NuGen Enters U.K. Nuclear Market

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The establishment of the United Kingdom's latest nuclear player, NuGeneration (NuGen), has been announced by consortium partners GDF Suez (EPA:GSZ) (Paris), Iberdrola Renovables SA (Valencia, Spain), and Scottish and Southern Energy plc (OTC:SSEZY) (Perth, Scotland).

The new company will oversee the consortium's plans to build 3.6 gigawatts (GW) of new nuclear capacity at a 190-hectare site next to Sellafield in West Cumbria. The Sellafield site was one of eight sites approved by the U.K. government in October for the construction of new nuclear power stations. For additional information, see October 21, 2010, article - U.K. Approves Eight Nuclear Power Plant Locations.

NuGen intends to prepare detailed plans for developing the site. The plans will be submitted for consideration to the relevant planning authorities, with the goal of making a final investment decision in 2015 and commission the nuclear plant in 2023. The breakdown of the ownership of NuGen is:

• GDF Suez - 37.5%
• Iberdrola - 37.5%
• Scottish and Southern Energy - 25%

The new company will be headed up by GDF's Olivier Carret, who will act as Chief Operating Director, and Iberdrola's Alfio Vidal, who will be NuGen's Chief Nuclear Director, following his role as the former plant manager of the Cofrentes nuclear power plant, a 1,092-MW facility near Valencia, Spain.

"NuGen's greatest strength is that it can draw upon the experience, resources and skills of three well-established and respected energy companies that have experience of operating and delivering nuclear and other generation plants across Europe," Vidal said. "We also hope to draw upon the expertise and knowledge that comes from the long tradition of nuclear power in West Cumbria. We will shortly be establishing a permanent base in the area, from where we expect to contribute to Cumbria's 'Energy Coast' vision and seek to develop strong and long-term relationships with local communities in West Cumbria."

The formation of NuGen comes months after two rivals have begun offering preliminary contracts for their own U.K. nuclear projects. In September, EDF Energy (London, England), the U.K. arm of French energy giant Electricite de France SA (EPA:EDF) (EDF) (Paris, France), offered the U.K.'s first nuclear contracts in more than 20 years to companies involved in its proposed builds at Hinkley Point C and Sizewell C. For additional information, see September 20, 2010, article - EDF Energy Awards First U.K. Nuclear Contracts.

In August, Horizon Nuclear Power, a joint venture between the U.K. subsidiaries of German energy majors RWE AG (OTC:RWEOY) (Essen, Germany) and E.ON AG (OTC:EONGY) (Dusseldorf, Germany), awarded contracts for preliminary work at the Wylfa site in North Wales to France's Areva SA (EPA:CEI) (Paris) and a rival consortium headed by Westinghouse Electric Company LLC (Monroeville, Pennsylvania). For additional information, see August 4, 2010, article - Preliminary Work Begins on U.K. Nuclear Plant.

In related news, one the final hurdles for the use of the European Pressurised Reactor (EPR) design in the U.K. was overcome this week. The Nuclear Directorate of the Health and Safety Executive claimed that EDF and Areva have put in "a considerable amount of high quality work" to address concerns the executive had with the EPR's control and instrumentation system.

EDF Energy Chief Executive Vincent de Rivaz said: "This decision by the U.K. safety authority is very good news for the EPR. The control and instrumentation issue was and is one of the most sensitive in terms of nuclear safety and was vital to resolve. Closure of the only regulatory issue, on such a significant topic, is a defining moment for the EPR."

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