Horizon Nuclear Power

Horizon Nuclear Power is a British energy company that was expected to build new nuclear power stations in the United Kingdom. It was established in 2009, with its head office in Gloucester, and is now owned by Hitachi.

Horizon Nuclear Power Limited
Industryelectricity generation
Founded2009
HeadquartersGloucester, UK
Key people
Duncan Hawthorne - CEO
Productselectrical power
OwnerHitachi
Websitehorizonnuclearpower.com

On 17 January 2019, Horizon suspended its UK nuclear development programme.

Early history

The company was established in 2009 as an E.ON UK and RWE npower joint venture. The company announced its intention to install about 6,000 MWe of new nuclear capacity adjacent to the existing Wylfa and Oldbury nuclear power stations.[1][2] Horizon initially evaluated building either Areva 1,650 MWe EPR reactors or Westinghouse 1,100 MWe AP1000 reactors between 2020 and 2024.[3][4]

In March 2012 E.ON and RWE npower placed Horizon up for sale as a going concern.[5][6][7] One bidder was a joint venture of China Guangdong Nuclear Power Group and the China National Nuclear Corporation.[8]

However, on 29 October 2012, it was announced that Hitachi would buy Horizon for £696 million,[9] and the sale was completed on 26 November 2012.[10]

Hitachi ownership

Hitachi intended to build two to three 1,350 MWe Advanced Boiling Water Reactors (ABWR) on each site, but first required a Generic Design Assessment (GDA) for the ABWR by the Office for Nuclear Regulation.[11][12][13] The assessment began in April 2013, with an agreement that the costs of assessment will be covered by Hitachi-GE.[14] In August 2014, the proposed reactor type reached the third stage, out of four, in the GDA process.[15]

In 2013, Horizon planned initial site work at Wylfa to begin in 2015, with building work starting in 2018 and generation starting in the mid-2020s.[16] However later Horizon delayed the start of site work until after the GDA is completed.[17]

In January 2016, Hitachi announced a new UK company, Hitachi Nuclear Energy Europe, to lead a proposed joint venture with Bechtel and JGC Corporation, to cover the engineering, procurement and construction of Horizon's nuclear plants in the UK. Horizon Nuclear Power will continue to work on obtaining regulatory consents and making commercial arrangements.[18] However, later in the month Hiroaki Nakanishi, chairman and chief executive of Hitachi, expressed serious concerns to the Foreign Secretary Philip Hammond over financing the scheme, following EDF's difficulty in financing Hinkley Point C. Hitachi is currently negotiating with the Department of Energy and Climate Change (DECC) on electricity price guarantees, called Contracts for Difference (CfD).[19] The first project at Wylfa will be financed externally, with Hitachi only taking a minority stake.[20]

In May 2016, Duncan Hawthorne, previously CEO of Bruce Power in Canada, was appointed CEO of Horizon.[21] In February 2017 Horizon contracted U.S. Exelon to provide expert staff to assist in developing Horizon's nuclear operating model.[22]

The ABWR GDA process completed successfully in December 2017.[23]

As of 2017, Horizon planned to build two ABWRs at each site, subject to finance and contract agreement.[24] Horizon believed a consensus now of government and industry is that the Contract for Difference financing model used for Hinkley Point C nuclear power station, involving fully private sector financing, will not used for subsequent nuclear plants, and discussions with government are under way about alternative financing models.[25] Hawthorne, Horizon CEO, stated "We are an insurance policy for a long-term stable supply and there is a price for that certainty".[26]

In December 2018, Hitachi's chairman stated they were struggling to find investors for the Wylfa plant. Later TV Asahi in Japan reported that the Wylfa scheme may be scrapped, resulting in an increase in the value of Hitachi’s shares.[27][28]

On 17 January 2019, Horizon announced that "it will suspend its UK nuclear development programme, following a decision taken by its parent company Hitachi".[29][30] The UK government had been willing to take a one-third equity stake in the project, to consider providing all the required debt financing, and to provide a Contract for Difference for the electricity generated at up to £75/MWh for 35 years. Greg Clark, minister for Business, Energy and Industrial Strategy, stated this was a "generous package of potential support that going beyond what any government had been willing to consider in the past". However this did not provide an adequate "economic rationality as a private enterprise" for Hitachi to proceed.[31][32]

Hitachi had spent nearly £2 billion on Horizon since 2012, and the Wylfa ABWR development had been expected to cost about £15 billion.[33]

Following the suspension, Horizon made most of its 380 staff redundant, retaining just a few site maintenance staff and those involved in governmental discussions about possible future funding of the development.[33]

In April 2020 a director of Horizon stated that the future of next two nuclear builds, Wylfa and EDF's Sizewell C, depended on the government accepting the Regulated Asset Base (RAB) financial assistance model rather than the existing Contract for Difference support mechanism, which would allow developers to need less upfront private finance as some finance would be backed by end consumer billing.[34]

In June 2020 The Sunday Times reported that the U.S. government had warned Hitachi not to sell Horizon to Chinese companies for security reasons. Horizon responded there were no such plans, and stated "We don't comment on speculation. Our focus remains on securing the conditions necessary to restart this crucial project, which would bring transformative economic benefits to the region and play a huge role in helping deliver the UK's climate change commitments."[35][36]

