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Halt on Nuclear Plans at Wylfa and Oldbury

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RWE Npower and E.On announced they will not be developing new nuclear power projects in the UK, which causes a setback to the government’s plan to attract investment in new nuclear power stations.

Both firms were planning to invest in new plants in Anglesey and Oldbury-on-Severn near Bristol under a joint venture called Horizon Nuclear Power.

It was originally formed in 2009 in Gloucester and was working on plans for new nuclear power stations at Wylfa on the Isle of Anglesey and at Oldbury-on-Severn in South Gloucestershire.

These were 2 of 8 projects the chosen by the government to replace old power plants that are due to be closed by the end of the decade. However last year Germany decided to close down it’s nuclear power plants by 2022 following the disaster at Fukushima  in Japan.

“It’s a big deal that they are pulling out,” Malcolm Grimston, an associate fellow at the Chatham House think tank, told BBC News.

“If you look at the utilities in Europe then they are two of the biggest. There aren’t that many huge players out there who could take over.”

The two firms are looking for another company to take over the project.

Volker Beckers, chief executive of RWE Npower, said: “We continue to believe that nuclear power has an important role to play in the UK’s future energy mix.

“We are therefore looking to ensure that work on development, including grid connection, can be taken up quickly by other potential investors.”

Energy Minister Charles Hendry said: “E.On and RWE’s withdrawal is clearly very disappointing, but the partners have clearly explained that this decision was based on pressures elsewhere in their businesses and not any doubts about the role of nuclear in the UK’s energy future.

Volker Beckers, chief executive of RWE Npower, said: “We continue to believe that nuclear power has an important role to play in the UK’s future energy mix.

“We are therefore looking to ensure that work on development, including grid connection, can be taken up quickly by other potential investors.”

Energy Minister Charles Hendry said: “E.On and RWE’s withdrawal is clearly very disappointing, but the partners have clearly explained that this decision was based on pressures elsewhere in their businesses and not any doubts about the role of nuclear in the UK’s energy future.

 

“The UK’s new nuclear programme is far more than one consortia and there remains considerable interest.

“Plans from EDF/Centrica and Nugen are on track and Horizon’s sites offer new players an excellent ready-made opportunity to enter the market,” he said.

EDF said their plans for the project in Hinkley Point is progressing well, but the final investment relies on it being profitable, for which the government reform is crucial.
“The government’s framework for electricity market reform must ensure we have a project which is good for consumers, policy-makers, jobs and investors,” said Vincent de Rivaz, chief executive of EDF Energy.

“How commercially viable these plants are is very questionable,” Rhys Kealley, lead analyst at Datamonitor, said.

“Even Centrica, who are partnered at the moment with EDF in a similar venture, is reluctant to make a commitment and they will be making a final decision on that some time before the end of the year.”

Last September Scottish and Southern Energy pulled out of a deal to develop a new nuclear power station, which prompted the move by the German firms to close their nuclear plants.

SSE sold their 25% stake in NuGeneration to partners GDF Suez and Iberdrola, saying they wanted to focus on renewable energy.

RWE says it will continue to invest in low carbon technologies. It has also invested £1.6bn in gas-fired power stations in the UK.

E.On says it will concentrate on projects with quicker results than nuclear, which takes 10 years to start generating electricity

In May, the government will announce it’s plan to reform the energy market, introducing measures to encourage investment and create a balanced range of electricity sources.Labour stressed that nuclear power was vital to “to make us less reliant on volatile fossil fuel prices, increase our energy security, and keep prices down for families”.

Greenpeace has been highly critical of the policy as well as the unions.

Greenpeace’s policy director Doug Parr said: “The government’s energy strategy is crumbling.

“Not even the billions of pounds of taxpayers’ money they have offered as incentives to the German and French nuclear industry are enough to make a new generation of power stations economically viable.”

Gary Smith from the union GMB, which represents workers in the nuclear industry, told the BBC: “I think it is clear, the government’s energy policy is in absolute tatters. It’s a shambles.

“Britain is being left as an also-ran in the energy market internationally and the nuclear specifically.”

“RWE and E.On’s decision… underscores the importance of the government’s electricity market reform delivering a framework that will provide certainty and confidence for other potential investors,” said Caroline Flint, shadow energy and climate change secretary.

 

 

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