Hitachi to abandon £20bn UK nuclear project

Spiralling costs of building a new atomic power station in Wales prompts Japanese giant to pull out of the project

Plans for a £20bn nuclear power station at Wylfa in Wales are likely to be scrapped with Hitachi, the Japanese giant bankrolling the programme, set to pull out.

At the start of the year Hitachi put the programme on ice because of worries about spiralling costs and the company failing to strike a deal over its funding with the UK Government.

The Isle of Anglesey Council, which covers the area where the two-reactor plant was due to be built, is understood to have received written confirmation from the Japanese company that it is withdrawing from the project. Reports suggest that a Hitachi board meeting on Wednesday will confirm the decision.

In June the company said it had hoped to secure financial support for the project from the Government but this now appears to have evaporated. 

Hitachi's decision to abandon the "Horizon Nuclear" power plant, which was supposed to power 5m homes, will strike a blow to the UK's hopes of hitting its net zero carbon target by 2050.

Britain has struggled to finance the development of nuclear power, with the Anglesey project having being purchased from German energy companies in 2012.

Two years ago Toshiba abandoned plans to construct a new nuclear power station at Moorside in Cumbria. Britain has been trying to attract foreign investors to take on the huge upfront costs and risks of building new reactors in return for the long-term and stable incomes they will bring once established.

Hitachi’s withdrawal may also raise concerns about Chinese involvement in the UK's nuclear power sector. 

China General Nuclear Power Group has a 33pc equity stake in Britain’s other new nuclear power plant under construction, Hinkley Point in Somerset, and the state-backed business is also set to have a key role in two other planned new reactors at Sizewell in Cumbria and Bradwell in Essex.