Britain’s nuclear pickle, as French firms demand more subsidies for building reactors

The comments will send a shockwave through Whitehall because they come just weeks after the German utilities RWE and E.ON said they would not proceed with plans to build new nuclear plants at Wylfa in Wales and Oldbury in Gloucestershire.

“UK energy policy is being manipulated and subverted to make it possible for French nuclear power companies (EDF and Areva) to start building four new reactors in the UK – two at Hinkley Point in Somerset and two at Sizewell in Suffolk.”

GDF Suez’s nuclear reservations hit government energy policy French firm needs more financial incentives if it is to proceed with new nuclear plant in Cumbria, says CEO Gérard Mestrallet, Terry Macalister guardian.co.uk, 16 April 2012 The government’s energy policy has suffered a fresh blow when GDF Suez, the French firm behind plans to build a new nuclear plant in Cumbria, said it needed more financial incentives if it was to proceed.

Gérard Mestrallet, chairman and chief executive of GDF, said he wanted talks with the government about the right fixed or minimum price for producing nuclear energy: “We are, with our partners, going to take a decision in 2015 [on building a new plant at Sellafield]. Today it is very difficult to invest in a nuclear power plant without clear visibility.”

The government has promised to provide a fixed carbon price to make nuclear investment more attractive, and has proposed a “contract for difference” which some say will act as a price guarantee. But Mestrallet said what was on offer was “not enough and something is missing”.

The German firms run the Horizon joint venture in Britain. They cited concerns about financing the projects as well as costs associated with Germany’s abandonment of nuclear power in the aftermath of the Fukushima accident in Japan. This would leave only GDF and the major French electricity producer EDF in the race to build new atomic plants in the UK.

GDF has its own joint venture with Iberdrola of Spain called NuGen which insisted after the E.ON and RWE announcement that it remained “committed” to its planned 3.6 gigawatt plant at Sellafield.

But Mestrallet’s words make clear that GDF will only proceed if the British government makes further concessions to nuclear, something industry critics feared would happen.

The GDF warning came as the French grip on Britain’s energy infrastructure tightened with a plan to take full control of International Power (IP) for about £6.5bn…… the acquisition by GDF follows the purchase by EDF of nuclear operator British Energy and the growing influence of French nuclear engineering firm, Areva.

Jonathon Porritt, director of sustainability group Forum for the Future, recently expressed deep misgivings about the situation. He said in the Guardian last month: “UK energy policy is being manipulated and subverted to make it possible for French nuclear power companies (EDF and Areva) to start building four new reactors in the UK – two at Hinkley Point in Somerset and two at Sizewell in Suffolk.”…. http://www.guardian.co.uk/business/2012/apr/16/gdf-suez-nuclear-reservations-gerard-mestrallet?newsfeed=true

April 18, 2012 - Posted by Christina Macpherson | business and costs, politics, UK

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