Caution is the watchword for Nu Generation, the Joint Venture which plans to build new reactors near Sellafield in West Cumbria, writes Penny Hitchin.
The multi-national JV, made up of Iberdrola, GDF Suez and SSE, is adopting a long-haul approach to development as it works towards a decision as to whether to build new reactors on land it has acquired near Sellafield in West Cumbria. It is looking to make its investment decision in 2015, with electricity generation coming on stream in 2023 at the earliest.
The JV is making a virtue out of necessity, as it failed to acquire sites that have the potential to be generating earlier. The team dropped out of the first round of auctions of land potentially suitable for new build at Bradwell, Oldury and Wylfa by the NDA in spring 2009. The combined total of £387 bid by E.On, RWE and EDF for the three sites proved too much for the partnership. E.On and RWE have now formed the Horizon Nuclear JV, which is moving ahead with plans for new build at Wylfa, where generation could start as by and Oldbury. EDF, by virtue of its acquisition of British Energy in 2008, is out in front with plans for new reactors at Hinkley Point.
The Iberdrola/GDF Suez/SSSE (Scottish & Southern Electricity) team was thus left as the main (and very likely the only) bidder for land at Sellafield, which will not have grid connectivity until 2023. In February 2009, GDF Suez (37.5%), Iberdrola (37.5%) and Scottish and Southern Energy (25%) entered a partnership to participate in the development of new nuclear power stations in the UK. In October 2009 the team secured an option to purchase land at Sellafield for a total of £70m. The option must be taken up by 2015. The JV was established in 2010, taking the name NuGeneration (NuGen).
At a presentation in West Cumbria on 1 March, Lynn Wilson, NuGen’s Head of Cumbria Liaison, ran through developments in the national area where government is acting to clear the way ahead for new build, (GDA, justification, planning reform etc) but had little in the way of news for the audience.
“We’ve had a tremendous amount of support from the Stakeholder Group”, she said. In fact, NuGen is indebted to RWE for ensuring strong public support for the Sellafield site, When the German utility delivered a masterclass in how not to approach public engagement over its proposed new build developments nearby. Three sites in West Cumbria were submitted into the new build Strategic Siting Assessment in 2009. These included two greenfield sites at Kirksanton and Braystones which RWE had hastily acquired in 2008 when it wanted to ensure it had a fallback position for new build if it failed to buy land at any of the established nuclear sites. The secrecy surrounding RWE’s acquisitions, and their poor management of public relations around these purchases, united West Cumbria in backing Sellafield as the suitable Cumbrian site for new build.
In recent months the JV has announced its name – NuGeneration - and appointments of Olivier Carret as Chief Operating Director, Alfio Vidal as Chief Nuclear Director and Gavin Brydon as Chief Financial Officer. It has also opened an office in West Cumbria. During 2011 it says it will be building its UK team; carrying out engagement and consultation; reactor evaluation; environmental evaluation and site characterisation.
The Sellafield site is approximately 200 hectares of which half will be selected for the nuclear power station. The land is arguably the best characterised in the UK, as during its heyday, former Sellafield owners BNFL, were keen to build new reactors on the site and carried out a lot of preliminary work including site characterisation.
NuGen says it is ‘technology neutral’ and will await the completion of phase 4 of the joint regulator’s Generic Design Assessment before taking a decision. The NuGen timeline indicates that by the end of 2013, the company will have chosen between Areva’s EPR and Westinghouse AP1000. It plans total UK nuclear development of 3.6GW, which would likely be three AP1000s or two EPRs.
A suppliers’ day will be held in Cumbria later this year, but no contracts are likely to be awarded for several years. Both Iberdrola and GDF Suez have large engineering subsidiaries which would be well-placed to win work.
The big decision whether or not to go ahead with the project will be taken in 2015. At that stage the parent bodies and their shareholders will consider if the project looks viable and whether to make the money (estimated 5bn Euros per reactor), available.
The expectation is that any new power station would be commissioned around 2023. NuGen says that up to 5000 jobs would be created at the peak of construction, with 700 new permanent operational jobs.
Iberdrola and GDF Suez are looking worldwide for power projects. In January 2011 they withdrew from a multi-billion dollar nuclear project to build two additional reactors at Cernavoda in Romania. The companies, had been partners with SN Nuclearelectrica for the development of units 3 and 4 of the nuclear plant since 2008. "Economic and market-related uncertainties surrounding this project, related for the most part to the present financial crisis, are not reconcilable now with the capital requirements of a new nuclear power project," the groups said in a joint statement.
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