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Thursday, 24 April 2014

Government pushed to take on nuclear new-builds

Pressure is mounting on the Government to take over the nuclear new-build programme, which includes a plant at Sellafield.

The GMB Union is calling for the state to step in after another private company pulled out.

Centrica, the owner of British Gas, has announced that it would not take up an option for a stake in the construction of nuclear power stations at Hinkley Point in Somerset, and Sizewell, Suffolk.

Chief executive Sam Laidlaw said the company was "uncertain about overall construction costs and timeline." Its partner, EDF, must either pick up the tab or find a new partner.

Although Centrica’s decision has no direct bearing on the NuGen consortium’s proposals for Sellafield, it adds to doubts about whether the private sector will be able to fund new build.

Gary Smith, national officer of the GMB, said: “Since the state has to step in to guarantee prices for return on investment, why not go the whole hog and have fully-accountable nationalised delivery? Much of money paid by UK households to heat their homes will be spent on components that will be built abroad unless there are major changes.”

Arguably, only Chinese investors have the huge reserves of capital required for nuclear new build.

Ministers had been hoping that a Franco-Chinese consortium would bid for the Horizon project to build reactors at Wylfa in Anglesey and Oldbury, Gloucestershire. But French engineering group Areva and its partner, the China Guangdong Nuclear Power Corporation, did not table a bid by the September deadline.

Analysts believe that Centrica’s withdrawal could clear the way for the Chinese to take its place.

The county council’s decision last week to rule out a radioactive-waste repository in Cumbria has raised a further question mark over new build. The Government’s official position is that new reactors can go ahead only if there is a process for dealing with the waste they would produce.

Any collapse of nuclear new-build proposals would be a blow for west Cumbria because so many jobs ride on it.

NuGen has already lost one member. Scottish and Southern Energy pulled out in September 2011 leaving Iberdrola and GDF Suez. NuGen has paid £20m for an option to purchase land at Sellafield, in what could prove to be a £70m deal.

It is carrying out investigations to see if the land is suitable for reactor development.

If the partners decide to proceed in 2015, the aim would be to commission the new plant in 2023.

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