SSE Ditches Nuclear for Renewables

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--One of the U.K.'s largest energy companies, Scottish and Southern Energy plc (OTC:SSEZY) (Perth, Scotland), has announced that it is abandoning its plans to take part in the country's new nuclear build programme.

SSE is a partner in NuGeneration Limited (NuGen), which was formed with GDF Suez (EPA:GSZ) (Paris) and Iberdrola Renovables S.A. (Valencia, Spain), and which plans to build 3,600 megawatts (MW) 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 2010 for the construction of new nuclear power stations. For additional information, see October 21, 2010, article - U.K. Approves Eight Nuclear Power Plant Locations.

However, SSE has now notified GDF Suez and Iberdrola that is ending its involvement in the joint venture and intends to sell them its 25% stake, allowing it to focus on its existing businesses of renewables, gas-fired generation and the development of carbon capture and storage (CCS) technology.

This will take its former partners' shares in the venture from 37.5% each to 50%. NuGen officially entered the U.K. market last December. For additional information, see December 1, 2010, article - NuGen Enters U.K. Nuclear Market.

The news comes at a turbulent time for the nuclear power sector in Europe, which is still reeling from the political and public anti-nuclear fallout since the nuclear disaster at the Fukushima plant in Japan, earlier this year. While Germany, Switzerland and Italy have called time on nuclear power development, the U.K. has remained committed to building Europe's largest fleet of new, third-generation nuclear plants. Just last week, German industrial giant Siemens AG (NYSE:SI) (Munich, Germany) became the first major engineering company to abandon the nuclear power sector. For additional information, see September 21, 2011, article - Siemens Walks Away from Nuclear Power.

"The UK will need both nuclear and renewable energy in the future, but we have made it clear from the start of our involvement in NuGen that for SSE our core investment in generation should be in renewable energy," said Alistair Phillips-Davies, Generation and Supply Director of SSE. "At the same time, it made sense to be part of NuGen to help establish whether some participation in new nuclear power stations would be the right thing for SSE, given we have no experience of ownership or operations in the nuclear sector."

"We have always adopted a cautious approach to the financial and other issues associated with nuclear power development," he added. "NuGen will have to make a multi-billion pound investment decision around 2015, but even getting to the point of that decision will absorb, from now on, significant financial and management resources from everyone in the joint venture. We have concluded that, for the time being, our resources are better deployed on business activities and technologies where we have the greatest knowledge and experience. For the moment, our investment plans are focused on renewable energy, gas-fired generation, including carbon capture and storage options, and alternative-energy developments."

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