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Japanese technology group Hitachi confirmed this week that it would invest about £20bn in the UK nuclear sector, in a significant boost for government plans to expand the country’s nuclear power capacity.
Hitachi announced it was buying Horizon Nuclear Power, a joint venture that has plans to build as many as six new nuclear reactors at two sites in the UK, for £696m.
The deal is a big vote of confidence in Britain’s nuclear plans, which were thrown into disarray in March when Horizon’s previous owners RWE and Eon announced they were putting the venture on the block. Their move came after Germany decided to close down its nuclear plants in the aftermath of Japan’s Fukushima disaster.
There was palpable relief in the government that Horizon finally had a new owner. By 2023, Britain will have shut down all but one of its existing nuclear power plants, and badly needs new generating capacity. Nuclear is also key to the UK achieving its ambitious carbon reduction targets.
But analysts said Hitachi’s move was fraught with risk. The government is about to unveil an energy bill containing measures to attract investment into new nuclear. But there is still huge uncertainty about the price generators will be able to charge for their electricity – and consequently whether they can expect an adequate return on what are expected to be huge capital investments.
There were hopes Hitachi’s plans could provide a big boost to British industry, after the company said it had signed agreements with UK engineering groups Babcock International and Rolls-Royce Group to help deliver the Horizon projects.
David Cameron, the prime minister, said Horizon would support 12,000 jobs during construction and “thousands more” when the plants begins operating.
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