EDF Says No to Stake in Horizon Nuclear Power

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Researched by Industrial Info Resources Europe (Galway, Ireland)--Electricite de France S.A. (EPA:EDF) (EDF) (Paris, France) has announced that it will not purchase the Horizon Nuclear Power project, which recently was abandoned by RWE AG (OTC:RWEOY) (Essen, Germany) and E.ON AG (OTC:EONGY) (Dusseldorf, Germany). The joint venture originally intended to invest in new plants at Wylfa, Anglesey, and Oldbury, South Gloucestershire, but last week the companies announced they were cancelling the plans for financial reasons.

The U.K. government hoped EDF would step in and save the projects, but the French energy giant has decided to go in a different direction. For additional information, see March 30, 2012 article - RWE and E.ON Drop U.K. Nuclear Power Joint Venture.

A spokesman for EDF said, "We will not be looking at Horizon, but we think they have very good sites, and we hope someone else will buy them."

EDF, with partner Centrica plc (OTC:CPYYY) (Windsor, England), is planning two new nuclear units at its site in Sizewell in eastern England. The company also intends to make an investment decision on two new reactors at Hinkley Point C in southwest England, costing an estimated £10 billion ($16 billion), by the end of 2012. The Hinkley decision is subject to an agreement with the British Government over pricing.

"With our partner Centrica, we are progressing a strong and credible new nuclear project," EDF said. "We are making progress on all fronts toward taking the final investment decision at the end of this year, as planned, on the UK's first two new nuclear plants at Hinkley Point.

"Clearly, that decision depends on having a profitable project that meets the financial targets. This, in turn, depends on agreeing, as soon as practicable, the contract for difference through transitional arrangements."

The transitional arrangements are a key part of the government's proposed Electricity Market Reform. The proposed contract for difference is effectively a long-term contract with a guaranteed price for power, which may require European Commission approval.

Last month, EDF postponed plans to develop a new nuclear plant at its Heysham site, stating that it will no longer pursue an arrangement with the national grid to establish a new connection from Heysham. For additional information, see March 20, 2012 article - EDF Drops One of its UK Nuclear Projects.

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