Centrica quits nuclear plant plans for Hinkley Point
Centrica is to pull out of plans to build new nuclear power stations in Britain, dealing a fresh blow to the industry amid warnings that nuclear was turning into an “economic nightmare”.
The British Gas-owned company acquired a 20% interest in French firm EDF Energy’s eight nuclear power stations in this country and an option for a 20% stake in the building of new sites at Hinkley Point in Somerset and Sizewell in Suffolk.
Centrica said its 20% share of the pre-development expenditure – around £200 million – will be written off as an exceptional cost in the group’s 2012 results.
The company said the anticipated project costs in new nuclear had increased and the construction timetable had extended by a number of years.
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Chief executive Sam Laidlaw said: “It is clear that both construction costs and timeline for build have increased significantly.
“There has been good progress on the ground but we remain uncertain about overall construction costs and timeline.”
The news follows publication of a report by the Commons Public Accounts Committee (PAC) which showed that the “enormous” legacy of nuclear waste at Sellafield in Cumbria has been allowed to build up, with the cost of decommissioning the site reaching £67.5 billion, with no indication of when the cost will stop rising.
Last week leaders of Cumbria County Council decided against studying the prospect of building an underground nuclear waste site in its area.
A Department of Energy and Climate Change spokesman said: “We are determined to make the UK a leading global destination for investment in new nuclear, which will play a key role in our future energy mix.
“We welcome EDF Energy’s continued commitment and determination to take forward the Hinkley Point C project.
“The decision by Centrica reflects the company’s investment priorities and is not a reflection on UK Government policy.
“The recent purchase of Horizon Nuclear Power by Hitachi is clear evidence of the attractiveness of the new nuclear market in the UK.”
EDF said it respected Centrica’s decision, adding: “EDF Energy was prepared for this decision and understands that the profile and scale of this investment may not meet Centrica’s shareholders’ current expectations and priorities.
“EDF Energy values the expertise Centrica has brought to the new nuclear project and the continuing partnership between the two companies in its existing nuclear business.”
Chief executive Vincent de Rivaz said: “The new nuclear project at Hinkley Point C is making good and continuous progress. EDF Energy is working with Government to agree a price for the electricity at Hinkley Point C which will be fair and balanced for UK consumers and investors.”
Mr Laidlaw said the decision did not have to lead to a delay in the building of new nuclear power stations. It will be a matter for EDF as to whether they choose to pick up our share or bring in a partner,” he said.
Friends of the Earth’s head of campaigns, Andrew Pendleton, said: “The nuclear dream is becoming an economic nightmare. Centrica’s decision to pull out of building new reactors is further evidence of the escalating cost of this form of energy.”