The government is exploring building a major nuclear power station at Wylfa, similar in scale to Hinkley Point C in Somerset and Sizewell C in Suffolk.
It is opening talks with global energy firms to explore building the new power plant.
Wylfa, on the North Wales coast, is deemed to be ideally-suited to host a nuclear plant, given its proximity to cooling water and nuclear heritage.
Secretary of state for energy security and net zero Claire Coutinho said: “We are powering ahead with the biggest expansion of nuclear energy in 70 years. Anglesey has a proud nuclear history and it is only right that, once again, it can play a central role in boosting the UK’s energy security.”
She added: “Wylfa would not only bring clean, reliable power to millions of homes – it could create thousands of well-paid jobs and bring investment to the local area.”
Meanwhile Great British Nuclear – the government company formerly now as British Nuclear Fuels – plans to announce successful bidders for its small modular reactor (SMR) competition by the end of this year. It recently acquired Wylfa and Oldbury-on-Severn in Gloucestershire as two possible sites for new nuclear projects from Horizon Nuclear Power. It was the first time the government had acquired land for new nuclear since the 1960s.
Gwen Parry-Jones, chief executive of of Great British Nuclear, said: “Having agreed to purchase the Wylfa site earlier this year, GBN looks forward to working with the government on the market engagement programme for large scale gigawatt providers and also delivering this vital project in the years to come.”
Tom Greatrex, chief executive of the Nuclear Industry Association trade group, said: “The government is absolutely right to pursue more large-scale nuclear alongside the SMR programme: it is proven technology that delivers clean, sovereign power and can transform communities with thousands of high quality, long term jobs and apprenticeships. Wylfa is an ideal place for a big nuclear project, and the community knows nuclear.
“We welcome the Government’s engagement with potential partners internationally, and we urge them to move forward at pace. A large-scale project at Wylfa would be the single biggest inward investment in Welsh history, and a huge step towards both energy security and net zero for the whole country.”
Previous plans for a new nuclear power station at Wylfa collapsed in 2019 when Hitachi of Japan announced its withdrawal from the Horizon project, which it had acquired in 2012.
Negotiations between Hitachi and the UK government collapsed when the latter was only prepared to allow Wylfa £75 per megawatt hour, compared to the £92.50 (at 2012 prices) guaranteed to French developer EDF at Hinkley Point C.
The Nuclear Energy (Financing) Act, passed by parliament in 2022, introduced a regulated asset base (RAB) model as an option to fund future nuclear projects.
Under this model a company receives a licence to charge a regulated price to consumers, similar to how the Thames Tideway super-sewer has been funded. The model enables investors to share some of the project’s construction and operating risks with consumers, lowering the cost of capital.
The RAB model differs from the contract for difference (CfD) approach that was used to finance Hinkley Point C. With the Hinkley CfD, the developer agreed to pay the entire cost of constructing the plant, in return for an agreed fixed price (the strike price) for electricity output once the plant is online. This is ultimately funded by consumers, who will pay the difference between the wholesale electricity price and the final strike price, but consumers do not start paying until the power station is up and running.
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