Metro-North stands by century-old system as it replaces its power lines

By Knight Ridder Tribune


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It takes a lot of juice to power the trains. During the morning commute alone, the Connecticut side of Metro-North Railroad's New Haven Line draws about 30 megawatts of power, making the railroad the state's second biggest electricity user behind Foxwoods Resort Casino.

Some of that power is still being drawn from wiring and equipment erected 100 years ago. Metro-North is working to change that.

Since 1993, the railroad and the state Department of Transportation have been incrementally replacing the overhead catenary wires used by New Haven Line trains. These wires were installed as part of its state-of-the-art high-voltage alternating-current power system that went online between Woodlawn, N.Y., and Stamford in the summer and fall of 1907.

The New Haven Line was considered a pioneer for using this kind of electrical power, which promised and delivered higher speeds and more efficiency than its steam-powered predecessors, and the lower-voltage, direct current, third-rail power adopted by New York Central's Hudson and Harlem lines.

But the strain on the New Haven Line's landmark system has never been greater.

Ridership is at its highest point since company mismanagement and the rise of the state's highway system nearly sunk the railroad 50 years ago.

The New Haven Line's wires and tracks are also shared by the regional rail service Amtrak and its high-speed Acela train, which travels as fast as 120 mph on sections between Greenwich and New York City.

"These decisions made over 100 years ago are still with us today," said Kurt Schlichting, a Fairfield University professor and author of "Grand Central Terminal."

Parts of the New Haven Line's electrification system have changed dramatically since 1907.

The coal-powered plant in the Cos Cob section of Greenwich, designated a National Historic Engineering Landmark because of its breakthrough in engineering achievements, closed in 1986 because it could no longer produce enough electricity to power the line.

It was demolished 15 years later.

The overhead wires on the Danbury branch between Danbury and South Norwalk were removed in the 1960s for political and financial reasons, creating an antiquated commuting experience still experienced today for passengers on the vital branch line. As the old overhead wires on New Haven Line's main line start disappearing and new ones appear, Metro-North is still looking for ways to refine and improve the vision of Westinghouse Electric Company's George Westinghouse, who 100 years ago fought vociferously for the current electrical system despite loud objections from rival railroads.

About 20 years ago, Robert Walker, director of operating capital projects and a former power department chief for Metro-North Railroad, was investigating ways to improve the overhead catenary wire on the New Haven Line.

The wires, primarily installed from 1907 to 1914, were prone to snapping in extreme temperatures.

When the weather was too cold, the wires would become rigid. When the weather was hot, they would sag and could get caught on the rail car's pantograph, the arm that draws power from the catenary. The answer was a new kind of catenary called "constant tension" being used on British railroads.

Constant tension used weights and pulleys attached to the wires and poles to help compensate for sagging and restriction.

"It was state-of-the-art," Walker said. "The tension would remain the same despite the weather with weights and pulleys. That way, the system is stable."

In the early 1990s, Metro-North Railroad started removing the triangular catenary - the original 1907 wires that were enjoined by three-eighths of an inch steel gas pipes, forming a triangle.

By December 1993, the new constant tension wiring had been installed between Pelham, N.Y., and the Connecticut state line. By 2002, Connecticut's DOT started removing its own catenary.

The $300 million project started with the removal of triangular catenary between Greenwich and Stamford, which was finished in May 2005. DOT then moved to a section between Stratford and New Haven, which housed catenary from about 1914. That project was completed in February.

The remaining catenary between Stamford and Stratford is under construction and should be completed by 2014. Besides the replacement of the New Haven Line's 30-year-old rail car fleet, the catenary program is considered to be a key project that could lead to improved and more frequent service.

When asked about improving train service during a meeting of the Connecticut Rail Commuter Council, George Walker, Metro-North's vice president of operations, said, "I've got the rail, I just need the catenary."

The results of the catenary replacement project are small but noticeable.

On-time performance on the New Haven Line's inner portion, between Stamford and Grand Central Terminal, has sat at 97.7 percent to 97.9 percent since the new wires went up, compared with 96.9 percent to 97.4 percent in the years preceding the new catenary.

