Kwarteng extends planning deadline for shelved nuclear project

The government has thrown a fresh lifeline to the troubled scheme to build a nuclear power station in north Wales.

Last month, Hitachi announced that it has withdrawn from the project to build the Wylfa Newydd plant on Anglesey.

The Japanese multi-national had already suspended work on the 2.9GW power station in January 2019 after failing to secure the financial backing it wanted from the UK government for the project.

However, on Friday energy minister Kwasi Kwarteng announced in a written statement to the House of Commons that the deadline for a decision on whether to grant the planning permission for the scheme has been extended.

Horizon, the UK nuclear development arm of Hitachi, has submitted a development consent order (DCO) for its power station plans, which is being handled by the Planning Inspectorate. A planning inquiry into the DCO concluded in April last year.

Under the 2008 Planning Act, which governs major pieces of infrastructure like nuclear power stations, the business and energy secretary must make a decision on an application within three months of receiving a planning report from the inspectorate. However, the secretary of state has powers to extend the deadline, which he reset earlier this year to 30 September 2020 for Wylfa Newydd.

Following last month’s announcement that Hitachi was pulling out of the project, Horizon’s chief executive officer Duncan Hawthorne wrote to the Planning Inspectorate requesting a fresh extension until 31 December 2020 in order to ascertain its options for the project.

In his letter, Hawthorne wrote: “Due to the recent change in circumstance, a short extension to the decision deadline would be beneficial to enable Horizon to work constructively with its key stakeholders to ascertain the options for the Wylfa Newydd DCO project and secure its future, recognising the critical role nuclear power has to play in helping tackle the UK’s energy needs, meet climate change targets and level up the economy through green growth and job creation.’

The Financial Times reported in August that Hitachi had held discussions with the government about resurrecting the Wylfa Newydd project if ministers could develop a new model for financing nuclear power stations.

The energy white paper, which ministers have said is due to be published this autumn, is expected to contain the government’s feedback on responses to a consultation last year on the application of the regulated asset base (RAB) model to nuclear projects.

Under the RAB model, which has been used in other infrastructure schemes like the Thames Tideway tunnel, the developer can be paid during the construction phase, cutting the total interest accrued during the project.