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Hitachi Struggling To Find Investors For Wylfa

December 6, 2018
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By Paul Homewood

While researching the post on coal power today, I came across this new piece of news. It is translated from Japanese, so excuse the English!

 

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On April 4, it was learned that Hitachi’s nuclear power plant construction project in the UK was on the sunk. Hiroaki Nakanishi, chairman of the company, said in an interview in this interview, “We are recruiting investors but few companies respond,” he said. The plan is carried out by Hitachi’s subsidiary, Horizon Nuclear Power, and it collects the construction cost of the power plant etc. by selling revenue income. However, due to nuclear safety measures, the total project cost has expanded, and the purchase price of electricity generated is likely to be kept low, so there is a question mark on the profitability of the project. Hitachi negotiates with Japanese and English governments and companies seeking support from loans and investment to reduce risk. Of the total project cost 3 trillion yen, the UK has set a promise to finance 2 trillion yen, but it is extremely difficult to procure the remaining one trillion yen covered by capital. In an interview, Nakanishi said in an interview “It is difficult if all of the investment is not in place.

http://electricityinfo.org/news/wylfa-175/

 

Wylfa was the government’s banker card, as far as new nuclear goes, particularly after Toshiba pulled the plug on Moorside.

A Final Investment Decision for Wylfa was expected next year, but this latest news casts grave doubts.

At a rate of 143 Yen to a Pound, the cost of 3 trillion yen works out at £21 bn, for a 2.9 GW plant that is smaller than Hinkley Point (3.2 GW). Hinkley’s cost is similar to Wylfa.

I cannot therefore see how the cost of power from Wylfa can come out any less than Hinkley, unless UK Government guarantees all of the debt, thus cutting the cost of capital. If it does that, of course, it might just as well finance the whole lot up front.

This, however, would be a huge risk, given all of the things that could go wrong. It would also raise the very pertinent question of why the taxpayer should take all the risk, when Hitachi make the profit.

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39 Comments leave one →
  1. Chris Reynolds permalink
    December 6, 2018 7:50 pm

    Given that the UK has built many small nuclear power plants for its submarines over the years, why can’t these UK designs be adapted for land use and installed in several places around the UK to provide a reliable generation network?

    • Edward Cook permalink
      December 6, 2018 8:04 pm

      What exactly would be wrong with dusting off the plans of the last AGR, updating the control systems and materials quality and building that? A safe British proven design.

      • Stuart Brown permalink
        December 6, 2018 8:14 pm

        Which one would you pick? In typical British fashion they are nearly all different – and no-one wanted to buy the thing that was going to be a money-spinner for the UK.

        Honestly, I’m a big nuclear fan but the AGR is old, old tech. If we had to pick the last UK reactor built it would be Sizewell B, an American SNUPPS PWR.

      • Gerry, England permalink
        December 7, 2018 2:03 pm

        The south Koreans have a working design of reactor that we could use. Remember that the EDF design is being built in Finland and Flammanville – both are yet to work, are way behind schedule and hugely over budget.

    • December 6, 2018 9:09 pm

      Submarines use highly enriched uranium (bomb-making fuel). Not a good idea for civil purposes.

      • Gerry, England permalink
        December 7, 2018 2:03 pm

        Could the fuel being changed to something more civilian even if the output is reduced?

      • Russ Wood permalink
        December 8, 2018 12:31 pm

        Enriched Uranium? But isn’t there supposed to be a huge stockpile of this (plus plutonium) somewhere around Sellafield way?

  2. Edward Cook permalink
    December 6, 2018 8:03 pm

    What exactly would be wrong with dusting off the plans of the last AGR, updating the control systems and materials quality and building that? A safe British proven design.

  3. Stuart Brown permalink
    December 6, 2018 8:31 pm

    On the other hand…
    http://www.world-nuclear-news.org/Articles/CGN-ready-to-ramp-up-UK-ambitions

    Does anyone else think that graphic looks like something from Age of Empires? Just saying…

  4. Chris Reynolds permalink
    December 6, 2018 8:40 pm

    Rolls-Royce PWR3 seem to be good enough for our latest subs, why not a land based version?

  5. A C Osborn permalink
    December 6, 2018 8:47 pm

    It is a shame that we are not friends withe the Russians, they are selling nuclear reactors all over the place.
    Of course what is good enough for other countries wouldn’t be good enough for ours, it would have to go through years of paperwork etc, even though they are already running elsewhere.
    They have made is as difficult as possible to get these projects at reasonable prices.

