UK may shoulder cost of new nuclear plants

The UK and Japanese governments may fund a new nuclear power station planned in Wales, in what seems to be a reversal of the UK’s insistence that its planned new fleet of reactors be funded by developers only.

The idea would be to capitalise on governments’ ability to borrow more cheaply than the private sector, thus reducing overall project costs.

The new thinking on Wales’ Wylfa power station on the Isle of Anglesey (pictured), being developed by Horizon, a subsidiary of Hitachi, comes after heavy criticism levelled at the £20bn Hinkley Point C plant under construction in Somerset.

Damned for being expensive and risky, that project is being funded by heavily indebted EDF, of France, and China’s state-owned nuclear power company, China General Nuclear (CGN).

EDF and CGN will have to recoup their money from consumers, through a high price on electricity guaranteed by the UK government.

On Wylfa, the governments in London and Tokyo have exchanged letters agreeing to consider contributing to its financing, newspaper The Financial Times reported yesterday, citing several people involved in the process.

The UK’s National Audit Office last year declared Hinkley a "risky and expensive" deal and said government should have considered taking on some of the construction risks to lower costs for consumers.

One senior UK government figure told The Financial Times that ministers were looking for "creative solutions" for future projects that would "not look like Hinkley" but would also be different to the "1950s model" of governments shouldering the full cost of nuclear construction.

Image: Render of the new nuclear power plant at the existing nuclear site of Wylfa, on the Isle of Anglesey, Wales (Horison)