Government must work hard to keep nuclear plans on track

Not so long ago there was an apparently irresistable momentum to the UK’s nuclear energy plans. Even the 2011 Fukushima disaster, an incident that curbed the nuclear energy ambitions of many countries around the world, did little to dent the UK’s rekindled passion for fission.

At least, that’s how it seemed initially. But when, earlier this year, German firms E.On and RWE withdrew from the UK’s Horizon nuclear power venture it became apparent that many industry observers had underestimated that fallout from Fukushima.

While it’s not without a certain irony that UK nuclear plans have now been revived by a firm from a country in the process of turning its back on the energy source, yesterday’s announcement that Japanese industrial giant Hitachi has signed a £700 milion deal to buy Horizon Power is welcome news for the UK energy sector.

The plan involves building two to three c1,300MW plants using Hitachi’s advanced boiling water reactor (ABWR) technology at each of Horizon’s sites at Wylfa, Anglesey, and Oldbury, Gloucestershire, with the first unit becoming operational in the first half of the 2020s. As well as creating thousands of construction jobs, British engineering expertise will also play a major role in the new plants with Babcock International and Rolls-Royce signing agreements with Hitachi to plan and deliver the programme.

Hailed by David Cameron as a “decades long multibillion-pound vote of confidence” in the UK, the announcement couldn’t have come at a better time for a government that has faced widespread criticism over its perceived lack of energy policy, and should help shore up wavering investor confidence in the UK energy industry.

And though the government would struggle to persuade people that the fortuitous timing of the deal is a sign that it’s finally settled on a coherent energy policy, the decision to announce the shortlists for its CCS competition on the same day at least indicates that it’s serious about creating a buzz around the UK energy sector.

However there are still hurdles to overcome if the Horizon project is to progress. The government needs to agree an energy price with Hitachi, and the company’s advanced boiling water reactor (ABWR), though tried and tested elsewhere in the world, will need to go through a fairly lengthy licensing process.

Hitachi should be a strong ally throughout this process. Japan’s nuclear industry has been hit hard by the events of the last 18 months, and in the face of a vanishing domestic market and a shrinking global appetite for nuclear power, the UK represents a releatively safe haven for investors. For the sake of our future energy needs, and the big benefits the Horizon scheme will bring to the UK economy we must hope that a government with an increasingly patchy track record of delivering on its promises doesn’t get this one wrong,