Government faces headache as Hitachi pulls out of £16bn Wylfa nuclear plant in Wales

British Government Signs A Deal For New Nuclear Power Plant
The government said it is reviewing alternative funding models for the plant (Source: Getty)

The government has reasserted it commitment to developing nuclear power after Hitachi pulled out of the Wylfa nuclear power plant this morning.


The company took the decision to suspend work on the £16bn facility behind Hinkley Point C, which was meant to produce six per cent of the UK’s electricity, after holding detailed discussions with the government.

Read more: Hitachi claims 'no decision' has been made on future of UK nuclear plant

But despite the move, Hitachi has indicated that it will keep ownership of the site, while discussing options with the government.

“I am very sorry to say that despite the best efforts of everyone involved we’ve not been able to reach an agreement to the satisfaction of all concerned," said Duncan Hawthorne, the chief executive of Hitachi subsidiary of Horizon Nuclear Power.


“As a result we will be suspending the development of the Wylfa Newydd project, as well as work related to Oldbury, until a solution can be found. In the meantime we will take steps to reduce our presence but keep the option to resume development in future.”

The move puts thousands of jobs at risk and will cause headaches for a government which aims to increase nuclear’s share of energy production from a quarter to a third by 2035.

It could also come at a cost to taxpayers if the government decides to step in and rescue the project.

However, the move also hits Hitachi. The company said it will take a write-down of ¥300bn (£2.14bn) at its British nuclear unit as it suspends the project.

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “As the business secretary [Greg Clark] set out in June, any deal needs to represent value for money and be the right one for UK consumers and taxpayers.”

They continued: “This government is committed to the nuclear sector, giving the go ahead to the first new nuclear power station in a generation at Hinkley Point C, investing £200 million through our recent sector, which includes millions for advanced nuclear technologies.”

“We are also reviewing alternative funding models for future nuclear projects and will update on these findings in summer 2019.”

Read more: Toshiba withdraws from UK nuclear power station

Hitachi was struggling to find other investors to join it in the project, and had called on the government to step in to provide support.

The Japanese company bought into the project when it paid £697m to two German power companies in 2012.