Business, Energy and Industry Secretary Greg Clark has confirmed the government has entered negotiations with Hitachi over its ‘Horizon’ new nuclear project at Wylfa on Anglesey, North Wales.
Mr Clark also confirmed that direct public investment in the project was being discussed alongside investment from Japanese government agencies and Hitachi itself, a significant change in policy direction for funding new energy infrastructure projects.
Public and private investment on the cards
The twin reactor project would have a generation capacity of 2,700MW and be based on established Advanced Boiling Water Reactor technology. Although direct public investment looks likely to be part of the overall deal, Mr Clark has also made it clear that the government expects the private sector to fund future new nuclear projects.
He said: “This is an important next step for the project, although no decision has been taken yet to proceed with the project, 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 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.”
Some commentators are suggesting the government taking a substantial stake in the project should help a significantly lower strike price for electricity from the project to be achieved, with a potentially lower impact on consumer’s bills.
Energy expert view
“This announcement is significant in that the government is considering direct investment in a major energy infrastructure project for the first time in many years. It’s interesting that the strike price, which would be underpinned through consumer bills, could be significantly lower than that for the Hinkley Point new nuclear project. So the balance seems to be in part around direct investment versus subsidised power prices.”
Alastair Fells MEI, Incorporated Eng, PG Dip Fuel Tech, BSc Hons