Are we going to see suspension of nuclear power in the UK?
Wylfa Newydd, on the Isle of Anglesey, started out as a £13 billion investment in a 2,900 MW nuclear reactor adjacent to the former Wylfa reactor. However, it must now feel more like a £16 billion drain for Japanese technology enterprise, Hitachi.
In fact, Hitachi has now suspended work on both Wylfa and Oldbury nuclear power stations due to the looming prospect of Brexit, increasing costs and delays, combined with concerns of a global economic slowdown just on the horizon.
This is a significant change from when Hitachi first became involved in UK generation in 2012, acquiring Horizon, a combined venture by E.ON and npower, in accordance with parliaments’ pledge for nuclear power to be the core element of the future electricity mix.
Initially, Hitachi’s plan was to invest £20 billion total between the two sites: Wylfa Newydd and Oldbury, with the UK government fronting the rest of the bill. However, the Brexit referendum brought the future of connectivity with Europe, disconnection of Euratom and the question of funding to the front of everyone’s attention. From last June, Hitachi went through negotiations but found the terms offered were unsatisfactory, leaving the plans benched at the beginning of 2019.
This directly impacted markets, as immediate concerns for the future of UK generation came into question. The longer-term effects have yet to be seen, although there is still the potential that a deal could be made. Numerous independent studies have supported the necessity of nuclear power to provide a suitable backbone to the UK’s energy generation, following the lack of consistency that comes from renewable generation.
The scale of the Wylfa Newydd plant would dwarf every other nuclear reactor to date in the UK, with the current largest being Sizewell B at 1250 MW. Its discontinuation would wipe out 9,000 construction jobs and almost 1,000 full-time workers at the plant. Indirectly, however, the wider ramifications, according to the North Wales Economic Ambition Board, would cost the Welsh economy £5.7 billion.
Could this be the beginning of suspension of nuclear power in the UK?
Concerns surrounding UK nuclear generation has been mounting since 2011, following the Fukushima incident, the issue of nuclear waste, the improvement of renewable generation and the collusion between EDF, Westinghouse, Areva and the UK government to maintain public support for nuclear generation.
The UK currently has 15 reactors, responsible for generating around 21% of the country’s electricity, but almost half of this current capacity is due to be retired by 2025 and with new constructions, like Wylfa Newydd, being suspended the future of nuclear is in question.
In addition to this, plans to develop 12 new reactors became 6, of which a further 3 have since been shelved or abandoned. Toshiba has already withdrawn their interest in a £10 billion investment to the Moorside site in Cumbria, citing a lack of clarity from the government regarding funding.
In support of the suspension of nuclear power, the chief executive of SSE, Alistair Phillips-Davies, has said the UK government invest instead in wind power generation:
“The new nuclear programme looks in real trouble and was due to come in well above the costs of offshore wind anyway. Nuclear has a role to play but even with substantial government support on offer I doubt its ability to deliver cost effectively in the 2020s,” he said.
To finish on a controversial note, Hitachi’s chairman, Hiroaki Nakanishi, stated in an interview last week that he believes that “nationalisation is the only path” to a solution to the current suspension of the nuclear sites. For this to be done, the government would have to change the law before taking a majority stake in the venture and fill the hole left by the private sector.
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