BRITAIN’S nuclear strategy has been left in tatters after German utilities E.ON and RWE suddenly ditched their £15bn plans to build two new reactors.
The firms blamed “significant ongoing costs” for shelving their scheme, which had been due to supply more than a quarter of Britain’s new nuclear energy by 2025. The news will fuel fresh fears that the UK is facing an energy crisis and will be unable to meet the demands of its population and businesses in a few years’ time.
The Horizon joint venture and its sites in Anglesey and Gloucestershire will now be sold, though experts said there are few obvious buyers.
Investec analyst Angelos Anastasiou said: “EDF and Centrica already have the prime sites and GDF and Iberdrola are probably exposed enough. A lot more needs to be done.”
European firms have been held back by the downturn and moves by German and French politicians to phase out reactors.
The future of nuclear power has looked shaky since last year’s meltdowns at Fukushima which, coupled with the coalition’s wavering stance on nuclear and a tough funding market, has made investing in new builds in Britain an even riskier prospect.
While the government wants to use nuclear power to help replace ageing fossil fuel plants, the Lib Dems have pushed for new builds to be cut off from public subsidy.
Energy minister Charles Hendry said yesterday the withdrawal “is clearly very disappointing, but… the UK’s new nuclear programme is far more than one consortia and there remains considerable interest”.
Centrica and EDF repeated their commitment to UK nuclear, saying they will make a decision on a new plant at Hinkley Point by year end.
The coalition will reveal its plans to reform the energy market, which is expected to lay out priorities for renewable energy, later this year.
Jeremy Nicholson of the Energy Intensive Users Group said it remains to be seen whether the overhaul “is going to be enough to persuade companies to commit to substantial capital investment over the coming decades”.