On the line's outer portion, between Stamford and New Haven, where there is less new catenary, the on-time performance has remained at 95 percent to 96 percent the past seven years, according to Metro-North.

The results are not reflected by on-time performance alone, Walker said.

In areas where there is new catenary, the railroad uses a three-year inspection cycle, compared with an annual inspection in areas with the old wires, he said. The new wire also enables the railroad to cut back on its weather-related speed restrictions.

With the old wires, whenever the weather was hotter than 90 degrees or below 25 degrees, the trains would run as much as 30 mph slower.

Catastrophic incidents can still result after wires are torn down.

Earlier this year, about 80 trains and 59,000 commuters were delayed when a pair of rail cars tore down wires outside the Cos Cob station.

The incident took nearly two hours to rectify. Even that is an improvement, Walker said.

"When we do get an incident that tears the new wire down, we can put it back up at least 50 percent quicker because the new system has less components that are easily fixed or replaced in less time by our crews," he said.

As the DOT and Metro-North continue to upgrade areas that have electrical power, they also have to address parts of the railroad that have been de-electrified. During the New Haven Line's electrical age, no rail line has regressed as much as the Danbury branch.

It was first electrified in 1925, but by the 1950s, railroad President Patrick McGinnis decided to sell the wires for revenue.

For service, the railroa used newly purchased FL9 locomotives, which were diesel-powered and equipped to run on the third-rail portion of the railroad between Pelham and Grand Central. The Danbury branch has never been the same.

The diesel engines take longer to accelerate and affect the line's on-time performance. This past year, the 6:52 a.m. train out of Danbury was cited as the most frequently late train on the New Haven Line, arriving on time 88 percent of the time. The line also has suffered because the electric cab cars used on New Haven mainline and the New Canaan branch are not compatible with the unelectrified area.

So if there are equipment problems on the Danbury branch, it can't receive help from the other lines. Rodney Chabot, a New Canaan resident who grew up riding the Danbury branch when it was electrified, is still outraged by the decision to remove the catenary.

"It was working beautiful," said Chabot, a former chairman of the Connecticut Rail Commuter Council. "The diesels have been a failure."

Chabot and other rail historians are convinced that in addition to the funds received for selling the wires, the catenary was removed to justify the purchase of the FL9s. DOT has had plans to improve the Danbury branch for years, but little, outside of studies, has occurred.

The first phase of the most recent study, which was completed last year, determined the line could be improved if it was signalized and electrified gain.

Many of the improvements would cost about $200 million, though ridership would nearly double from its current 1,000 riders a day.

Rail historians and engineers have long praised Westinghouse's vision. But even 100 years later, New Haven Line operators have combated complications because of the decisions of their predecessors.

During the winter of 2004, so many of the New Haven Line's antiquated rail cars were out of commission for repairs that the period was dubbed the "winter of woe."

While Metro-North's other lines, Hudson and Harlem, which are owned by New York, were enjoying new rail cars that were running without as many problems, that equipment could never be transferred to the New Haven Line because it doesn't run on an alternating current system using overhead wires.

Service delays involving the third rail are often less severe, Walker said.

"When we have incidents (with the catenary), it often affects adjacent tracks," shutting down more available tracks for service, he said.

"With third rail, it's usually on track and it's an independent problem, so it doesn't affect service as much."

These issues have resulted in cries to extend the third rail that exists south of Pelham all the way to New Haven.

These requests have generally been rejected because of expense, and because Amtrak, which runs along the entire Northeast corridor, would still need the catenary.

Ordering new rail cars also has been a complicated process because they require compatibility with overhead wires and the third rail into Grand Central.

"The New Haven Lines cars were the first ones to require that (dual power) and have maintained their reputation as being the most complicated commuter cars in the world," Walker said.

But the railroad still stands by Westinghouse's vision.

"The decisions that were made were the right decisions," Walker said.

