For Wales, Nuclear Plant Would Mean New Jobs. For the U.K., It May Mean More.

https://www.nytimes.com/2019/01/07/business/energy-environment/wales-hitachi-nuclear-plant-jobs.html

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CEMAES, Wales — Not far from this harbor village of brightly painted houses on Anglesey Island, a huge construction project is underway. Gates and wire fences are up. Archaeologists are sifting through dirt to document stony dwellings dating from 100 B.C. A technical school is welcoming apprentices eager to learn how to maneuver in high-tech control rooms and operate water-cooling systems.

The activity is all tied to a plan by Horizon Nuclear Power to turn this rugged outpost into the home of a plant that could be critical not just to the company, but to the Welsh economy and Britain’s energy future.

Horizon, a subsidiary of the Japanese conglomerate Hitachi, is in private talks with the British government over how and when it might build a nuclear plant here at the northern tip of Wales. If the parties reach a deal on how the project’s estimated 15 billion pound ($18.95 billion) cost will be paid, this stronghold of Welsh culture will change in ways that residents are just starting to consider.

Some people worry about nonstop truck traffic, the blasting of rock and soil, and the waves of outsiders the plant would bring to live and work in the area.

Others in northern Wales herald the economic benefit the potentially enormous investment could have. They see the Horizon plant, which is expected to produce enough electricity for 5.5 million homes, as a vehicle for rebirth.

The British government, eager for reliable, low-carbon energy to replace aging coal plants and nuclear reactors, has been encouraging. Greg Clark, the business and energy minister, told Parliament in June that the new Wales plant, Wylfa Newydd, was “next” in Britain’s nuclear “pipeline” and that the government would consider making a “direct investment” in it with Japanese government agencies.

But Horizon and Hitachi executives are frustrated with the pace of the talks. In an interview, Duncan Hawthorne, Horizon’s chief executive, said Hitachi had spent “billions” of pounds on the project, including the cost of acquiring it from two German utilities in 2012.

“It is a very long and expensive road here,” he said, adding that “the next several months will be critical.”

Hitachi, without providing exact figures, wants government financing from Britain and Japan to help attract outside investors like pension funds that seek long-term income streams. Investments by the governments would also help lower Horizon’s risk rating.

The Wylfa Newydd plant, with two giant reactors, would be just the second nuclear plant to be built in the United Kingdom since the 1990s. Once a world leader, Britain’s nuclear industry atrophied after serious accidents in Ukraine and the United States spurred broad resistance to nuclear power.

Britain has legally committed to cutting carbon emissions. As a result, the government is reassessing its energy options amid a decline in natural gas from the North Sea oil fields and a decision to phase out the use of coal.

Proponents of wind and solar energy say Britain should be putting its money there, but those sources have not been able to match the steady supply of power nuclear energy produces. So nuclear plants are back in vogue. One is being built at Hinkley Point in southwest England, and at least four more are planned.

“It’s hard to conceive that nuclear does not have an important role to play,” said Steve Holliday, a former chief executive of National Grid, the British power system operator.

Britain’s renewed interest in nuclear power stands out among Western countries, where such plants have become forbiddingly costly and complex. The challenges were evident in October when Toshiba scrapped plans to build a plant in northern England.

Delays and cost overruns at plants being built at Olkiluoto, Finland, and Flamanville, France, have hurt the industry’s reputation elsewhere in Europe. Germany, the region’s top manufacturing power, is phasing out nuclear power. An abundance of cheap shale gas has undercut interest in the United States, although two new plants are in the works.

Hitachi is intent on the plant in Wales, Mr. Hawthorne said, because it would provide a key European foothold after the 2011 Fukushima accident dampened interest in Japan. Horizon executives have described the area as an ideal location, with water from the sea to be used in the cooling system and the rocky terrain able to bear the massive concrete structure that nuclear power demands.

For Anglesey Island, with a population of about 70,000, the project would provide a huge lift and create around 850 permanent jobs. Many local residents favor it because a smaller nuclear facility on a nearby seaside bluff was a dependable employer for nearly 50 years before closing in 2015.

Gareth Winston Roberts, a local councilor who worked at the plant — known as Wylfa, after the bluff — before retiring in the 1990s, called it “a godsend.”

“It kept people here,” he said. “It produced a lot of engineers.”

Gwen Parry-Jones worked there beginning in 1989. Since April, she has been Horizon’s executive director and is steering the negotiations with the government. For the previous decade, she was an executive at EDF Energy, a French-owned utility that has taken over much of Britain’s nuclear system.

“I benefited from having a nuclear power station effectively on my doorstep as a young scientist,” she said. “I strongly feel that we are benefiting from the fact that there is an existing nuclear power station here.”

The need for jobs is obvious. The Wylfa plant still employs some technicians to remove fuel rods, but a local chemical plant closed in 2004 and an aluminum smelter closed in 2009. Britain’s plan to leave the European Union this year could hurt another key employer, the port at Holyhead, a hub for trade with Ireland, an E.U. member.

“We find ourselves in a position where we need that one big project,” said Edward T. Jones, a local cattle farmer who also lectures on economics at Bangor Business School in North Wales.

Some local leaders also see the plant as a vehicle for preserving the island’s character.

“We still have got the Welsh language, and it’s quite a strong part of our community,” said Llinos Medi, the leader of the island’s governing council. “With work we can keep our young people and our culture and our Welsh language.”

But some residents believe the plant could damage the island’s rural charm and hurt tourism. A walk along the pebble beach at Cemlyn Bay, a wildlife sanctuary next to the construction site, suggests why.

The old Wylfa plant sits at the beach’s eastern end. Because the new one will be far larger, much of the surrounding landscape must be reshaped to accommodate it. The North Wales Wildlife Trust has been asking that fragile wildlife populations — thousands of terns nest here every summer — be taken into consideration.

“It is going to completely spoil the area,” said Simon Walker, a retired businessman who was on the shore with his wife, Susan, watching his four dogs splash in the water.

Last month, in a nod to environmental concerns, the Welsh government said it would review the site preparations. Horizon said it disagreed with the move, which could result in delays.

Whether the plant proceeds will probably come down to how it will be paid for.

A key yardstick is the Hinkley Point facility in southwest England. The government is financing that plant’s £20 billion cost through a so-called contract for difference, an arrangement that guarantees developers of big energy projects a long-term base rate for the power they produce. If the price of electricity falls below that rate, customers pay higher bills to make up the difference.

At Hinkley Point, the British government guaranteed the owners an inflation-indexed price of £92.50 per megawatt-hour for 35 years. That is about 50 percent higher than current energy rates. Not surprisingly, the government has been criticized for potentially saddling consumers with expensive electricity for decades.

With Horizon, the British government is pushing for a rate up to 30 percent lower than what it agreed to for Hinkley Point. Mr. Hawthorne of Horizon said he anticipated the Wales plant could provide power at “a significant price reduction” compared with Hinkley Point.

The question is whether a British government consumed with the process of leaving the European Union is prepared to move quickly on the Anglesey Island project — and how pivotal it believes the plant is to its climate change promises.