Big British energy users, including manufacturers and transport groups, are so concerned by the threat of rising electricity prices that they are considering investing in new nuclear power stations, The Times has learnt.
British Energy, the nuclear generator that operates the UK’s existing nuclear fleet, is expected to disclose the identity of at least one potential partner in January, but sources familiar with the talks have revealed that some of the would-be partners are from outside the energy industry and the financial sector. Two winters ago, soaring power prices put many of Britain’s important industrial manufacturers, including chemical companies and steel and aluminium producers, under severe financial strain.
Manufacturers hope that by joining a consortium of developers to build nuclear power stations they could protect themselves from future price rises and increase their economic competitiveness. Industry experts suspect that companies including Corus, the steelmaker, and Network Rail, the train provider, which already has a long-term energy contract to take power from British Energy, may be considering joining a consortium that is developing new nuclear facilities. In Finland and France, where power stations are being built, industry partners, with long-term offtake agreements, have been key partners in the development teams behind the consortiums.
The Finnish reactor, the first to be built in Western Europe since the early 1990s, is run on a not-for-profit basis on behalf of its main customers, who are also its shareholders. This group comprises Finland’s biggest energy users, who are guaranteed a stable supply of relatively cheap electricity rather than a dividend. A spokeswoman for Corus would say only that the company supported the argument that old nuclear power stations should be replaced with a new generation. Paul Spence, the head of strategy and business development at British Energy, said: “Industry realizes that the cost of energy is a really important competitive factor.
They have been on a rollercoaster ride in the last two to three years, which has been really difficult to manage.” British Energy has had a strong response to its search for one or two partners for a new nuclear build program. According to the company, more than ten potential partners are in discussions. Energy companies including Centrica, Scottish and Southern Energy and EDF have already declared that they are in talks with British Energy. Other companies that are thought to be in discussions with British Energy include big continental utilities that are keen to expand outside their home markets, including E.ON and RWE, of Germany, and Endesa and Iberdrola, of Spain.
Financial partners such as infrastructure funds and private equity groups have not participated in talks so far, but they are expected to join later, if the Government gives the industry the green light to replace Britain’s ten ageing nuclear power stations. British Energy wants to secure its long-term future by developing new stations on its existing sites. With the highest demand for power in the South East and around London, the company has identified four sites — Sizewell, Bradwell, Hinkley and Dungeness — as prime candidates for new nuclear facilities. (timesonline)