It’s not worth the risk. That, put bluntly, is why Hitachi has decided to suspend its plan to build two nuclear reactors on the coast of Anglesey.
This is a painful and bruisingly expensive decision to take. Hitachi will book an extraordinary loss of almost £2.5 billion as it writes off the investment it has made.
Four hundred people work on Hitachi’s Horizon project. I understand that all but around 20 will lose their jobs.
“We were really motoring” an Hitachi insider insists. Technological approval for the Advanced Boiling Water Reactors had been obtained, an application for development consent was submitted in June 2017 and was apparently progressing well. The US firm Bechtel had been appointed to help oversee construction.
This project failed because of funding and finance. Nuclear projects have a long and glorious history of delays, setbacks and cost overruns.
When Hitachi bought the site in 2012 it made it clear that it wanted a partner to share the risk. It couldn’t find one it was happy with.
The government’s big idea was to get a new generation of nuclear stations built without costing the taxpayer a penny.
The wheeze was to persuade private companies to sign “contracts for difference” - an undertaking to shoulder all the upfront construction costs.
When reactors began generating electricity they would profit as consumers paid higher bills.
While EDF accepted the challenge at Hinkley, Hitachi has decided it’s better off cutting its enormous losses.
The government offered to take a direct stake in Horizon but it wasn’t big enough to satisfy Hitachi, which wanted to own less than 50% of the project.
The government offered to underwrite some of the borrowing required to develop the site but Hitachi has decided it has reached its “exposure limit” on debt.
Construction at Wylfa was due to begin in 2021. By the mid-2020s, the government was banking on the reactors generating enough to electricity to power five and a half million homes.
The question now is where is all that electricity going to come from? Hitachi will “continue to discuss nuclear power programmes” but the Wylfa site will now be mothballed. The project is effectively dead, and the government’s vision for a low-carbon, nuclear future looks like fantasy.