The board of Japanese industrial giant Hitachi is “very finely balanced” over the future of a £15bn nuclear power station it is developing in Wales, as it prepares to meet on Monday in Tokyo for a critical vote on the project. On the agenda is the key issue of whether the scheme should proceed under a proposed “tripartite” shareholding structure, which would see the UK and Japanese governments take equity stakes alongside Hitachi. Wylfa is seen as crucial for the future of Britain’s energy security and also important for UK-Japan trade relations as Brexit approaches. An outline agreement setting out the principles of the arrangement is understood to have been reached between the UK government and Horizon, the Hitachi subsidiary company developing Wylfa. It covers the initial two reactors to be built at the site, though there could eventually be more. People close to Hitachi said that, less than 24 hours before the board meeting, it was difficult to predict which way the board would lean. Just over two-thirds of the board’s members are outside directors — an unusually high ratio for a Japanese company. While the vote on the shareholding structure will mark a “critical milestone” for Horizon, the ultimate fate of the project awaits another key decision, according to people familiar with the project. Full cost estimates for the development will not be completed until the end of 2018, and the formal agreement to invest in construction of the plant itself is not expected until next year. That decision will hinge on whether Hitachi is satisfied on a range of financial considerations, including capital cost and return on investment. Another key factor is the strike price — the guaranteed level at which the plant sells electricity — which is still subject to 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 27th May 2018 read more »
The fate of a £15bn-plus nuclear power station is set to be decided this week — and with it the future of Britain’s atomic renaissance. The Japanese industrial giant Hitachi is due to decide Monday whether to proceed with Wylfa. Hitachi’s decision has huge implications for industrial collaboration between Britain and Japan and the country’s nuclear power industry. The project hinges on winning financial support from Westminster. This weekend, ministers are expected to set out their offer to Hitachi in a letter ahead of the crucial meeting. The proposal is expected to include UK taxpayers taking a direct stake in the plant, alongside Hitachi and the Japanese state, as well as guaranteeing loans. In return, Westminster wants Hitachi to substantially undercut on price the £20bn Hinkley Point plant in Somerset, which is being built by EDF. The French company struck a deal with the government for a guaranteed payment of £92.50 per megawatt hour for 35 years. Ministers are expected to make an announcement once they return from this week’s parliamentary recess. They will herald it as an example of the type of post-Brexit trade deal Britain can expect.
Times 27th May 2018 read more »
Britain’s plans for a nuclear power revival could hinge on a meeting in Japan today to discuss the viability of a £15 billion twin-reactor in Wales. The board of Hitachi, the Japanese group behind the Horizon nuclear project, is due to discuss the British government’s latest proposal on the financial terms for building the plant. Ministers are insisting that the planned 2,900-megawatt power station on Anglesey is cheaper for consumers than the £20 billion Hinkley Point C project being constructed by EDF, of France, and Chinese investors. The government is thought to be looking for a guaranteed price of no more than £80/MWh for the Anglesey plant, but, in return, Hitachi has sought to transfer some of the construction risks to the UK taxpayer. Under the deal being considered, the taxpayer is likely to take an equity stake in the project alongside Hitachi and the Japanese government. Hitachi is also seeking loan guarantees via the British scheme for funding infrastructure projects. Having witnessed the fallout from Toshiba’s nuclear ambitions, Hitachi would commit to Anglesey only on terms it found attractive. Sources suggested that there would be no quick decision and that there could be more talks. For Britain, failure to secure a deal with Hitachi would throw into doubt plans to build several new plants to replace an ageing nuclear fleet.
Times 28th May 2018 read more »