Japanese engineer Hitachi wants to sell more than half its stake in its Horizon Nuclear Power subsidiary, which is slated to build 5.4GW of installed capacity at UK sites in Anglesey and Gloucestershire.
The Nikkei Asian Review reports that Hiroaki Nakanishi, the chairman of Hitachi, is to travel to the UK for talks with Prime Minister Theresa May. He hopes to sell at least 50% of his stake to British companies to participate and hopes to reduce its own stake to less than 50%.
If no agreement can be found, Hitachi plans to withdraw from the schemes.
The move follows an internal review by Hitachi into the cost of the Wylfa Newydd project. This found that its construction cost was likely to be $27.5bn, which was judged to be too much risk for Hitachi to manage on its own. Â
The UK government has held some talks with Hitachi about finding new investors from the UK and Japan to share the risk.
One idea has been to find three sets of shareholders that would each invest $2.7bn in the scheme. It is understood that these could include the Japanese and UK governments.
If the UK state does take a holding in Wylfa, it will represent a retreat from the previous Labour government’s position that no public money would be spent on the UK’s third generation reactor building programme.
Wylfa also has fundamental problems with its financing and business case. The scheme is relying on state guarantees for some of the $18bn in loans the project will require. It was reported last year that Nippon Export and Investment Insurance will guarantee some of the money, and it is hoped that the rest will be covered by the UK government, but no deal has been reached on this.
Another stumbling block is the price to be paid of Wylfa’s electricity. At present the government’s offer is 20% less than Hitachi’s preferred selling price.Â Â
The Wylfa scheme is to be built on the site of a decommissioned Magnox facility. The plan is to build two advanced boiling water reactors (ABWR) with an installed capacity of 3GW. Construction was to have begun this year, with completion scheduled for the mid-2020s.
Horizon was originally a joint venture between two German utilities, E.ON and RWE. Hitachi acquired complete ownership of Horizon in 2012 for $800m as part of its plan to expand into foreign markets. It has already spent about $1.8bn since 2015 on preparing the site.
Image: Anglesey’s original Magnox reactor, in use between 1971 and 2015 (Panoramio)