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Ontario Teachers' Plan Acquires Brazilian Electricity Transmission Firm Evoltz

Ontario Teachers' Evoltz Acquisition expands electricity transmission in Brazil, adding seven grid lines across ten states, aligning infrastructure strategy with inflation-linked cash flows, renewable energy integration, Latin America and net-zero objectives pending regulatory approvals.

 

Key Points

A 100% purchase of Brazil's Evoltz, adding seven grid lines and delivering stable, inflation-linked cash flows.

✅ 100% stake in Evoltz with seven transmission lines

✅ Aligns with net-zero and renewable energy strategy

✅ Inflation-linked, core infrastructure cash flows in Brazil

 

The Ontario Teachers’ Pension Plan has acquired Evoltz Participações, an electricity transmission firm in Brazil, from US asset manager TPG. 

The retirement system took a 100% stake in the energy firm, Ontario Teachers’ said Monday. The acquisition has netted the pension fund seven electricity transmission lines that service consumers and businesses across 10 states in Brazil, amid dynamics similar to electricity rate reductions for businesses seen in Ontario. The firm was founded by TPG just three years ago. 

“Our strategy focuses on allocating significant capital to high-quality core infrastructure assets with lower risks and stable inflation-linked cash flows,” Dale Burgess, senior managing director of infrastructure and natural resources at Ontario Teachers, said in a statement. “Electricity transmission businesses are particularly attractive given their importance in facilitating a transition to a low-carbon economy.” 

The pension fund has invested in other electricity distribution companies recently. In March, Ontario Teachers’ took a 40% stake in Finland’s Caruna, and agreed to acquire a 25% stake in SSEN Transmission in the UK grid. For more than a decade, it has maintained a 50% stake in Chile-based transmission firm Saesa. 

The investment into Evoltz demonstrates Ontario Teachers’ growing portfolio in Brazil and Latin America, while activity in Ontario such as the Peterborough Distribution sale reflects ongoing utility consolidation. In 2016, the firm, with the Canada Pension Plan Investment Board (CPPIB), invested in toll roads in Mexico. They took a 49% stake with Latin American infrastructure group IDEAL. 

Evoltz, which delivers renewable energy, will also help decarbonize the pension fund’s portfolio. In January, the fund pledged to reach net-zero carbon emissions by 2050. Last year, Ontario Teachers’ issued its first green bond offering. The $890 million 10-year bond will help the retirement system fund sustainable investments aligned with policy measures like Ontario's subsidized hydro plan during COVID-19. 

However, Ontario Teachers’ has also received criticism for its investment into parts of Abu Dhabi’s gas pipeline network, and investor concerns about Hydro One highlight sector uncertainties. Last summer, it joined other institutional investors in investing $10.1 billion for a 49% stake. 

As of December, Ontario Teachers’ reached a portfolio with C$221.2 billion (US$182.5 billion) in assets. Since 1990, the fund has maintained a 9.6% annualized return. Last year, it missed its benchmark with an 8.6% return, with examples such as Hydro One shares fall after shake-up underscoring market volatility.

The pension fund expects the deal will close later this fall, pending closing conditions and regulatory approvals, including decisions such as the OEB combined T&D rates ruling that shape utility economics. 

 

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Solar + Wind = 10% of US Electricity Generation in 1st Half of 2018

US Electricity Generation H1 2018 saw wind and solar gains but hydro declines, as natural gas led the grid mix and coal fell; renewables' share, GWh, emissions, and capacity additions shaped the power sector.

 

Key Points

It is the H1 2018 US power mix, where natural gas led, coal declined, and wind and solar grew while hydro fell.

✅ Natural gas reached 32% of generation, highest share

✅ Coal fell; renewables roughly tied nuclear at ~20%

✅ Wind and solar up; hydro output down vs 2017

 

To complement our revival of US electricity capacity reports, here’s a revival of our reports on US electricity generation.

As with the fresh new capacity report, things are not looking too bright when it comes to electricity generation. There’s still a lot of grey — in the bar charts below, in the skies near fossil fuel power plants, and in the human and planetary outlook based on how slowly we are cutting fossil fuel electricity generation.

