E.ON and RWE Create New Nuclear Company

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Researched by Industrial Info Resources (Sugar Land, Texas)--A new player in the British nuclear market has been formally launched by the United Kingdom subsidiaries of German energy giants RWE AG (OTC:RWEOY) (Essen, Germany) and E.ON AG (OTC:EONGY) (Dusseldorf, Germany).

Horizon Nuclear Power (Gloucester, England), created by RWE npower and E.ON UK, is a 50:50 joint venture that aims to develop about 6,000 megawatts of new nuclear capacity in the U.K. by 2025. The company has a war chest of up to £15 billion ($25 billion) and believes it can create more than 11,000 jobs during the construction of the nuclear power plants. Horizon will start operating on November 16.

Earlier this year, E.ON and RWE took part in a highly competitive online auction for new nuclear sites, securing 178 hectares (438 acres) of land designated for nuclear construction in Wylfa, North Wales, as well as an option to acquire grid connection rights in the area. Horizon also purchased 48 hectares (119 acres) in Oldbury, Gloucestershire. For additional information, see May 1, 2009, article - U.K. Nuclear Sites Sell for $577 Million.

"Nuclear energy will form a key part of Britain's low-carbon future, and Horizon Nuclear Power will play a key role in delivering new nuclear stations, helping achieve the U.K.'s stretching environmental targets and stabilise energy prices," said Chief Operating Officer Alan Raymant. "We've met a lot of local people and groups around our sites at Oldbury and Wylfa, and we'll maintain an open, no-surprises approach. Technical investigations are progressing well, and we'll shortly be engaging further with local organisations and the public on the detailed studies required to prepare consent applications."

Horizon Nuclear Power is currently in a competitive tender process with Areva SA (EPA:CEI) (Paris) and Westinghouse Electric Company LLC (Monroeville, Pensylvania) to decide which reactor technology it will use at the new plants.

Raymant commented: "Choosing our reactor supplier is a significant milestone and the technical and commercial evaluation of our options is well under way. A team of nuclear experts from across RWE and E.ON has been put in place to support this process, with the aim of selecting a preferred supplier for exclusive negotiation early in the new year."

The U.K government has plans to allow at least four new nuclear plants to be built in order to address the country's impending energy crisis as well as meet emissions-reduction targets. Just how the U.K. intends to fast-track the nuclear build programme will be revealed in the eagerly awaited Nuclear National Policy Statement, scheduled for publication this week.

"The imminent publication of the Government's Nuclear National Policy Statement is also a key step, and we look forward to playing our part in the consultation process that follows," added Raymant. "It's vital that the Government sticks to the timeline for establishing the regulatory and consenting framework for new nuclear if we are to deliver what the country needs in terms of reliable, low-carbon electricity."

Others aiming to take part in the new-build programme include Electricite de France SA (EPA:EDF) (Paris), which secured the 200-hectare Bradwell site and, most recently, a consortium comprising GDF Suez (Paris), Iberdrola Renovables SA (Valencia, Spain), and Scottish And Southern Energy plc (OTC:SSEZY) (Perth, Scotland). This consortium has agreed to pay £70 million ($115.5 million) for a site near Sellafield in Cumbria. For additional information, see November 2, 2009, news article - Third Nuclear Player Enters U.K. Power Industry.

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