viewpoint of Hitachi’s economic rationality as a private enterprise,” the company, based in Japan, said.

Ben Russell, a spokesman for Hitachi’s British venture, Horizon Nuclear Power, said that discussions with the governments would continue but that its staff, currently around 300 people, would be cut to “a minimal handful.”

Hitachi will also stop planning work on a second project, in Oldbury, England. The company said it planned to take a write-off of 300 billion yen, or $2.75 billion, on the projects.

The decision by Hitachi is a blow to the British government, which is betting heavily on nuclear installations to help meet the country’s electric power needs in the coming decades.

The big question is whether Hitachi’s move will be a death knell for Britain’s campaign to build nuclear plants, which so far has resulted in only one project under construction.

While there are signs that the government is rethinking its energy policy, it was willing to go a long way toward trying to keep Hitachi on board.

In a statement to Parliament on Thursday, Greg Clark, the secretary of state for business and energy, said the government had been willing to consider providing one-third of the equity financing for the project and to take on all of the construction debt. When Hitachi continued to balk, Mr. Clark said, “I was not prepared to ask the taxpayer to take on a larger share.”

…….For Hitachi, though, the announcement could mark the end of a long and expensive saga. The company acquired the Horizon sites from two German utilities in 2012 for £697 million, or about $900 million, and wound up spending around £2 billion in total on design approvals, staff and other matters. It has been hiring apprentices, who have been training at a technical college on the island and going to Spain and Japan for work experience. At times in recent months more than 100 archaeologists were on the site, excavating and recording ancient structures that the construction would have destroyed.

Hitachi hoped Britain would prove to be an international showcase for its reactor designs. Ultimately, the company lost patience with the high level of spending required to land such a project there.

Hitachi had sought to arrive at a financial arrangement that would attract long-term investors like pension funds to the project and reduce its own exposure. But the offers of support from both the British and the Japanese sides were not enough………https://www.nytimes.com/2019/01/17/business/energy-environment/hitachi-horizon-wales-nuclear-plant.html

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January 19, 2019 - Posted by | business and costs, politics, UK

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