E.ON and RWE Form Joint Venture to Develop Britain's Nuclear Power Capacity

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Researched by Industrial Info Resources (Sugar Land, Texas)--The British subsidiaries of RWE AG (OTC:RWEOY) (Essen, Germany) and E.ON AG (OTC:EONGY) (Dusseldorf, Germany) have formed a 50:50 joint venture to develop new nuclear power stations in the United Kingdom. RWE npower (Swindon, United Kingdom) and E.ON UK Plc (Coventry, U.K.) are aiming to set up nuclear power stations with a combined capacity of at least 6,000 megawatts. The joint venture intends to secure locations sold by the Nuclear Decommissioning Authority (NDA) (Cumbria, U.K.) and go through the required approval processes before setting up and operating new nuclear power stations. The reactor technology to be used has not been finalized and will be selected after a thorough study of the technical and commercial merits of each site.

The two firms have a presence in 20 different nuclear power stations, with their parent companies commanding joint ownership of three nuclear reactors in Germany. The new joint venture will benefit tremendously from the skills, resources, and experiences of both the companies. The two firms also have the financial strength required to implement a project of such a mammoth size.

The CEO of RWE npower, Andrew Duff, has stated that the company is targeting meeting the nation's energy needs with a simultaneous focus on reduction of carbon-dioxide emissions. He announced that joint venture partner E.ON had the required experience and success to complement RWE npower's strengths for the partnership to succeed. He added that the U.K.'s power industry needs huge changes, and that old coal and nuclear power plants need to be replaced by more environmentally friendly power plants.

In the opinion of Dr. Paul Golby, CEO of E.ON UK, replacing more than 60% of the power generating units is the only way that the U.K. will be able to secure a regular supply of power at an affordable cost and also reduce carbon emissions. The CEO of E.ON AG, Dr. Wulf Bernotat, said that in the current days of expensive energy, nuclear power is the most prudent way to ensure a reliable and low-carbon source of power.

RWE npower recently acquired the Superior Plumbing Installations Group Limited (SPI) (Burntwood, Staffordshire, United Kingdom), one of the largest companies in the British building-services sector. The acquisition will help RWE npower expand its presence in the energy-services sector. RWE npower's home team was set up in 2007 to enhance the central heating installation and boiler servicing business of the firm. SPI provides electrical, maintenance, and mechanical services primarily to social housing and public buildings such as schools and libraries. SPI's client base is spread across England and Wales and the company's staff of 500 is reputed to provide expert and committed services. RWE npower will now be able to help in the improvement of the social housing sector and provide high quality home energy services to both homeowners and tenants. The firm will also be able to play a bigger role in the market of installation, maintenance, and repairs in the U.K.'s social housing sector, which is estimated to be worth more than $19 billion.

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