But Japanese engineering giant promises to 'keep the lines of communication with government' on the future of the Wylfa and Oldbury sites
Hitachi has officially scrapped plans to build new nuclear power plants at Wylfa on Anglesey and Oldbury in Gloucestershire amid ongoing struggles to drum-up additional financing for the high profile projects, it confirmed today, dealing another major blow to the nuclear industry's ambitions in the UK.
Developer Horizon Nuclear Power, which is owned by the Japanese engineering conglomerate, this morning confirmed it was fully winding down all its current development activities for the two projects, both of which had already been on ice due to difficulties in securing additional investor partners.
However, the firm said it would still "keep the lines of communication open with government" regarding future options at both sites, raising the prospect that the plans could be revived if the government's long awaited Energy White Paper helps address the financing challenges that continue to dog proposals for new nuclear projects in the UK.
Development of the £20bn Wylfa Newydd project in Wales had already been suspended in January 2019 after Horizon failed to agree a funding package with the government, despite ministers offering a long-term Contracts for Difference (CfD) package worth £75 per megawatt hour.
The company had since been working on securing an alternative financing model in the hopes of reviving the Wylfa project, but has struggled to attract additional investors at a time when new nuclear projects in Europe continue to face construction delays and increased competition from renewables.
The plant was envisaged as a replacement for the existing nuclear power plant at the site which is coming towards the end of its current lifespan. The project was set to create up to 9,000 jobs during the construction phase and have a 60-year operational life, according to the developer.
Horizon Nuclear Power chief executive Duncan Hawthorne expressed his disappointment at the decision, but insisted the low carbon electricity source still had a key part to play in decarbonising the UK economy.
"Nuclear power has a critical role to play in helping tackle our energy needs, meeting our climate change targets and levelling up the economy through green growth and job creation," he said. "Wylfa Newydd on Anglesey and Oldbury on Severn are highly desirable sites for new nuclear build. We will do our utmost to facilitate the prospects for development which will bring the major local, national and environmental benefits that nuclear can uniquely deliver as we push to transition to a net zero carbon economy by 2050."
The decision is a major blow to the UK's embattled nuclear ambitions, leaving EDF's Hinkley Point C project in Somerset as the only new nuclear power plant currently under construction in the UK, although the French firm has also tabled plans for a second project at Sizewell in Suffolk.
The government is expected to finally publish its long-awaited Energy White Paper in the coming months setting out further details of its strategy for delivering a net zero electricity industry in the 2030s, although a publication date has not been confirmed and it remains unclear what role nuclear would have in the government's plans.
Tom Greatrex, chief executive of the UK's Nuclear Industry Association (NIA), also voiced his disappointment at today's announcement, which he said "underscores the urgent need for progress on new nuclear projects in the UK if net zero carbon emissions is to become a reality".
But he said it was "welcome news" Hitachi and Horizon would continue to coordinate with the government and other stakeholders over the two sites, and insisted the nuclear power sector still "has a bright future in this country".
"No electricity generation source has saved as much carbon as nuclear power has, while generating skilled, stable and long term employment," said Greatrex. "The government can secure these economic and environmental opportunities for future generations by setting out a clear pathway for new nuclear power in forthcoming policy announcements."
Proponents of nuclear power argue that in generating consistent, baseload power, nuclear offers crucial advantages over smaller, more intermittent renewable electricity sources such as wind and solar which are reliant on weather conditions and will require supporting energy storage and smart grid technologies if they are to become the backbone of the UK grid.
A new report yesterday also touted the potential for smaller, modular nuclear reactors to help produce green hydrogen, a fuel which is increasingly seen as a zero emission solution for decarbonising aviation, shipping, heating and heavy industries such as cement and steel making.
But nuclear remains controversial due to its high costs, safety concerns, and radioactive waste, and detractors argue rapid cost and technological progress with renewable energy technologies supersedes the requirement for large, baseload nuclear power in the UK's drive to net zero emissions by 2050.
Responding to the Horizon announcement, Greenpeace's Doug Parr urged the government to now shelve its plans for a new fleet of reactors and step up support for a wave of renewables projects. "Nuclear power's ever-rising costs overtook the ever-falling costs of renewables years ago, and a new reactor now supplies electricity at more than double the price of a new offshore wind farm," he said. "Propping up this dying industry has become more and more difficult and expensive for the handful of governments still hoping for a nuclear renaissance. We're hoping the UK government will take Hitachi's decision to abandon Wylfa as final confirmation of what the energy market has long been trying to tell them - Britain's future is renewable."
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