Comment

This blog has previously highlighted and commented upon the difficulties faced by all parties in deployment of new nuclear plants in the United Kingdom. Whilst recognising the need for new generation capacity this corner of the internet, is yet to be convinced that nuclear power represents the solution to the problem for a number of reasons.

Principally amongst this is the price support mechanism – essentially a subsidy – to be levied upon consumers to provide investor assurances do not represent good value. The Treasury has shown little willingness to provide the backstop guarantees that would be required and, it would take the most confident of near-sighted optimist to suggest competition of the first station by 2017 as had originally been hoped.

Retrenchment in existing nuclear policy and drive for new stations across Europe represents a headwind that is likely to only gain in strength. If EDF/Centrica can convince their shareholders, if the Treasury can be convinced and if the UK public are willing to pay then it is likely that the UK will have a new nuclear station on the grid around 2020-2022.

The news today that Areva and China Guangdong Nuclear Power (CGNP) are withdrawing their joint approach for the Horizon project has been widely reported and I present two articles in this post from CityAm and The Guardian

CityAm article – Nuclear blow as Areva fails to bid for site

British nuclear power project Horizon has attracted just two bidders, after Areva and China Guangdong Nuclear Power (CGNP) dropped their joint approach, a source said yesterday.

Offers rolled in on Friday for Horizon, which was put up for sale by RWE and E.ON in March.

But Areva confirmed yesterday that it and CGNP did not submit a bid, and that they have “suspended their interest”.

Areva was in the running to build parts of the plants for previous owners RWE and E.ON, before they pulled out, blaming spiralling costs.

Areva then made a play for the entire project, revealing in June that it would team up with CGNP to bid.

Two bids were submitted for Horizon on Friday – one from Areva’s competitor Westinghouse and its parent company Toshiba, the other from Japanese engineer Hitachi and Canadian counterparty SNC-Lavalin, an industry source said.

Horizon encompasses sites in Anglesey and Gloucester that are earmarked for six new nuclear reactors, with an estimated development cost of £15bn.

The project was set up in 2009 with the aim of adding up to 6.6 gigawatts of power to the UK’s ageing energy network.

But overshadowed by last year’s Fukushima disaster and Germany’s subsequent withdrawal from the sector, nuclear firms have struggled to retrench.

It was reported at the weekend that Spain’s Iberdrola, battling to rein in its debts, could walk away from the NuGen nuclear project at Sellafield, Cumbria.

The Department for Energy and Climate Change expects the nuclear industry to develop around 16 gigawatts of new capacity by 2025.

via Nuclear blow as Areva fails to bid for site | City A.M..

The Guardian – British nuclear plans suffer blow as Chinese investors pull out

Two new nuclear projects in UK the suffer as firms in running to buy a stake pull out

Iberdrola, the Spanish group that owns Scottish Power, is considering dropping out of a separate consortium bid to build a new nuclear plant near Sellafield in Cumbria. Photograph: Pa Photos/Greenpeace

The government’s nuclear energy plans were in trouble as Chinese investors withdrew interest in two projects and local councils postponed a decision on storing atomic waste.

Areva, the French nuclear engineering group, confirmed that it had pulled out of the running to buy a stake in Horizon Nuclear Power, the enterprise planning to construct new reactors at Wylfa in Wales and Oldbury in Gloucestershire. Areva said its partner, the state-owned China Guangdong Nuclear Power Group (CGNPC), had also shelved its bid.

“Areva and CGNPC have suspended their interest in the planned sale of Horizon Nuclear Power and did not submit a bid,” an Areva spokeswoman said, adding that the company was still committed to new nuclear in the UK through other avenues.

This is a blow for the government because Areva is at an advanced stage in getting regulatory approval for the design of its European pressurised reactor (EPR), while the Chinese are considered to have the deepest pockets.

Two other bidders, one involving US-based engineering group Westinghouse and the other led by Hitachi of Japan, are still in the running to take a stake in Horizon – although Westinghouse’s backer, another Chinese state-owned firm, China National Nuclear Power Corporation, is also understood to have withdrawn from the consortium.

“The Chinese could not get the commitments they were looking for from the British government,” said one source with contacts in the Beijing nuclear industry, adding that the problem was about technology rather than political issues. Some British MPs and commentators had raised questions about the wisdom of allowing Chinese state firms access to sensitive UK energy systems.

There have also been reports that Iberdrola, the Spanish group that owns Scottish Power, is considering dropping out of a separate consortium bid to build a new nuclear plant near Sellafield in Cumbria, while France’s EDF was said to be struggling to complete work on a generic design assessment it needs in order to proceed with building a new atomic power station in collaboration with Areva at Hinkley Point in Somerset.

The Office of Nuclear Regulation has been concentrating on a generic design assessment of EDF and Areva’s EPR facility but industry specialists said the process was unlikely to be completed by the end of November as planned in order for a final investment decision on Hinkley to be made by the end of the year. EDF insisted everything was “on track”.

The UK government was shaken in March this year when German utilities, E.ON and RWE, said they wanted to pull out of Horizon Nuclear Power, with a deadline for bids last Friday.

Neither E.ON nor RWE were willing to comment on the situation but the withdrawal of a leading name such as Areva plus the possible exit of the two huge Chinese groups will worry a government in desperate need of new atomic plants to meet a looming power shortage when old nuclear and coal-fired stations are retired.

Any total withdrawal of the Chinese from Horizon will put more pressure on Westinghouse, now owned by Toshiba, and Hitachi, whose nuclear technology is not yet near any licensing approval for use in the UK.

The other project eyeing new nuclear in the UK is NuGen, owned by Spain’s Iberdrola and France’s GDF Suez, which is considering reactors in Cumbria and says it will make a decision by 2015. British utility SSE has already withdrawn while Iberdrola has been unable to quash speculation that it is consiering a similar move in reaction to heavy financial commitments elsewhere in the UK.

Meanwhile, the government’s hopes of proceeding with much delayed plans for a high-level waste repository in the one area of Britain that has shown any appetite for such a scheme were also set back. Three councils, Cumbria county and Allerdale and Copeland districts, this week delayed a decision on new nuclear waste sites – due in October – until January.

via British nuclear plans suffer blow as Chinese investors pull out | Business | The Guardian.

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