Hitachi chairman Hiroaki Nakanishi will shortly travel to the UK to ask the government to take a direct stake in the company that is to build and operate a nuclear power plant in Anglesey, Wales. The Wylfa project is now 100% owned by Hitachi Group. Hitachi expects the U.K. government will invite private British companies to participate and hopes to reduce its own stake to less than 50%.
Hitachi has recently concluded that the risk of proceeding with the Anglesey project, at an estimated cost of more than 3 trillion yen ($27.5 billion), is too great to manage on its own as a private company. It plans to withdraw from the project if restructuring negotiations fall through. Such a move would have significant repercussions for nuclear power policy for both Britain and Japan.
Hitachi acquired complete ownership of the Horizon Nuclear Power in 2012 for 89 billion yen as part of its plan to expand its nuclear business into foreign markets. It has spent about 200 billion yen preparing for Horizon's first project, the construction of the Wylfa plant, but hopes to lower its stake in Horizon to less than 50% before construction begins.
In response to Hitachi's concerns, the British government has proposed that UK interests and Japanese public and private interests join with Hitachi to move Anglesey forward. The three sets of shareholders would each put 300 billion yen into the project, giving each a one-third stake. According to sources, the company and the Japanese government see it as too risky for Japanese interests to retain a majority shareholding and hope that British interests will acquire a controlling stake.
Other key project terms also remain unsettled, including the degree to which London would guarantee the 2 trillion yen in loans that Hitachi sees as needed to finance the development and the price to be paid to Hitachi for the plant’s output. London's proposed price is 20% lower than that requested by Hitachi. The Japanese government plans to guarantee the project's loans.
The UK in December approved the design of the reactor that Hitachi plans to use in Anglesey. The project is now in its final pre-construction phase, with construction slated begin next year. With its domestic nuclear industry still crippled by the legacy of the 2011 Fukushima nuclear accident, Japan has been eager to promote nuclear exports.
• The news drew a strong response from head of Energy at Greenpeace UK Hannah Martin, who said “The market will not invest in new reactors, globally, and nuclear states are trying to minimise their own exposure to this failing industry. Apart from the UK, where for some inexplicable reason nuclear is still seen as a viable option. Unfortunately, when you’re the only customer, you can’t split the bill, and this what we're seeing now as reactor manufacturers insist on the UK taxpayer taking a stake in projects that no bank or hedge fund will touch. None of this economic pain is necessary, of course, there are now far cheaper low carbon options available, if only the government would stop looking back at the 20th century and imagining that it is the future.”