Hitachi Plans to Exit U.K. Nuclear Power Project, Mainichi Says

Stephen Stapczynski, Bloomberg News

the Wylfa Nuclear Power Station in Bangor, Wales. , Getty Images via Bloomberg

(Bloomberg) -- Hitachi Ltd. is poised to withdraw from a proposed U.K. nuclear power plant, according to Japan’s Mainichi newspaper, the latest blow to the troubled project and the nation’s effort to replace its aging atomic fleet.

Hitachi’s board will decide as soon as Wednesday to exit the Wylfa nuclear power project in Wales, Mainichi reported, citing an unidentified person. After suspending work on the 20 billion pound ($25.7 billion) project in January 2019 after failing to reach a financing agreement with the U.K. government, the Japanese firm recently concluded it was impossible to restart work, according to Mainichi.

A Tokyo-based spokesman for Hitachi said Tuesday that the company is exploring multiple options and nothing has been decided yet.

The U.K. government had put nuclear at the heart of its effort to attract billions of pounds of investment in new power plants and create thousands of jobs, but spiraling costs, delays and much cheaper renewable power have dampened enthusiasm for the technology. Electricite de France SA’s Hinkley Point C is the only one of six mooted plants currently under construction.

Prospects for the Wylfa plant were looking slightly better last month after the Financial Times reported that Horizon Nuclear Power, Hitachi’s subsidiary developing the project, was trying to convince ministers that work could be quickly restarted if they can produce a new financing model for large nuclear power stations in the U.K.

The Japanese company had been maintaining a small staff at Horizon and continued to push for planning permission after the government began reviewing a “regulated asset base” funding model, which curbs construction risk for developers by having consumers pay upfront for a new plant through their energy bills.

Planned U.K. nuclear power projects located at Wylfa, Oldbury and Moorside have been suspended since Hitachi and Toshiba Corp. were unable to secure financing or partnerships. Over the last decade, Japan’s manufacturers scooped up nuclear projects around the world in a bid to supply their own reactor technology and support fledgling sales, but the risk of rising costs, safety concerns and stiffer competition from other energy sources has led to nearly all being scrapped.

Hitachi bought Horizon from Germany’s two largest utilities for 697 million pounds ($894 million) in 2012 with the backing of the U.K. government.