Preliminary Work Begins on U.K. Nuclear Plant

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Work is set to begin on the U.K.'s first new nuclear power plant as Horizon Nuclear Power (Gloucester, England) 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).

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), said that preliminary work by both companies will last through the end of the year. Areva's European Pressurized Water Reactor (EPR) and Westinghouse's AP1000 reactor are currently being assessed by the U.K.'s Health and Safety Executive and the Environment Agency.

The new nuclear plant, located on the Isle of Anglesey, will have a generating capacity of up to 3,300 megawatts (MW). The plant is targeted to be operational be operational by 2020. An older, 980-MW nuclear plant at Wylfa that has been operational since 1971 will be decommissioned from this year. For additional information, see April 13, 2009, article - U.K.'s Wylfa Nuclear Power Plant Gets Decommissioning Green Light.

"We are already working with both companies in a formal procurement process regarding our preferred vendor," commented Alan Raymant, Horizon's chief operating officer. "Progressing with some studies now for both designs will support our planning and licensing process by allowing us to develop the site-specific designs and make us a more informed buyer. This will help deliver the best solution for Wylfa specifically and underpin our confidence in the build programme. It will also drive more competitive bids, which ultimately will be good for the consumer, keeping the price of energy down."

Horizon intends to build another nuclear facility in Oldbury, Gloucestershire, which the company won in a hotly contested online auction last May. The Oldbury plant will have a generating capacity of about 3,300 MW. For additional information, see May 1, 2009, article - U.K. Nuclear Sites Sell for $577 Million. Horizon will invest about £15 billion ($24 billion) in both projects.

The Westinghouse-led consortium, known as Nuclear Power Delivery U.K., comprises The Shaw Group (NYSE:SHAW) (Baton Rouge, Louisiana), Laing O'Rourke (Dartford, England) and Toshiba Corporation (TYO:6502) (Tokyo, Japan).

Rita Bowser, the consortium's managing director, said: "The announcement of the early works agreement with our team is a very positive sign of Horizon's determination to make sure they are able to secure an attractive bid from us while maintaining their timeline. We believe that the AP1000 design offers a very attractive combination of features for Horizon's proposed development and that the construction experience of the AP1000 plants currently being built on schedule in China will be invaluable in providing confidence that future U.K. plants can be built on time and to budget."

Work began last April on Unit 1 of the Sanmen nuclear project in China's eastern Zhejiang province, the first to use Westinghouse's AP1000 technology. The facility will become operational in 2013. Sanmen Nuclear Power Station will have six 1,250-MW units. For additional information, see April 22, 2009, news article - Construction of Largest Chinese-U.S. Energy Project Officially Begins.

Other companies planning to build nuclear plants in the U.K. include Electricite de France SA (EPA:EDF) (Paris), which bought the 200-hectare Bradwell site, and a consortium comprising GDF Suez (EPA:GSZ) (Paris), Iberdrola Renovables SA (Valencia, Spain), and Scottish and Southern Energy plc (OTC:SSEZY) (Perth, Scotland). The U.K. government has set a target of building 10 new nuclear plants by 2025 to offset a looming energy crisis as older nuclear and fossil-fuelled plants are shut down in the coming years.

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