U.K. in Talks to Build New Nuclear Power Plant in Wales

(Bloomberg) --

The U.K. is considering fresh proposals for building a new nuclear power project at the Wylfa site in Wales a year after another plan was shelved after a lack of funding. 

The government has said that nuclear is vital for its plans to reach net-zero emissions by the middle of this century, but has struggled to get large scale projects built. The latest push for atomic power comes as Britain struggles with an energy crunch, with surging natural gas and electricity prices increasing the risk of blackouts this winter.   

Business Secretary Kwasi Kwarteng is pushing the Treasury for a new funding mechanism to attract investors to the industry amid concerns that by the early 2030s there won’t be enough nuclear capacity to generate sufficient baseload power as fossil fuel-fired stations are phased out, according to a person familiar with the matter.

The Department of Business, Energy and Industrial Strategy says it held “exploratory” talks with two groups for the Wylfa site. Proposals have come from a U.S. consortium involving Bechtel Group Inc. and Westinghouse Electric Co. LLC for a large-scale AP1000 reactor, and from Shearwater Group Plc for a small modular reactor project combined with a wind farm, Declan Burke, director of nuclear projects at the government department told a group of lawmakers on Thursday.

“Wylfa is a site we’re familiar with and it’s been an interest for an AP1000 for some years,” said Lindsay Roche, director of government affairs at Westinghouse U.K. “We’ve had really good discussions with Beis over the past 12 months.”

Roche said the consortium is asking for a package of “tens of millions of pounds of support” from the government.

Hitachi Ltd. exited a long-planned nuclear project at the Wylfa site last year after it couldn’t agree a funding deal with the government. Further plans to develop the site were shelved at the beginning of this year. 

Prime Minister Boris Johnson has promised to commit to at least one-large scale reactor by 2025, and the government is in financing talks with Electricite de France SA for its Sizewell C plant. 

Record high gas and power prices have caused a number of energy suppliers to collapse in Britain, forcing Kwarteng to reassure voters this week that supplies won’t run out this winter. The crunch in the U.K., partly because of a temporary lack of wind power, is bringing talk about boosting nuclear back on the table.

“You need nuclear alongside variable output from wind and solar, then you’re not only minimizing your emissions and getting close to net zero and the 2050 targets, but you’re significantly increasing energy security and insulating yourself from what’s been happening in international gas markets,” Tom Greatrex, chief executive officer of the Nuclear Industry Association.

(Updates with nuclear funding in third paragraph.)

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