RWE and E.ON create UK nuclear partnership

20 January 2009

The UK subsidiaries of two German utilities are joining forces with the aim of constructing at least 6GW of nuclear power capacity in the UK.

E.ON UK and RWE npower have formed a 50:50 joint venture that will try to secure sites, apply for consent and then build and operate the new nuclear plants. The companies say they are keeping an open mind on technology, and have not indicated a time scheme for their plans. But their financial strength and experience in the operation of nuclear capacity makes them ideal partners, they say.

Their announcement is a further boost for the UK’s plans to develop a new fleet of nuclear power plants following the successful takeover of British Energy by EDF.

“New nuclear build is a key part of RWE npower’s commitment to meet the UK’s energy needs and to reduce carbon dioxide intensity,” said Andrew Duff, CEO of RWE npower. “E.ON is the ideal partner for UK development given that our businesses have complementary strengths and capabilities, and a successful track record in nuclear power.”

E.On and RWE have stakes in 20 nuclear power stations around the world, and also jointly own three nuclear reactors in Germany. In the UK, both companies operate around 10GW of generating capacity and supply around 10% of the country’s electricity.

The new joint venture will be a separate legal entity. “A joint venture approach will allow us to pool our expertise and resources and deliver the efficiencies that are demanded by projects of this scale,” said a RWE npower spokesperson.

Dr Paul Golby, CEO of E.ON UK, said: “The UK has to replace a third of its generating capacity in the next 15 years in a way that ensures security of supply, reduces carbon emissions and keeps energy as affordable as possible.

“The only way we can achieve this is to have a diverse energy mix, and new nuclear power, alongside cleaner fossil fuels, renewables and energy efficiency, will be vital going forward.”

EDF is planning to construct four EPR reactors in the UK, and wants to bring the first one on-line by 2017. It is considered to be the frontrunner in the new build programme due to its ownership of British Energy and thus some of the best sites for new development.

RWE and E.ON are planning to select the technology for their planned projects once sites have been identified and using a “thorough assessment of the technical and commercial merits”. The UK’s Nuclear Decommissioning Authority (NDA) has already started the process of site sales.

Other companies planning to participate in the UK’s nuclear power revival include French engineering firm Areva, Rolls-Royce and British construction firm Balfour Beatty.

The UK government announced in early 2008 that it wanted to see the construction of new nuclear power plants in order to secure low-carbon baseload capacity for the future. It is expecting all costs relating to the new fleet to be borne by the private sector.

The UK currently has 19 operating reactors at ten power stations, which provide approximately 20% of electricity in the UK. These are all due to be closed between 2008 and 2035.


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