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Global Nuclear Market Left Open For Russia & China After Japan Inc Exit From Foreign Projects

Global Nuclear Market Left Open For Russia & China After Japan Inc Exit From Foreign Projects
The British and Turkish nuclear newbuild industry would be left open only to Russian and Chinese state-owned companies because the Western [private companies are too weak to complete after the potential exit of Japanese conglomerates from nuclear export projects in Britain and Turkey.
Because of the escalation of cost nearly doubling to around 5 trillion yen ($44 billion), Mitsubishi Heavy Industries is likely to opt out of the Sinop nuclear project in Turkey, according to media reports published in Japan this month.
The media reported last week that a decision of whether to opt out of the 3 trillion yen Horizon nuclear project in Britain was being contemplated by Hitachi because of cost escalation while its UK project was liquidated by Toshiba earlier this year.
According to a report in Reuters quoting sources, the MHI had all but abandoned the Turkish project.
According to the report, the 2013 signed deal between Turkish leader Tayyip Erdogan and Japan’s Shinzo Abe was way too ambitious. Turkey does not have any tradition in nuclear power production and the project in the country was slated to make use of the untested Atmea reactor which had been manufactured by MHI and France’s Areva.
The fate of the project is not at the hands of the Turkish and Japanese governments, said MHI Chief Executive Shunichi Miyanaga earlier this month. The executive added that a feasibility study that had been submitted by MHI is being studied by Turkey.
There is also uncertainty about the two nuclear reactors that were to be built in the UK by Hitachi’s Horizon one of which was to be constructed at Wylfa Newydd, Wales. A final call would be taken next year, Hitachi has said.
Talks with the UK government had been ongoing since June this year, Horizon said, after the British government had announced that it would itself make an investment in the project directly.
“We’ve been in negotiations with the government regarding financing of Wylfa Newydd,” a spokesperson told the media.
With the aim of bringing down its stake in Horizon to below 50 per cent, Hitachi is seeking new investors for the business unit. However earlier a senior Hitachi executive had been quoted in the media as saying that the project can in under no circumstances be profitable under current conditions.
“The political situation makes it impossible for the government to take action now ... but there are limits to how long Hitachi can wait,” the executive  in the media report while talking about the Brexit negotiations that the UK is engaged in with the European Union.
Hitachi hopes that at least one third of the equity portion of the project would be taken up by a group of Japanese investors and Britain. Onethird financing of the project would be done by equity while two thirds would be done through debt, said a media reports quoting information from a company source.
Now since Japanese companies have severely cut down on their export projects, the global nuclear market has been virtually left open to be dominated by Russia’s Rosatom and two reactor builder companies from China.
Westinghouse and France’s Framatome, two of the most prominent of western privately owned nuclear companies had to be restricted after both incurred losses and none have any foreign orders currently.
“Without Horizon, Japan is left without a nuclear project abroad ... this is becoming a Russia/China-dominated industry,” said a consultant who advises one of Japan’s nuclear groups.
Chinese nuclear firms are already active in the UK with the state-owned CGN acting as a co-financer of EDF’s Hinkley Point project. The company also has also secured a deal to build another reactor by itself which would mark the construction of the first Chinese built reactor outside of Asia. 

Christopher J. Mitchell

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