Cattle graze near the Wylfa plant in Anglesey, Wales.

Hitachi deal to boost UK nuclear

Japan’s Hitachi has signed a £700 million deal that will enable it to start building the next generation of power plants.

Hitachi is buying Horizon Nuclear Power - which has the rights to build reactors at Wylfa on Anglesey, North Wales, and Oldbury in Gloucestershire - from its German owners E.ON and RWE npower.

The Government and unions welcomed the deal which drives forward plans for a fleet of new nuclear power stations across the UK.

The facilities, which could be feeding electricity into the national grid in the first half of the 2020s, are expected to generate power equivalent to up to 14 million homes over 60 years.

Up to 6,000 jobs are expected to be created during construction at each site, with a further 1,000 permanent jobs at both locations once operational.

Hitachi has also signed supply chain deals with UK engineering firms Rolls-Royce and Babcock International and has pledged to establish a module assembly facility in the UK.

The Horizon venture was set up in 2009 as part of the drive to meet the UK's carbon reduction goals, but RWE and E.ON put the business up for sale in March after Germany's move to abandon nuclear power in the wake of Japan's Fukushima disaster.

Doubts have grown about the private sector's commitment to the UK's nuclear programme, but Prime Minister David Cameron said today's announcement was a "decades-long, multibillion-pound vote of confidence" in the UK.

He said: "It will support up to 12,000 jobs during construction and thousands more permanent highly skilled roles once the new power plants are operational, as well as stimulating exciting new industrial investments in the UK's nuclear supply chain."

Energy and Climate Change Secretary Edward Davey said: "Hitachi bring with them decades of expertise, and are responsible for building some of the most advanced nuclear reactors on time and on budget, so I welcome their commitment to helping build a low carbon secure energy future for the UK. I particularly welcome Hitachi's firm commitment to involve the UK supply chain and local workforce.

"New nuclear isn't only about keeping the lights on and emissions down, it's an industrial strategy with big potential wins."

Mike Clancy, general secretary-designate of the Prospect union, said: "The Horizon venture is an important milestone in securing future low-carbon energy generation capacity within the UK and its importance to local and national economies cannot be overstated.

"While Hitachi's advanced boiling water reactor design has yet to undergo the UK's generic design assessment approval process, it is a proven technology and therefore any construction in the UK will benefit from lessons learned from its construction in Japan."

Gary Smith, national officer of the GMB union, said: "This is positive news. However, we should be under no illusions that there are still real concerns with UK energy policy.

"Nothing is going to be completed by Horizon before 2020 so that poses the question, are we just going to burn more gas at a time wholesale prices are going up, to cover gaps in generating capacity?"

Unite national officer Kevin Coyne said: "This is good news for the UK nuclear industry, for jobs and for a low carbon future. There are massive job opportunities here in the UK and we urge Hitachi to maximise the UK supply chain.

"At a time when Britain's economy is struggling to grow and good jobs are scarce it is hugely important that the players entering the UK energy sector ensure that all parties involved throughout in this project commit to good quality direct employment that benefits local communities, apprenticeships and skills - especially for young people."

Analysts believe the deal removes uncertainty over the future of nuclear power in the UK, while the value of the sale was higher than many had expected.

Hitachi president Hiroaki Nakanishi said: "Today starts our 100-year commitment to the UK and its vision to achieve a long-term, secure, low-carbon and affordable energy supply.

"We look forward to sharing Hitachi's corporate vision and nuclear business policy with the management and employees of Horizon, and working harmoniously with UK companies and stakeholders for the delivery of this vital part of Britain's national infrastructure and the creation of a strong UK nuclear power company."

Hitachi said it will make a "significant" investment in training engineers, construction teams and operating staff for the plants, and work with its partners and with local colleges and universities to develop training programmes.

The move will create a "strong and permanent base" of nuclear skills in the UK which also have a global demand, the firm added.

Corin Taylor, senior economic adviser at the Institute of Directors, said: "Nuclear is one of the best ways to generate reliable low-carbon electricity at scale, and the sale of Horizon gives the new nuclear programme a real boost.

"Hitachi reactors are being built on time and on budget in Japan and there is no reason why we can't expect the same in this country.

"The reactor approval process now needs to be undertaken swiftly and a realistic strike price set."

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