Energy firms abandon nuclear plans
The Government's plans for a nuclear-power renaissance are in disarray after two of the "big six" energy giants pulled out of a venture to build new reactors.
The decision by RWE npower and E.ON not to go ahead with developing nuclear power plants at Wylfa in North Wales and Oldbury-on-Severn, Gloucestershire, threatened the creation of thousands of jobs and undermined UK energy policy, it was warned.
The two German-owned companies said they were looking for a new owner for their venture Horizon Nuclear Power in the light of financial constraints.
The venture was hit by the global economic crisis and Germany's decision to phase out nuclear power in response to the disaster at Fukushima following the Japanese earthquake and tsunami last year, as well as the significant costs of the project.
But the two firms insisted their joint venture company Horizon Nuclear Power's projects were viable for another investor to develop nuclear sites. They also confirmed they were committed to investing in energy schemes in the UK, including renewables and gas, which have shorter payback times on capital investment than nuclear build.
The latest withdrawal from nuclear new-build comes after Scottish and Southern Energy announced last year that it was pulling out of the NuGeneration joint venture to build a new plant at a site near Sellafield, West Cumbria.
The Horizon project at Wylfa, on Anglesey, is one of the most advanced of the plans for a fleet of new reactors which the Government believes is necessary to cut carbon emissions while keeping the lights on in the UK. The £10-£15 billion project would have created 5,000 construction jobs.
Unions reacted with dismay to the news that E.ON and RWE npower were not pushing ahead with their plans. Gary Smith, of the GMB union, said: "This is a devastating blow which leaves the UK Government energy strategy in tatters."
But environmental groups seized on the news as evidence that nuclear power, which provides just under a fifth of UK electricity supplies, was not a financially-viable option for the country's future energy mix.
They called for the Government to back renewables, which they said had the potential to create thousands of jobs, supply households and businesses with clean, safe and affordable electricity, and tackle climate change.