  6. December 6, 2018 8:50 pm

    “It would also raise the very pertinent question of why the taxpayer should take all the risk, when Hitachi make the profit.”

    We could always re-invent the Central Electricity Generating Board. They could be given responsibility for all generation with power to decide on the mix and the authority to invest in new plant as required starting perhaps with Chris’s idea of small local nukes feeding into a local, building new CCGT on top of shale gas deposits (a bit like Drax and Ferrybridge being built on top of coal deposits).

    Come to think of it we could convert Drax back to coal given that in the real world it causes less CO2 to be omitted and in the real real world CO2 is beneficial to the environment anyway.

    I’m a dreamer.Sorry.

    • December 6, 2018 8:51 pm

      I’m sure I typed the word “grid” after “local”!!

    • Gerry, England permalink
      December 7, 2018 2:06 pm

      If we had a free market in energy then generators would use whatever means delivers the best return. And you can guess which sources would rapidly disappear. But since the government rigs the market, a reinvented CEGB would not solve the problem.

  7. December 6, 2018 9:16 pm

    As I recollect, about 75% of the cost of a nuclear power station such as Sizewell B was due to regulatory requirements, ie unnecessary safety features. I’m sure it will be worse these days. If it hadn’t been for political incompetence we would have had a fleet of 5 PWRs like Sizewell B and would have retained the expertise necessary for more advanced designs, such as SMRs.

    • December 6, 2018 11:16 pm

      Phillip: Yes, we are reaching the point where we can no longer afford politicians. Very expensive animals.
      For instance: where on earth is the investment in SMRs (small modular reactors)?. I rather fancy the thorium molten salt designs; although no expert; but they do get over the problems of enriched uranium and high pressures. Very safe I believe.

    • December 7, 2018 11:19 am

      I recall a lecture from a nuclear nabob which touched on SMRs – his distaste for the cookie-cutter production line “peas in a pod” regulatory regime that would ensue was entirely obvious – a bureaucrat and NOT the “engineer” he purported to be.

      The collection of dim witted, ignorant / incurious politically connected quangocrats that pervade nuclear regulatory bodies (and other important posts) is a feature of public bodies at present – this really *has* to change.

      What would be amusing is if the SMR concept were extended and floating nuclear plants became a thing …. tow it to site and plug in – that’d piss’em off 🙂

      • A C Osborn permalink
        December 7, 2018 12:55 pm

        I think you will find that Russia has already done so.

      • December 7, 2018 1:31 pm

        A C Osborn just testing 🙂

        Now if we can get a demo unit part way up the Thames to plug in where the demolished Tilbury station was….

  8. December 6, 2018 11:03 pm

    Wylfa provided the power for the Aluminium smelting plant in Wales. A good synergy relationship; but now gone. Why not bring the Aluminium Plant back into the equation?

    • Gerry, England permalink
      December 7, 2018 2:09 pm

      Alcan closed down because you can’t run an aluminium smelter without a reliable electricity supply. Since that happened our electricity costs have risen so there is no reason for them to return. The plant has been torn down anyway as I saw it on a Quest programme on scrap men. We don’t smelt aluminium in the UK anymore.

      • Dave Ward permalink
        December 7, 2018 4:09 pm

        “The plant has been torn down anyway as I saw it on a Quest programme on scrap men”

        It didn’t give up without a fight, as I recall…

  9. Athelstan permalink
    December 7, 2018 7:32 am

    King Coal could do the heavy lifting, new nuclear? No chance.

  10. Nordisch geo-climber permalink
    December 7, 2018 9:00 am

    Congratulations Paul on 8+ million page views. Stunning work.

  11. mikewaite permalink
    December 7, 2018 9:11 am

    Over at Jonova’ site the commenter “PeterS” has provided us with a link to a source of news on global expansion of nuclear power:
    http://www.world-nuclear.org/information-library/current-and-future-generation/plans-for-new-reactors-worldwide.aspx
    Apparently , to quote :

    -” Nuclear power capacity worldwide is increasing steadily, with about 50 reactors under construction.
    Most reactors on order or planned are in the Asian region, though there are major plans for new units in Russia.
    Significant further capacity is being created by plant upgrading.
    Plant lifetime extension programmes are maintaining capacity, particularly in the USA.
    Today there are about 450 nuclear power reactors operating in 30 countries plus Taiwan, with a combined capacity of about 400 GWe. In 2017 these provided 2506 billion kWh, about 11% of the world’s electricity.”-

    How is it that the rest of the world can do this so easily and we, with our world beating academics at Oxbridge and Imperial, cannot get even one nuclear plant up and running without technical and financial chaos.

