Hitachi stresses joint responsibility of UK project

12 June 2017

Hitachi has stressed the importance to its UK nuclear business of a "one team" project management structure based on collaboration between three companies. Hitachi, which acquired Horizon Nuclear Power in 2012 as a wholly owned subsidiary, is partnering with US and Japanese engineering firms Bechtel and JGC.

Horizon aims to provide at least 5.4 GWe of new capacity across two sites - Wylfa Newydd, which is on the Isle of Anglesey, and Oldbury-on-Severn, in South Gloucestershire - by deploying Hitachi-GE UK Advanced Boiling Water Reactors (ABWRs). Hitachi plans to make a final investment decision on the project in 2019 and to start operation of the first unit in the first half of the 2020s. Horizon announced in May last year it had appointed a joint venture responsible for construction of the Wylfa Newydd plant. The newly created company, Menter Newydd, is a joint venture of Hitachi Nuclear Energy Europe, Bechtel Management Company and JGC Corporation (UK).

"We will tackle this project along with strong partners," Hitachi Vice President Koji Tanaka said at an investor relations event in Tokyo on 8 June. According to the Nikkei news agency, Tanaka added that should obstacles like construction delays cause losses, all the companies will share responsibility based on a predetermined ratio regardless of who is at fault.

In a presentation at the 8 June event, Hitachi said it aims to "make good progress" with the project and "enhance its business value and minimise risks by building the strongest partnerships". It is creating an environment where 'on budget' and 'on schedule' are prioritised, with the three companies jointly responsible for the project's implementation.

In addition to Hitachi's joint venture with Bechtel and JGC, Horizon announced in April that Exelon Generation and Japan Atomic Power Company had formed a joint venture company - JExel Nuclear - "to leverage Exelon's expertise in operational excellence and safety among international operators using Japanese reactor technologies".

The Japanese and UK governments signed a Memorandum of Cooperation across a full range of civil nuclear activities in December 2016 and both governments have expressed their support for the Horizon project, Hitachi said. The project will need the "provision of revenue stability" under the UK government's Contracts-for-Difference scheme, it added, with "promotion of the operation and maintenance business" to follow once the plant becomes operational.

The fourth and final step of the Generic Design Assessment of the UK ABWR is underway and the process is expected to be completed by the end of this year as planned, Hitachi said. A site licence application was submitted to the Office for Nuclear Regulation in March, while the third and final public consultation on the project is to be completed on 22 June.

According to Nikkei, Hitachi will "curtail its financial risk" in the construction of the two nuclear power plants in the UK "by divesting itself of the local subsidiary that will build and operate them". If Hitachi fails to attract new investors to Horizon before construction starts in 2019, it will be "forced to bear practically all the financial risk of the project" and will "suspend its plans for the ¥2 trillion ($18.1 billion) project", Nikkei said.

Hitachi also said at the 8 June event that the ABWR is "the most advanced reactor anywhere in the world", having a "proven track record of reliable construction and operation". This is proven technology, it said, since four plants are already operational and another two are under construction. Hitachi has participated on all of these ABWRs, it added.

The ABWR design was developed jointly by GE, Hitachi and Toshiba, prior to the merger of GE and Hitachi, and is derived from GE's BWR concept. Four units - Kashiwazaki-Kariwa units 6 and 7, Hamaoka 5 and Shika 2 - have been built and operated commercially in Japan. ABWRs are now offered in slightly different versions by GE-Hitachi, Hitachi-GE and Toshiba. In February last year, the US Nuclear Regulatory Commission issued a combined construction and operating licence to Nuclear Innovation North America for two Toshiba ABWRs at the South Texas Project nuclear power plant in Matagorda County, Texas.

Hitachi also announced on 8 June that it aims to achieve a total of ¥280 billion in nuclear power revenue - ¥210 billion in Japan and ¥70 billion from overseas - in the fiscal year that begins in April 2020. That compares with the target for the current fiscal year that started in April of ¥196 billion and for the next fiscal year of ¥200 billion.

Researched and written
by World Nuclear News

Filed under: New build, Japan, United Kingdom