As you can see in the charts above, wind and solar energy generation increased notably from the first half of 2017 to the first half of 2018, and the EIA expected larger summer solar and wind generation in subsequent months, reinforcing that momentum.

A large positive when it comes to the environment and human health is that coal generation dropped a great deal year over year — by even more than renewables increased, though the EIA later noted an increase in coal-fired generation in a subsequent year, complicating the trend. However, on the down side, natural gas soared as it became the #1 source of electricity generation in the United States (32% of US electricity). Furthermore, coal was still solidly in the #2 position (27% of US electricity). Renewables and nuclear were essentially in a tie at 19.8% of generation, with renewables just a tad above nuclear.

Actually, combined with an increase in nuclear power generation, natural gas electricity production increased so much that the renewable energy share of electricity generation actually dropped in the first half of 2018 versus the first half of 2017, even amid declining electricity use in some periods. It was 19.8% this year and 20% last year.

Again, solar and wind saw a significant growth in its market share, from 9% to 9.9%, but hydro brought the whole category down due to a decrease from 9% to 8%.

The visuals above are probably the best way to examine it all. The H1 2018 chart was still dominated by fossil fuels, which together accounted for approximately 60% of electricity generation, even though by 2021 non-fossil sources supplied about 40% of U.S. electricity, highlighting the longer-term shift. In H1 2017, the figure was 59.7%. Furthermore, if you switch to the “Change H1 2018 vs H1 2017 (GWh)” chart, you can watch a giant grey bar representing natural gas take over the top of the chart. It almost looks like it’s part of the border of the chart. The biggest glimmer of positivity in that chart is seeing the decline in coal at the bottom.

What will the second half of the year bring? Well, the gigantic US electricity generation market shifts slowly, even as monthly figures can swing, as January generation jumped 9.3% year over year according to the EIA, reminding us about volatility. There is so much base capacity, and power plants last so long, that it takes a special kind of magic to create a rapid transition to renewable energy. As you know from reading this quarter’s US renewable energy capacity report, only 43% of new US power capacity in the first half of the year was from renewables. The majority of it was from natural gas. Along with other portions of the calculation, that means that electricity generation from natural gas is likely to increase more than electricity generation from renewables.

Jump into the numbers below and let us know if you have any more thoughts.


 

 

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Group of premiers band together to develop nuclear reactor technology

Small Modular Reactors in Canada are advancing through provincial collaboration, offering nuclear energy, clean power and carbon reductions for grids, remote communities, and mines, with factory-built modules, regulatory roadmaps, and pre-licensing by the nuclear regulator.

 

Key Points

Compact, factory-built nuclear units for clean power, cutting carbon for grids, remote communities, and industry.

✅ Provinces: Ontario, Saskatchewan, New Brunswick collaborate

✅ Targets coal replacement, carbon cuts, clean baseload power

✅ Modular, factory-made units; 5-10 year deployment horizon

 

The premiers of Ontario, Saskatchewan and New Brunswick have committed to collaborate on developing nuclear reactor technology in Canada. 

Doug Ford, Scott Moe and Blaine Higgs made the announcement and signed a memorandum of understanding on Sunday in advance of a meeting of all the premiers. 

They will be working on the research, development and building of small modular reactors as a way to help their individual provinces reduce carbon emissions and move away from non-renewable energy sources like coal. 

Small modular reactors are easy to construct, are safer than large reactors and are regarded as cleaner energy than coal, the premiers say. They can be small enough to fit in a school gym. 

SMRs are actually not very close to entering operation in Canada, though Ontario broke ground on its first SMR at Darlington recently, signaling early progress. Natural Resources Canada released an "SMR roadmap" last year, with a series of recommendations about regulation readiness and waste management for SMRs.

In Canada, about a dozen companies are currently in pre-licensing with the Canadian Nuclear Safety Commission, which is reviewing their designs.

"Canadians working together, like we are here today, from coast to coast, can play an even larger role in addressing climate change in Canada and around the world," Moe said.  

