Wylfa B nuclear plant: firms drop joint project plans

Two power firms have shelved plans to build a new nuclear power station on Anglesey, casting doubt on thousands of jobs.

E.ON and RWE npower made the decision on Wyla B, intended to operate from 2025, after a strategic review.

They are looking for a new owner for Horizon Nuclear Power, the joint firm to develop the plant.

Welsh ministers called it extremely disappointing but said there was still "live and significant interest".

The German-owned companies blamed the global economic crisis, developments in the nuclear industry in Germany and what they called the "significant ongoing costs" of running the Horizon joint venture for the decision.

Volker Beckers, chief executive of RWE npower said: "It is because of the strength of support for our development work, particularly on the Island of Anglesey, that we continue to believe that nuclear power has an important role to play in the UK's future energy mix.

"We are therefore looking to ensure that work on development, including grid connection, can be taken up quickly by other potential investors."

Horizon had planned up to 6,000 megawatts of new nuclear plants in Britain, which they saw as more friendly to nuclear energy than other countries.

But the parent companies had been indicating recently that they were concerned about possible cost overruns as seen at other nuclear projects in Europe.

Horizon is the company behind plans to build new nuclear power stations at Oldbury and Wylfa.

We had been waiting for an announcement on new nuclear reactors for Wylfa - we were expecting confirmation this month - it didn't come. Instead we have this bombshell.

There's quite a lot of history here - not least the Fukushima disaster in Japan. It's worth remembering the German government fairly quickly decided there would not be any support for a new nuclear build.

Both companies are based in Germany and there are quite a lot of risks a year on from Fukushima - in terms of a market risk, a cost risk, a construction risk, and a political risk.

It's worth remembering there are two nuclear power plants being built in Europe at the moment - one in Finland and in France. Both are behind schedule, and both have run into considerable overspends.

The Welsh government spokesperson said: "The first minister has made it clear that Anglesey remains the best option in the UK for a nuclear development.

"There is live and significant interest in the site, and the first minister has asked for the full support of the UK Government as we work with Horizon to deliver this investment and secure jobs for workers at Wylfa in the future."

Welsh secretary Cheryl Gillan was also disappointed but said Anglesey's 50 years of experience in the nuclear industry gave her confidence the Wylfa site will be attractive to other investors. ‪ ‪

"I have spoken to RWE on the rationale for this commercial decision, and I plan to meet them at the earliest opportunity," she said.

Horizon Nuclear Power had hoped construction of the £8bn project would start towards the end of 2012.

It had been developing options for two to three new reactors next to the existing Magnox station, which had been given permission to operate until 2014.

Wylfa B has been seen as promising an economic lifeline to the people of Anglesey.

According to the proposals, about 5,000 construction jobs would be created while the plant is built, and between 800 and 1,000 people would be employed in the station from 2020.

But groups including People Against Wylfa B (Pawb) have opposed the development, and have stepped up their protests since the disaster in Japan.

In March 2011 Horizon said it needed to "take stock" of its plans following the Japanese earthquake and tsunami.