Hitachi shelves $20 billion nuclear power plant in UK

Hitachi has shelved plans for a $20 billion nuclear power plant in the United Kingdom, raising questions over future energy supplies in the country.

The Japanese conglomerate said in a statement Thursday that it has stopped work on the project in Wales after failing to reach a deal with the British government.

Horizon Nuclear Power, the company’s UK nuclear division, said the decision was made after several years of negotiations over financing with UK authorities failed to yield results.

Hitachi is the second big Japanese company to back away from the UK nuclear energy industry in recent months.

In November, Toshiba (TOSBF) said it would shut down its UK nuclear power operation NuGen early this year after failing to find a buyer.

The moves by Hitachi and Toshiba will make it harder for Britain to meet its targets to reduce carbon emissions. They also throw plans to replace the country’s aging nuclear plants into disarray.

“The urgent need for further new nuclear capacity in the United Kingdom should not be underestimated,” said Tom Greatrex, chief executive of Britain’s Nuclear Industry Association.

“Without a diverse low carbon mix and with increasing demand to power electric vehicles, we run the risk of becoming more reliant on burning fossil fuels to produce our electricity,” he added.

The Hitachi plant would have provided about 6% of Britain’s total electricity needs, according to the British government.

The £16 billion ($20.6 billion) project was expected to create work for up to 8,500 people during construction and 850 jobs once it came online in the mid-2020s. Hitachi had also planned to invest in local infrastructure, such as transport links.

The company said it would “keep the option to resume development in future.” But it said in a stock market filing that it would write down 300 billion yen ($2.8 billion) already spent on the project.

“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,” Duncan Hawthorne, CEO of Horizon Nuclear Power, said in a statement.