Canada's Paris targets are to lower total emissions 30 per cent below 2005 levels by 2030, and nuclear's role in climate goals has been emphasized by the federal minister in recent remarks. Moe says the reactors would help Saskatchewan reach a 70 per cent reduction by that year.

The provinces' three energy ministries will meet in the new year to discuss how to move forward and by the fall a fully-fledged strategy for the reactors is expected to be ready.

However, don't expect to see them popping up in a nearby field anytime soon. It's estimated it will take five to 10 years before they're built. 

Ford lauds economic possibilities
The provincial leaders said it could be an opportunity for economic growth, estimating the Canadian market for this energy at $10 billion and the global market at $150 billion.

Ford called it an "opportunity for Canada to be a true leader." At a time when Ottawa and the provinces are at odds, Higgs said it's the perfect time to show unity. 

"It's showing how provinces come together on issues of the future." 

P.E.I. premier predicts unity at Toronto premiers' meeting
No other premiers have signed on to the deal at this point, but Ford said all are welcome and "the more, the merrier."

But developing new energy technologies is a daunting task. Higgs admitted the project will need national support of some kind, though he didn't specify what. The agreement signed by the premiers is also not binding. 

About 8.6 per cent of Canada's electricity comes from coal-fired generation. In New Brunswick that figure is much higher — 15.8 per cent — and New Brunswick's small-nuclear debate has intensified as New Brunswick Premier Blaine Higgs has said he worries about his province's energy producers being hit by the federal carbon tax.

Ontario has no coal-fired power plants, and OPG's SMR commitment aligns with its clean electricity strategy today. In Saskatchewan, burning coal generates 46.6 per cent of the province's electricity.

How would it work?
The federal government describes small modular reactors (SMRs) as the "next wave of innovation" in nuclear energy technology, and collaborations like the OPG and TVA partnership are advancing development efforts, and an "important technology opportunity for Canada."

Traditional nuclear reactors used in Canada typically generate about 800 megawatts of electricity, and Ontario is exploring new large-scale nuclear plants alongside SMRs, or enough to power about 600,000 homes at once (assuming that 1 megawatt can power about 750 homes).

The International Atomic Energy Agency (IAEA), the UN organization for nuclear co-operation, considers a nuclear reactor to be "small" if it generates under 300 megawatts.

Designs for small reactors ranging from just 3 megawatts to 300 megawatts have been submitted to Canada's nuclear regulator, the Canadian Nuclear Safety Commission, for review as part of a pre-licensing process, while plans for four SMRs at Darlington outline a potential build-out pathway that regulators will assess.

Ford rallying premiers to call for large increase in federal health transfers
Such reactors are considered "modular" because they're designed to work either independently or as modules in a bigger complex (as is already the case with traditional, larger reactors at most Canadian nuclear power plants). A power plant could be expanded incrementally by adding additional modules.

Modules are generally designed to be small enough to make in a factory and be transported easily — for example, via a standard shipping container.

In Canada, there are three main areas where SMRs could be used:

Traditional, on-grid power generation, especially in provinces looking for zero-emissions replacements for CO2-emitting coal plants.
Remote communities that currently rely on polluting diesel generation.
Resource extraction sites, such as mining and oil and gas.
 

 

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Brazil government considers emergency Coronavirus loans for power sector

Brazil Energy Emergency Loan Package aims to bolster utilities via BNDES as coronavirus curbs electricity demand. Aneel and the Mines and Energy Ministry weigh measures while Eletrobras privatization and auctions face delays.

 

Key Points

An emergency plan supporting Brazilian utilities via BNDES and banks during coronavirus demand slumps and payment risks.

✅ Modeled on 2014-2015 sector loans via BNDES and private banks

✅ Addresses cash flow from lower demand and bill nonpayment

✅ Auctions and Eletrobras privatization delayed amid outbreak

 

Brazil’s government is considering an emergency loan package for energy distributors struggling with lower energy use and facing lost revenues because of the coronavirus outbreak, echoing strains seen elsewhere such as Germany's utility troubles during the energy crisis, an industry group told Reuters.

