Hitachi has suspended plans to build its Anglesey nuclear power plant, putting thousands of jobs at risk.
The decision comes following speculation that it would scrap the £20 billion Horizon nuclear facility over concerns of rising construction costs.
As a result, the UK will be forced to look at importing energy, use more of its fossil fuels or attempt to rush forward with its expansion of renewable energy if it is to keep the lights on throughout the 2020s and 2030s.
The Japan based firm has begun talks with the UK Government over funding the Wylfa Newydd project in June, however failed to find investors to back the plans.
Duncan Hawthorne, chief executive of Horizon Nuclear Power, said: “We have been in close discussions with the UK Government, in cooperation with the Government of Japan, on the financing and associated commercial arrangements for our project for some years now.
“I am very sorry to say that despite the best efforts of everyone involved we’ve not been able to reach an agreement to the satisfaction of all concerned.
“As a result we will be suspending the development of the Wylfa Newydd project, as well as work related to Oldbury, until a solution can be found.”
Approximately 9,000 people had been expected to work on the project, which was due to come online by the mi-2020s, with 850 highly skilled permanent jobs to be created once complete.
Hitachi has said the decision will cost the firm 300 billion yen (£2.1 billion) in expenses and a further 300 billion yen as “extraordinary losses”.
The site was set to have a generating capacity of 2,900MW with a sixty-year operational life and would have been instrumental in the government’s nuclear policy, which has recently faced heavy criticism.
Hinkley Point power plant in Somerset will now be the only new UK nuclear reactor under construction and, with the UK’s ageing fleet, will prove to be a blow to the country’s move away from its reliance on coal to provide a reliable baseload of energy.
Justin Bowden, national officer of the GMB union, said: “Hitachi’s announcement, coming so soon after the Moorside fiasco, raises the very real prospect of a UK energy crisis.”