Energy companies seek new owner for Horizon Nuclear joint venture

Out-Law News | 30 Mar 2012 | 5:00 pm | 1 min. read

E.ON and RWE npower will not proceed with plans to develop their Horizon Nuclear Power joint venture project, the energy companies have announced.

The companies, who each own a 50% stake in the business, said their decision was based on "strategic grounds" and will seek alternative investors for Horizon. Horizon's sites remain "excellent development options", they said.

Alan Raymant, Horizon's chief operating officer, said that he was "grateful" for E.ON and RWE npower's support which had enabled the company to "bring its projects forward to an advanced stage".

The Horizon project was established in 2009 to provide an additional 6,000MW of new UK nuclear capacity by 2025 from an estimated investment of £15 billion. The company is working on proposals for new nuclear power stations at Wylfa on the Isle of Anglesey and at Oldbury-on-Severn, Gloucestershire.

In a statement, RWE npower said that the effect of Germany's accelerated phase out of nuclear power had had a knock-on effect on the company. In addition, the global economic crisis had made capital for major projects such as new nuclear harder to come by. Nuclear power projects are particularly large scale, with very long lead times and payback periods, it said.

Dr Tony Cocker, E.ON's chief executive, added that it would refocus its UK investment on projects that would allow the company to "deliver earlier benefit for customers and our company, rather than the very long term and large investment new nuclear power calls for".

"Our commitment to the UK remains as strong as ever and as our track record shows, with over £1 billion of investment in the last year alone, we will continue to select the right projects in which to invest," he added.

Although he said that he was disappointed by the companies' decision to sell their interest in the project, Energy Minister Charles Hendry reiterated the Government's commitment to nuclear as part of its clean energy mix."

The partners have clearly explained that this decision was based on pressures elsewhere in their businesses and not any doubts about the role of nuclear in the UK's energy future," he said. "The UK's new nuclear programme is far more than one consortia and there remains considerable interest."

Projects by EDF/Centrica and Nugen remained on track, he said, adding that the Horizon sites offered new players an "excellent ready-made opportunity" to enter the nuclear market.

In 2009, EDF and Centrica announced a joint venture to build four new nuclear power stations in the UK.