Marcos Madureira, president of Brazilian energy distributors association Abradee, said the package being negotiated by companies and the government could involve loans from state development bank BNDES or a pool of banks, but that the value of the loans and other details was not yet settled.

Also, Brazil’s Mines and Energy Ministry is indefinitely postponing projects to auction off energy transmission and generation assets planned for this year because of the coronavirus, even as the need for electricity during COVID-19 remained critical, it said in the Official Gazette.

The coronavirus outbreak will also delay the privatization of state-owned utility Eletrobras, its chief executive officer said on Monday.

The potential loan package under discussion would resemble a similar measure in 2014 and 2015 that offered about 22 billion reais ($4.2 billion) in loans to the sector as Brazil was entering its deepest recession on record, and drawing comparisons to a proposed Texas market bailout after a winter storm, Madureira said.

Public and private banks including BNDES, Caixa Economica Federal, Itau Unibanco and Banco Bradesco participated in those loans.

Three sources involved in the discussions said on condition of anonymity that the Mines and Energy Ministry and energy regulator Aneel were considering the matter.

Aneel declined to comment. The Mines and Energy Ministry and BNDES did not immediately respond to requests for comment.

Energy distributors worry that reduced electricity demand during COVID-19 could result in deep revenue losses.

The coronavirus has led to widespread lockdowns of non-essential businesses in Brazil, while citizens are being told to stay home. That is causing lost income for many hourly and informal workers in Brazil, who could be unable to pay their electricity bills, raising risks of pandemic power shut-offs for vulnerable households.

The government sees a loan package as a way to stave off a potential chain of defaults in the sector, a move discussed alongside measures such as a Brazil tax strategy on energy prices, one of the sources said.

On a conference call with investors about the company’s latest earnings, Eletrobras CEO Wilson Ferreira Jr. said privatization would be delayed, without giving any more details on the projected time scale.

The largest investors in Brazil’s energy distribution sector include Italy’s Enel, Spain’s Iberdrola via its subsidiary Neoenergia and China’s State Grid via CPFL Energia, with Chinese interest also evidenced by CTG's bid for EDP, as well as local players Energisa e Equatorial Energia. 

 

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Rio Tinto seeking solutions that transform heat from underground mines into electricity

Rio Tinto waste heat-to-electricity initiative captures underground mining thermal energy at Resolution Copper, Arizona, converting it to renewable power for cooling systems and microgrids, advancing decarbonization, energy efficiency, and the miner's 2050 carbon-neutral goal.

 

Key Points

A program converting underground thermal energy into on-site electricity to cut emissions and support mine cooling.

✅ Captures low-grade heat from rock and geothermal water.

✅ Generates electricity for ventilation, refrigeration, microgrids.

✅ Scalable, safe, and grid- or storage-ready for peak demand.

 

The world’s second-largest miner, Rio Tinto announced that it is accepting proposals for solutions that transform waste heat into electricity for reuse from its underground operations.

In a press release, the company said this initiative is aimed at drastically reducing greenhouse gas emissions, even as energy-intensive projects like bitcoin mining operations expand, so that it can achieve its goal of becoming carbon neutral by 2050.

Initially, the project would be implemented at the Resolution copper mine in Arizona, which Rio owns together with BHP (ASX, LON: BHP). At this site, massive electrically-driven refrigeration and ventilation systems, aligned with broader electrified mining practices, are in charge of cooling the work environment because of the latent heat from the underground rock and groundwater. 

THE INITIATIVE IS AIMED AT REDUCING GREENHOUSE GAS EMISSIONS SO THAT RIO CAN ACHIEVE ITS GOAL OF BECOMING CARBON NEUTRAL BY 2050

“When operating, the Resolution copper mine will be a deep underground block cave mine some 7,000 feet (~2 kilometres) deep, with ambient air temperatures ranging between 168°F to 180°F (76°C to 82°C), conditions that, during heat waves, when bitcoin mining power demand can strain local grids, further heighten cooling needs, and underground water at approximately 194°F (90°C),” the media brief states.

