UK Intends To Deliver On New Nuclear, Energy Secretary Tells MPs

Posted by PJ Owen (SONE Webmaster) on 26 November 2012 in Articles

Tagged with: Department of Energy, Ed Davey, Hitachi, Horizon, Tim Yeo.

The sale of the Horizon nuclear energy venture to Hitachi was a “shot in the arm” for energy policy in the UK and shows that the government and the nuclear industry can deliver on a cost-effective, third-generation of reactors, the energy and climate change secretary has said.

Giving evidence to a committee of politicians about energy infrastructure and energy policy, Ed Davey said there was huge “international interest” when the Horizon nuclear power venture was put up for sale with many countries and companies taking “a much greater interest” in the new UK nuclear market than previously.

He said when Germany’s RWE and E.ON announced that they were pulling out of the Horizon venture there were lots of headlines saying it was a vote of no confidence in the UK’s energy policy, and that new nuclear was not going to be.

Mr Davey said: “I took the time to speak to RWE and E.ON and they made it clear to me that their decision was not based on UK energy or    nuclear policy, but on decisions that related to policy changes in Germany.

“What we saw when they put Horizon up for sale is huge international interest, and in many ways it was a really positive shot in the arm for    policy, because you saw many countries and companies taking a much greater interest in the new UK nuclear market than previously.

“Hitachi, I am told, paid more than many people expected they would pay, so I think that was a vote of confidence.”

In October 2012 Hitachi said it will start leading a programme of building new nuclear reactors in the UK after agreeing to buy Horizon for about 700 million pounds (1.1 billion US dollars, 864 million euro) from RWE and E.ON.

Mr Davey said his concern about nuclear over the years has been its cost, but a third generation of nuclear power in the UK could for the first time be “a cost-effective nuclear industry” that has learned from the mistakes of the past.

He said most of the Department of Energy and Climate Change’s budget is spent on decommissioning nuclear power stations. “We are now paying three billion pounds a year – and will for many years ahead – cleaning up for the electricity that was generated in decades past.

“We cannot do that again, so we have to go through a process where we insist that nuclear is cost competitive, and that is what I intend to deliver on.”

Committee chairman Tim Yeo said Hitachi is still “a considerable way off” making a final investment decision about building nuclear plants in the UK and will need to have investment partners to do so.

Mr Davey said Hitachi is looking at 2022 to be generating energy from a new nuclear plant. He said: “Their track record of building nuclear reactors across the world on time and on budget is very impressive; in the last 40 years they have built 20 nuclear reactors on time and on budget.”

Hitachi has said it will work with two leading British engineering companies, Babcock International and Rolls-Royce, to build two to three 1,300-megawatt reactor units at each of Horizon’s two sites – at Wylfa in Anglesey, and Oldbury in Gloucestershire – with the first unit becoming operational in the first half of 2020s.

A transcript of Mr Davey’s evidence, given to parliament’s energy and climate change committee on 20 November 2012, is online.