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E.ON picks nuclear partners, targets Britain - extended

German utility E.ON has picked Areva and Siemens as partners to build new nuclear power stations in Britain, the companies said on Wednesday.

In a joint statement, E.ON AG said it would use the 1,600 megawatts (MW) advanced pressurized-water reactor, or EPR, of France’s Areva and the “conventional island” of Siemens to build large new nuclear plants in the UK.

The British government has given the green light to a series of new nuclear power stations, which are virtually free of climate-harming carbon dioxide emissions, to replace ageing equipment and secure its future power supply. The decision has triggered a fierce bidding war for £11 billion nuclear operator British Energy, which runs eight active stations on sites also seen as prime candidates for new build.

France’s EdF and Germany’s RWE are seen as the front runners, but E.ON, the owner of British power supplier Powergen, said last week it was keeping its options open regarding a bid. An industry source said the company had also put in an offer for land currently being sold off by the British government’s Nuclear Decommissioning Authority (NDA). The NDA has received proposals from over 30 parties for the undeveloped plots, which surround 18 mostly deactivated nuclear sites also earmarked for potential new build.

An E.ON spokesman said the ball was in the UK government’s court to define concrete nuclear proposals, but added that the company’s track record made it a strong candidate. “We assume that this will happen in due course and that due to our international approach and our technical expertise we will be recognized as a favored partner,” he said. E.ON also agreed to develop further Areva’s boiling water reactor SWR 1000, which has a capacity of about 1,250MW. “The companies are thus clearly affirming their conviction that carbon-free electricity generation will play a growing role in a balanced energy mix,” E.ON said. Spokesmen for both Siemens and E.ON said the cooperation plans described intentions only and therefore could not give details of financial value.

E.ON and rival RWE want to use their existing presence in Britain to participate in nuclear expansion as Germany is legally committed to phasing out nuclear plants and stop building new ones under an eight-year old law. E.ON said it was important to establish new cooperation deals early enough to obtain components in time. The world market for power plant material and labor is tight.

EPRs, or European pressurized-water reactors, and SWRs --boiling-water reactors known by their German abbreviation -- represent the third generation of nuclear plants and scientists are already working on the fourth. (Reuters)