The UK government has confirmed that it will start “commercial negotiations” with Hitachi over its proposed nuclear site in Wales.
Business secretary Greg Clark announced that the UK is looking to take a £5bn stake in the Wylfa project in Anglesey.
The government will be using public money to finance its share in the £20bn project after agreeing on a tripartite investment structure under which Hitachi, the UK government and state-backed Japanese entities would become equal investment partners.
Clark said: “For this project the government will be considering direct investment alongside Hitachi and Japanese government agencies.”
“This is an important next step for the project, although no decision has been taken yet to proceed . . . and successful conclusion of these negotiations will be subject to full government, regulatory and other approvals, including but not limited to value for money, due diligence and other state aid requirements.”
“It remains the government’s objective in the longer term that new nuclear projects, like other energy infrastructure, should be financed by the private sector.”
Welcoming the announcement, Nuclear Industry Association chief executive Tom Greatrex said: “Today’s announcement, which reiterated UK government support for civil nuclear as a vital element of a future low carbon power supply and confirmed the Horizon Wylfa Newydd project as the next element of our new build programme, is good news towards meeting our decarbonisation targets.
“Nuclear power has made a massive contribution to the UK, providing reliable, secure and always available low carbon energy for sixty years. It remains the single largest source of low carbon electricity - providing more than 20% of the power the country generates for homes, businesses and public services.
“The industry particularly welcomes the news of government commitment to consider different funding models, including direct investment, for financing nuclear new build projects. This will reduce overall project costs and, in turn, the cost to consumers as we transition to a low carbon electricity system able to meet our future energy challenges.”
Earlier this month, Hitachi chairman Hiroaki Nakanishi met with prime minister Theresa May to ask for government funding for its proposed nuclear plant in Anglesey.
The firm has already spent £2bn on Horizon, which includes developing a nuclear power station at Wylfa. The 2.9 gigawatt power station is due to start generating electricity in the mid-2020s.
The developers behind Wylfa Newydd nuclear power plant have put forward proposals to clear around 121ha at the Welsh site.
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