LONDON - The British government and Hitachi Ltd. have agreed to begin full-scale negotiations on the Japanese firm potentially constructing a nuclear power plant in Wales.
“I am pleased to confirm that today Hitachi and the U.K. government have decided to enter into negotiations in relation to the proposed Wylfa Newydd project,” Business and Energy Secretary Greg Clark said in a statement released Monday.
The announcement came after both sides agreed on a cost-sharing mix for the project to build two advanced boiling water reactors on the Isle of Anglesey in Wales.
Under the agreement, the British side would shoulder about two-thirds of the estimated ¥3 trillion ($23.5 billion) cost through direct government investment and loan guarantees.
“For this project, the government will be considering direct investment alongside Hitachi, and the Japanese government agencies and other parties,” Clark said.
Hitachi said separately Tuesday it will assess the project’s business case before making a final decision on whether to proceed.
The Japanese government welcomed the agreement. The project would be a boon to Prime Minister Shinzo Abe’s goal of exporting nuclear power technology to drive economic growth. Abe’s push comes as other nuclear projects abroad involving Japanese companies are struggling due to increased costs for safety measures.
“It is a very welcome move as (the agreement) shows that the negotiations are making progress,” Minister of Economy, Trade and Industry Hiroshige Seko said at a news conference in Tokyo.
Hitachi has been considering withdrawing from the Welsh project.
In a meeting in London on May 3, Chairman Hiroaki Nakanishi made a personal request to British Prime Minister Theresa May to support the company’s construction operations.
It remains unclear whether the project as a whole will be profitable, as Hitachi and the British government are reportedly at odds over the purchase price of electricity to be produced at the plant.
The purchase price offer by the British government, which is considerate of local opposition, is some 20 percent lower than the price the Japanese company desires, a source has said.
Hitachi applied for a site license to build the two reactors, aiming to start operation from the first half of the 2020s, but the total cost of the project ballooned due to increased safety requirements.