Fears are mounting that Hitachi could pull out of the Wylfa Newydd Nuclear plant because concerns about rising construction costs.

Japanese TV station TV Asahi has reported that Hitachi could withdraw from the 2.9GW £20bn Wylfa Newydd nuclear power plant on Anglesey, as it struggles to secure capital investment.

Report projections of further increases in construction costs have led to speculation that Hitachi, the company behind the project developer Horizon Nuclear Power, could now back out of the project.

Japanese TV station TV Asahi has reported that Hitachi’s board will meet this week to discuss the increasing costs and further action.

Cancelation of Wylfa Newydd would represent a major blow for the nuclear power sector in the UK, after the NuGen plant in Moorside was abandoned in November.

A Horizon Nuclear Power spokesperson said: “Since the [business] secretary of state’s statement to the House [of Commons] in June this year we’ve been in formal negotiations with the UK Government regarding financing of the Wylfa Newydd project in a way that works both for investors and the UK electricity customer. We won’t be commenting on rumours or speculation.”

Hitachi chairman Hiroaki Nakanishi last week said that the company was struggling to find investors to fund one-trillon yen (£7bn) for the project and that the company faced “an extremely severe situation”.

Speaking at the Nuclear Industry Association conference in London, Horizon Nuclear Power director of nuclear operations Gwen Parry-Jones said that the site on Anglesey might be the best site in the UK for a new nuclear build.

“Is it the best UK new nuclear build?” she asked. “There are other great sites too, but we have 600 acres of national policy statement land, with 400 further acres optioned, we also have ideal ground conditions and the elevation is good.”

However, Parry-Jones also said that additional works will be needed to expand the sites existing grid connection for Horizon’s plant.

“[The site has] existing infrastructure with a great grid connection but that will need expanding before our plant, we need additional capacity,” she added.

National Grid has submitted plans for the upgrade, which will include a tunnel under the Menai Strait.

Construction of the Wylfa Newydd plant could start as soon as 2020 and is expected to create approximately 8,500 jobs if the plant still goes ahead.

Contracts for some of the works were awarded in October, including the civils design contract.

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