See also
  • Economics of new nuclear power plants

References
  1. "FAQs: OLDBURY". Horizon Nuclear Power. Retrieved 11 November 2010.
  2. "FAQs: WYLFA". Horizon Nuclear Power. Retrieved 11 November 2010.
  3. Murray, James (30 April 2009). "RWE/E.ON and EDF win nuclear auction". BusinessGreen. Retrieved 11 November 2010.
  4. Pfeifer, Sylvia; Blair, David (12 August 2011). "Doubts raised over UK energy investments". Financial Times. Retrieved 28 September 2011.
  5. "RWE and E.On halt UK nuclear plans at Wylfa and Oldbury". BBC News. 29 March 2012. Retrieved 29 March 2012.
  6. Peston, Robert (29 March 2012). "Is the UK's nuclear future in jeopardy?". BBC News. Retrieved 29 March 2012.
  7. Gosden, Emily (21 June 2012). "Chinese companies bid to build new UK nuclear power plants". Daily Telegraph. Retrieved 19 June 2012.
  8. Li Xiang (3 November 2012). "Nuke companies pursue future power abroad". China Daily. Retrieved 2 October 2013.
  9. E.On and RWE (30 October 2012). "RWE and E.ON announce sale of Horizon Nuclear Power to Hitachi Ltd" (PDF) (Press release).
  10. "Wylfa B: Hitachi takes over Horizon nuclear project". BBC. 26 November 2012. Retrieved 8 December 2012.
  11. Chazan, Guy; Pickard, Jim (29 October 2012). "Hitachi agrees UK nuclear purchase". Financial Times. Retrieved 30 October 2012.
  12. "Hitachi buys UK nuclear project from E.On and RWE". BBC News. 30 October 2012. Retrieved 30 October 2012.
  13. "ABWR set for UK design assessment". Nuclear Engineering International. 16 January 2013. Retrieved 26 January 2013.
  14. "UK starts ABWR design assessment". World Nuclear News. 10 April 2013. Retrieved 22 April 2013.
  15. "Hitachi-GE UK ABWR progresses to GDA Step 3". Office for Nuclear Regulation. 28 August 2014. Retrieved 8 April 2015.
  16. Chris Dearden (21 October 2013). "Wylfa B nuclear power station: Housing concerns for workers". BBC. Retrieved 22 October 2013.
  17. "Wylfa Newydd - FAQs". Horizon Nuclear Power. Retrieved 16 February 2017.
  18. "Hitachi enhances UK presence ahead of ABWR deployment". World Nuclear News. 19 January 2016. Retrieved 31 January 2016.
  19. Szu Ping Chan (30 January 2016). "Hinkley Point nuclear fiasco spooks Hitachi boss". Daily Telegraph. Retrieved 31 January 2016.
  20. Emily Gosden (14 February 2016). "UK new nuclear plan will fail without private investors, says Horizon chief". Daily Telegraph. Retrieved 17 September 2016.
  21. "Horizon CEO outlines fresh challenge for nuclear". World Nuclear News. 29 June 2016. Retrieved 5 July 2016.
  22. "Horizon forms operating partnership with Exelon". World Nuclear News. 15 February 2017. Retrieved 16 February 2017.
  23. "Hitachi-GE ABWR design cleared for use in UK". World Nuclear News. 14 December 2017. Retrieved 17 December 2017.
  24. "UK ABWR executives chart path ahead for Horizon". World Nuclear News. 15 December 2017. Retrieved 17 December 2017.
  25. Ward, Andrew (19 December 2017). "Britain's next nuclear plant eyes new funding models". Financial Times. Retrieved 19 December 2017.
  26. "Horizon CEO says Hinkley model is a one-off". World Nuclear News. 20 December 2017. Retrieved 8 February 2018.
  27. Vaughan, Adam (10 December 2018). "UK's nuclear plans in doubt after report Welsh plant may be axed". The Guardian. Retrieved 10 December 2018.
  28. "Hitachi may freeze British nuclear project due to swelling costs". The Japan Times. 16 December 2018. Retrieved 17 December 2018.
  29. "Horizon suspends UK nuclear new build activities" (Press release). Hitachi. 17 January 2019. Retrieved 18 January 2019.
  30. Vaughan, Adam (17 January 2019). "Hitachi scraps £16bn nuclear power station in Wales". The Guardian. Retrieved 18 January 2019.
  31. "UK unveils financial terms it offered Hitachi". World Nuclear News. 17 January 2019. Retrieved 18 January 2019.
  32. Anjani Trivedi; David Fickling (19 January 2019). "Hitachi Can't Cut Its Nuclear Bonds Soon Enough". Bloomberg. Retrieved 25 January 2019.
  33. "The next steps for Horizon". World Nuclear News. 18 January 2019. Retrieved 25 January 2019.
  34. Rowland, Miles (7 April 2020). "Nuclear power: Wylfa and Sizewell C 'fate is aligned'". Construction News. Retrieved 30 April 2020.
  35. "U.S. warns Hitachi not to sell U.K. nuclear project to China". The Japan Times. 30 June 2020. Retrieved 30 June 2020.
  36. "Wylfa nuclear project: Donald Trump plea over site sale dismissed". BBC News. 28 June 2020. Retrieved 30 June 2020.
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