The supply chain working on the Wylfa nuclear power station project in North Wales is being “run down” after project developer Hitachi and the government admitted they had failed to agree funding terms.
Hitachi’s UK nuclear arm Horizon Nuclear Power announced yesterday that work on the £20bn new power station on Anglesey is to be suspended. It has now admitted that it is to “run down” its 350-firm supply chain and hundreds of workers on site could lose their jobs.
A Horizon Nuclear Power spokesperson said that following a staff consultation next week, a “small number” of staff will remain to maintain the Horizon site, fulfil community engagement roles on Anglesey and help with discussions with the government. This means that most of the 380 people currently employed on the site are likely to lose their jobs.
The Horizon spokesperson also confirmed that the company would begin “running down” activity with its supply chain companies. Over 350 companies are involved in the Wylfa supply chain and employ around 1,000 people.
Because the project is suspended, not cancelled, the site will remain in Hitachi ownership, unlike the Moorside site in Cumbria, which was returned to the Nuclear Decommissioning Authority when NuGen ran into financial difficulties in November.
Hitachi said its decision was down to “economic rationality as a private investor” after the company failed to reach an agreement with the government on further funding.
Speaking to Parliament yesterday, energy secretary Greg Clark said the deal offered to Hitachi was at the “limit of what could be justified”.
The government offered to take a one-third equity stake in the project, provide all required debt financing to cover construction costs and provide a contract-for-difference on the project with a strike price of £75 per MWh.
The British and Japanese governments had been in talks with Hitachi as the Japanese conglomerate struggled to secure private investment in the nuclear project.
Despite the suspension of the Wylfa project, Clark was quick to say “nuclear power still has an important role to play” in the UKs future energy market but that it “must be good value for the taxpayer and the consumer”.
Clark also added that this was not tend of the two Hitachi projects, and that further talks with the company would take place.
“[Hitachi] wishes to continue discussion with the government on bringing forward new nuclear projects at both Wyfla and Oldbury and we [the government] intend to work closely with them”.
Should we push for new nuclear or go renewable?
Energy and Climate Intelligence Unit (ECIU) head of analysis Jonathan Marshall argued for a greater push for renewable energy over new nuclear, something he says is ”well within the UK capabilities”.
“While certainly a setback in the government’s energy plans, Hitachi’s decision to walk away from Wylfa should not cause alarm bells to start ringing,” he said.
“Filling the nuclear gap with renewables would indeed require an increase in rollout, but one that is well within UK capabilities.”
Ceca director of external affairs Marie-Claude Hemming said that new nuclear power was still the best way to ensure a low carbon energy supply for the UK.
“This is an extremely disappointing decision that throws doubts on the future energy security of the UK,” she said.
“New nuclear power remains the best way of ensuring a secure future supply of low-carbon base load energy that is not reliant on external factors such as the weather”.
Nuclear Industry Association chief executive Tom Greatrex added: ”The urgent need for further new nuclear capacity in the UK should not be underestimated, with all but one of the UK’s nuclear power plants due to come off-line by 2030. If we want a balanced generation mix, the government must work with industry to deliver that vital capacity on this site
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