“Rio Tinto is seeking solutions to capture and reuse the heat from underground, contributing towards powering the equipment needed to cool the operations. The solution to capture and convert this thermal energy into electrical energy, such as emerging thin-film thermoelectrics, should be safe, environmentally friendly and cost-effective.”

The miner also said that, besides capturing heat for reuse, the solution should generate electrical energy from low range temperatures below the virgin rock temperature and/or from the high thermal water coming from the underground rock, similar to using transformer waste heat for heating in the power sector. 

At the same time, the solution should be scalable and easily transported through the many miles of underground tunnels that will be built to ventilate, extract and move copper ore to the surface.

Rio requires proposals to offer the possibility of distributing the electrical energy generated back into the electrical grid from the mining operation or stored and used at a later stage when energy is required during peak use periods, especially as jurisdictions aim to use more electricity for heat in colder seasons. 

 

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Hitachi freezes British nuclear project, books $2.8bn hit

Hitachi UK Nuclear Project Freeze reflects Horizon Nuclear Power's suspended Anglesey plant amid Brexit uncertainty, investor funding gaps, rising safety regulation costs, and a 300 billion yen write-down, impacting Britain's low-carbon electricity plans.

 

Key Points

Hitachi halted Horizon's Anglesey nuclear plant over funding and Brexit risks, recording a 300 billion yen write-down.

✅ 3 trillion yen UK nuclear project funding stalled

✅ 300 billion yen impairment wipes Horizon asset value

✅ Brexit, safety rules raised costs and investor risk

 

Japan’s Hitachi Ltd said on Thursday it has decided to freeze a 3 trillion yen ($28 billion) British nuclear power project and will consequently book a write down of 300 billion yen.

The suspension comes as Hitachi’s Horizon Nuclear Power failed to find private investors for its plans to build a plant in Anglesey, Wales, where local economic concerns have been raised, which promised to provide about 6 percent of Britain’s electricity.

“We’ve made the decision to freeze the project from the economic standpoint as a private company,” Hitachi said in a statement.

Hitachi had called on the British government to boost financial support for the project to appease investor anxiety, but turmoil over the country’s impending exit from the European Union limited the government’s capacity to compile plans, people close to the matter previously said.

Hitachi had called on the British government to boost financial support for the project to appease investor anxiety, but turmoil over the country’s impending exit from the European Union and setbacks at Hinkley Point C limited the government’s capacity to compile plans, people close to the matter previously said.

Hitachi had banked on a group of Japanese investors and the British government each taking a one-third stake in the equity portion of the project, the people said. The project would be financed one-third by equity and rest by debt.

The nuclear writedown wipes off the Horizon unit’s asset value, which stood at 296 billion yen as of September-end.

Hitachi stopped short of scrapping the northern Wales project. The company will continue to discuss with the British government on nuclear power, it said.

However, industry sources said hurdles to proceed with the project are high considering tighter safety regulations since a meltdown at Japan’s Fukushima nuclear power plant in 2011 drove up costs, even as Europe’s nuclear decline strains energy planning.

Analysts and investors viewed the suspension as an effective withdrawal and saw the decision as a positive step that has removed uncertainties for the Japanese conglomerate.

Hitachi bought Horizon in 2012 for 696 million pounds ($1.12 billion), fromE.ON and RWE as the German utilities decided to sell their joint venture following Germany’s nuclear exit after the Fukushima accident.

Hitachi’s latest decision further dims Japan’s export prospects, even as some peers pursue UK offshore wind investments to diversify.

Toshiba Corp last year scrapped its British NuGen project after its US reactor unit Westinghouse went bankrupt, while Westinghouse in China reported no major impact, and it failed to sell NuGen to South Korea’s KEPCO.

Mitsubishi Heavy Industries Ltd has effectively abandoned its Sinop nuclear project in Turkey, a person involved in the project previously told Reuters, as cost estimates had nearly doubled to around 5 trillion yen.

 

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