U.K. Seeks New Nuclear Investors

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- The U.K. government has said that it expects the buyers for the abandoned nuclear joint venture, Horizon Nuclear Power, to come from outside the companies already planning new nuclear projects.

Speaking to a special, House of Commons select committee, Energy Minister Charles Hendry defended the stability of the new nuclear build program and said the government was actively engaged in looking for new owners for Horizon. Last month, French energy giant Electricite de France S.A. (EPA:EDF) (EDF) (Paris, France) announced that it had no plans to buy Horizon. For additional information, see April 5, 2012 article - EDF Says No to Stake in Horizon Nuclear Power.

"We would not expect it to be one of the other two nuclear consortia to take over Horizon," Hendry said. "I think this would be new investors who come forward. We have quite actively sought investment from sovereign wealth funds, in different parts of the world because of their desire to invest in low carbon technologies. What we're looking for is a consortium where there is real proven expertise."

He added: "We will not sign up for anything we think is bad for bill payers. We believe nuclear should be the lowest-cost, large-scale energy source, and the price will reflect that."

Horizon Nuclear Power was ditched by its two key founders, RWE AG (OTC:RWEOY) (Essen, Germany) and E.ON AG (OTC:EONGY) (Dusseldorf, Germany) in March when they decided to exit the U.K.'s new nuclear build race. For additional information, see March 30, 2012 article - RWE and E.ON Drop U.K. Nuclear Power Joint Venture.

Horizon was formed in 2009 to build up to 6,000 megawatts (MW) of new nuclear power at two approved sites: Wylfa on the Isle of Anglesey and at Oldbury in South Gloucestershire.

The U.K. is aiming to add 10,000-14,000 MW of new nuclear electricity capacity between 2018 and 2025, depending on the choice of reactor design.

RWE revealed to the select committee this week that investing billions of euros in new nuclear power plants would have meant a the company suffering another credit-rating downgrade.

Volker Beckers, CEO at RWE npower, told the committee that Horizon did not make viable business sense: "It would have meant a downgrading, and we could not afford to do that."

His reasons were echoed by the other former, Horizon investor, E.ON. "Our decision was down to the financial firepower of the company," explained Tony Cocker, chief executive officer E.ON U.K.. "Nuclear is an extremely long-term investment."

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