    • MrGrimNasty permalink
      December 7, 2018 9:28 am

      Gordon Brown.

      • December 7, 2018 2:00 pm

        ahh… you do rather have a valid point there – and Labour’s hoards of quangocrats. A Desmond Degree from a provincial tertiary school and a slow rise through assorted metro councils seems adequate supervisory experience.

  12. Mike H permalink
    December 7, 2018 10:43 am

    The idea of transferring reactor technology from marine applications to civilian has been done before: it was the origin of the PWR designs.
    As Philip says, it is not feasible to use weapons-grade uranium in a civilian power station. Redesigning to use low-enrichment fuel makes the unit much bigger and then you optimise for scale as it is getting bigger anyway and you have the PWR.
    For the moment many of the world’s nuclear subs are “burning” material from weapons programmes to get rid of the stuff. It has also been “dis-enriched” (not my expression) for use in power stations under the megatons-to-megawatts programme.
    Getting anything new like a Thorium design or even the SMR to the stage where one could be built in the UK will take many years, if not decades. Even a repeat of Sizewell would probably have to go through much of the regulatory process again.
    IMHO, we are too late for nuclear to make a major contribution to our power needs as we run out of reliable, dispatchable baseload power. As said above, a few HELE coal plants and CCGTs on shale fields will be the only viable solution.

    • Stuart Brown permalink
      December 7, 2018 12:38 pm

      The Rolls Royce SMR uses standard 5% U235 Oxide fuel. It is a PWR but only 400MW, though that in the same ball park as the AGR. However, would people accept something that looks like a giant maggot? 🙂

      Hinckley C seems too big to me – any one site supplying a significant proportion of the UK demand in one chunk is surely a risky strategy for energy security?

      I wish Hitachi could build a PRISM reactor here, which would help use up all our plutonium and a goodly chunk of high level waste – but I agree it will be nigh on impossible to get such a thing approved before all our coal and nuclear stations have died of old age. I hope I see one built before I die of old age!

      Fracking is our only hope.

    • Stuart Brown permalink
      December 7, 2018 1:49 pm

      I’ve realised I’ve just done something that always bugs me when others do it. Allow me to correct that grammar before someone does it for me….

      The Rolls Royce SMR is designed to use standard 5% U235 Oxide fuel. It is a PWR design but only 400MW, though if one ever gets built, that will be in the same ball park as the AGR.

  13. Gamecock permalink
    December 7, 2018 1:22 pm

    ‘It would also raise the very pertinent question of why the taxpayer should take all the risk, when Hitachi make the profit.’

    Because taxpayers can veto completed projects. The fickle public and politicians can decide, for any reason they want to, to kill a £21 bn investment. The consequence is that if you are going to have new nuclear, the public/politicians have to put up ALL the money.

    Too much risk for private investment.

  14. Gamecock permalink
    December 7, 2018 1:31 pm

    I played golf a few times with an engineer who was in quality control during the building of a nuclear plant in Jenkinsville, SC. That project has since been canceled.

    He was an engineer. He said much of his work was inspecting welding. He said that welders had 3 professionals looking over his shoulder at all times, to insure that welds were properly done.

    This is quality control designed by people who don’t understand quality control. But that’s the kind of crap you get when politicians get around nuclear.

    As I said above, the only way you’ll get new nuclear now is if the government puts up the money.

    • Athelstan permalink
      December 7, 2018 11:26 pm

      Nuclear plant construction (with still half an eye on Three Mile Island) rightly requires and needs very high standards ‘built in’ of safety but as usual bureaucracies and paper clip assessors get in the way of experienced construction, civil, mech, nuclear mech test engineers.

  15. December 8, 2018 12:04 am

    Anyone want to give an update on the Hinckley C programme ?

    • December 8, 2018 11:54 pm

      trivia

      All I’ve heard is that local contractors absolutely detest working on the site as the bureaucracy is epic. Very little if any maintenance of construction machinery can be done on site d/t men with clipboards and attitude….. Wouldn’t be surprised to hear that it’s behind schedule big time.

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