Plans for a new nuclear power station in Wales are hanging in the balance, raising the prospect of a second failed project in the space of two months following the collapse of Moorside.

Hitachi, the Japanese company behind the new Wylfa Newydd nuclear power station project on Anglesey, could pull the plug on the £14 billion project next week, according to the Nikkei Asian Review.

The company is said to be considering the “potential suspension” of the development because funding negotiations with the UK Government have “hit an impasse”.

The revelation is being keenly watched in Cumbria following the collapse of the £15bn Moorside project after its Japanese backers, Toshiba, decided to wind up its developer NuGen after failing to find a buyer to take it on.

Toshiba’s decision led to angry protest from business leaders and politicians in the county, who had demanded the Government take a direct stake in Moorside to keep the project alive.

The anger was further fuelled after it was revealed that the Government was considering taking a £5bn stake in the Wylfa Newydd, with questions raised over why the Welsh project was in the frame for publicly-backed investment, and Moorside not.

While a spokesman for Hitachi stressed “no formal decision” had been taken on whether it would follow in the footsteps of Toshiba and deliver a further hammer blow to the Government's energy policy, which is reliant on nuclear energy playing a significant role.

While Wylfa Newydd has the potential to creates thousands of jobs and generate enough electricity to power around 11 million homes, Moorside – in addition to creating 5,000 construction jobs and 1,000 operational roles – would have generated six per cent of the UK’s energy.

According to the Nikkei Asian Review, Hitachi has had trouble securing corporate investors in Japan, while “mounting opposition to May’s government within parliament over Brexit has raised questions about the future of UK nuclear policy”. 

Horizon Nuclear Power, the subsidiary of Hitachi which is dedicated to developing new nuclear power stations at both Wylfa Newydd and Oldbury in South Gloucestershire, said: “Since the Secretary of State’s statement to the House in June 2018, we’ve been in formal negotiations with the UK Government regarding financing of the Wylfa Newydd project in a way that works both for investors and the UK electricity customer. 

“This is one of the aspects of the project development phase that must be concluded before construction of Wylfa Newydd can go ahead, but the discussions are commercially confidential and we won’t be commenting on rumours or speculation.”

The Welsh Government described the reports as “worrying”, while the Unite union called on the Government to act.

Its national officer for energy Peter McIntosh, said: “We believe it may be commercial reasons that are influencing the Hitachi management due to rising costs.

“This is compounded by the Government’s stand-offish approach to the formal negotiations with the company which have been dragging on since last June.
“Government must take action now, because if the project does not proceed, it will have a devastating impact on the Welsh economy and on the UK’s ability to meet its climate change obligations.”

The former chief executive of the Nuclear Decommissioning Authority, John Clarke, was the most recent high-profile figure to question the Government’s decision not to invest in Moorside.

Describing the decision as “short sighted”, he told in-Cumbria in an exclusive interview that he thought it was “barking” that the Government was not taking a stake in all new nuclear power stations and relying on private sector companies to deal with the huge capital costs they involve.

Richard Harrington, the Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy, told the Cumbria Nuclear Conference in September that the Government could not “keep writing cheques for lots of money” when quizzed about support for Moorside as NuGen’s future hung in the balance.

NuGen is set to wind up at the end of the month with a loss of more than 100 jobs.