5 February 2013

The Guardian (UK): Centrica withdraws from new UK nuclear projects

British Gas owner’s unexpected exit – blamed on rising costs and construction delays – clears way for Chinese investors

by Damian Carrington

guardian.co.uk, Monday 4 February 2013 11.44 GMT

Energy company Centrica has abandoned its plans for building new nuclear reactors in the UK, blaming rising costs and construction delays.

The move is a blow to the government’s aspirations to build the most ambitious fleet of new reactors in Europe, and comes on the day MPs severely criticised the management of nuclear waste at Sellafield and after Cumbria county council rejected proposals for a deep burial site to permanently dispose of the waste.

Centrica will forfeit its 20% option on four new nuclear plants planned by EDF in Somerset and Suffolk, writing down £200m in the process. EDF, owned by the French state, has been in talks with the state-owned China Guangdong Nuclear Power Corporation, which may pick up Centrica’s option.

Centrica’s exit means no major UK company remains involved in plans for new nuclear reactors in the UK, but Centrica retains its 20% stake in eight existing nuclear power stations.

Sam Laidlaw, chief executive of Centrica, said: “We believe that nuclear generation has a valuable role to play in a balanced UK energy mix. However, since our initial investment [in 2008], the anticipated project costs in new nuclear have increased and the construction timetable has extended by a number of years.” In particular, Laidlaw blamed the very large 1.6GW units planned for Hinkley Point in Somerset for making the project more expensive, and design modifications imposed after the Fukushima disaster for adding to delays.