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Key deals signed for Wylfa new nuclear plant in UK

A deal has been signed today to open the door to finance for a new nuclear power station to be built in the UK by the Hitachi-owned company Horizon.

Hitachi and Horizon Nuclear Power signed a co-operation agreement with the government’s Treasury department to promote external financing under the UK Guarantee Scheme for the ‘Wylfa Newydd’ plant, which Horizon wants to build on the island of Anglesey in Wales.

The UK Guarantee Scheme is a pot of £40bn of financial guarantees for certain infrastructure projects.UK nuclear newbuild

Hitachi and Horizon hope to have the full range of licences and permissions for Wylfa Newydd in place by 2018 and plans to follow it with another new reactor at Oldbury in England.

External finance, potentially from both equity and debt sources, will be needed to fund the construction of Wylfa and Horizon said “the UK Guarantee Scheme is considered to be a key component of any future financing structure”.

Masaharu Hanyu, deputy chairman of Hitachi Europe, said: “This co-operation agreement is a welcome demonstration of the UK government’s commitment to making a new generation of nuclear power stations a reality.”

Horizon chief operating officer Alan Raymant added: “This is excellent news. It will build confidence amongst our supply chain, future workforce, local communities, and importantly potential investors.”

Chief executive of the Nuclear Industry Association, Keith Parker, said: “This is excellent news for the people of North Wales, for the UK supply chain and for the country as a whole. This announcement reinforces the government’s commitment to new nuclear as having a major role in Britain’s clean energy infrastructure for decades to come.”

Horizon has also today signed strategic contracts with three major UK based companies – AMEC, Atkins and Cavendish Nuclear – for the provision of engineering and related technical services.

The three companies will between them provide support to Horizon in development and planning; site investigation; engineering; environmental permitting and waste management and planning and project management.

Alan Raymant said the signing of the contracts underlined Horizon’s “aspiration to become a leading new nuclear utility company and demonstrate real momentum”. 

“Working with our new framework suppliers and their supply chains, I‘m confident we will continue to progress our detailed plans as we prepare for our first formal public consultation next year. The signing of these contracts also highlights our commitment to working with UK suppliers where possible.”   

George Borovas, head of international nuclear projects at global law firm Pillsbury, said that the deal struck with the Treasury “demonstrates the heightened and growing willingness by the British government to provide the financial certainty needed, before investors commit to providing the next generation of nuclear power plants”.

Todays’s deal comes in the wake of the government agreeing terms with EDF in October for the go-ahead of Hinkley Point C (pictured as an artist’s impression), which looks set to be the first new nuclear plant built in the UK for 20 years, and Borovas added: “Where there were once obstacles, there is now opportunity and… firm evidence of the coalition’s intention to build on the potential unleashed by its deal with EDF”.

“The recent strike price agreement brokered by DECC and EDF appears to have ‘broken the dam’ of past investor reluctance, and today’s offer of a UK guarantee is sure to be viewed by international investors, especially in China and Japan, as a sign that Britain is well and truly one of the most attractive European investment environments.”

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