Energy majors pair to play in UK nuclear expansion

London - This month has seen the announcement of two joint ventures  - one involving RWE Ag and E.ON AG, the other Scottish and Southern Energy Plc and Iberdrola SA -  as energy majors align themselves for the costly task of participating in the UK's nuclear new build programme.

A 50:50 JV between E.ON UK and RWE npower aims to secure sites being sold by the NDA (Nuclear Decommissioning Agency) and take them through the consents process to building and operating new nuclear power stations. The venture plans to develop at least 6GW of capacity in the UK, the parent groups added.

"Developing new nuclear power stations requires a substantial investment, and RWE and E.ON will together contribute the financial stability and balance sheet strength required to support a programme of this scale," said a joint statement. The companies already have stakes in 20 nuclear power stations around the world. In addition, E.ON and RWE already jointly own three nuclear reactors in Germany.

Andrew Duff, chief executive of RWE npower, said: "The UK power industry needs significant investment to replace aging coal and nuclear plant and to drive the change to a lower carbon economy. This joint venture will deliver an early, substantial and vital contribution from nuclear power. At the same time, large infrastructure projects can bring major benefits to the UK economy through jobs, direct investment and supply chain opportunities."

For E.ON, Dr Paul Golby, chief executive of E.ON UK, added: "The UK has to replace a third of its generating capacity in the next 15 years in a way that ensures security of supply, reduces carbon emissions and keeps energy as affordable as possible. The only way we can achieve this is to have a diverse energy mix."

Likewise, Scottish and Southern Energy Plc and Spanish energy group Iberdrola are forming JV to participate in the UK's nuclear new build programme. Working with UK government agencies, the JV initially aims to secure sites suitable for nuclear power stations, the companies announced 19 Jan.

Both Iberdrola and SSE may consider adding partners to the joint venture in the future, said the joint statement. The venture, it added, will not be bound to any single vendor for new nuclear development, and will be able to make use of the best available technology for each element of the nuclear new build programm

Alistair Phillips-Davies SSE's energy supply director, said: "We accept that one more tranche of nuclear power stations is necessary for the UK¹s energy policy goals from around the end of the next decade. We also recognise that we will have to continue to be able to source power generated from nuclear stations if we are to be able to meet our customers' energy needs in the long term."