Contractors stunned by nuclear pull-out

30 March 2012

Nuclear contractors are seeking urgent assurances from Government on the future of the UK’s nuclear new build programme, after RWE npower and E.On announced the sale of the £15 billion Horizon joint venture behind two power plant schemes.

The energy firms were expecting to raise £15bn of investment and had acquired land for the plants at Wylfa, on the Island of Anglesey, North Wales and at Oldbury-on-Severn, South Gloucestershire, but made the decision to pull out for strategic reasons and following difficulties in raising finance. Work on the project has been put on hold while another backer is sought.

Balfour Beatty and Laing O’Rourke are currently competing for the main construction contract at Wylfa. One nuclear contractor told Construction Enquirer: “This is obviously very worrying news and we need assurances from the Government that they are committted to nuclear new build ...A lot of contractors have invested a lot of resources following promises about this market which is seen as a major growth area for the next decade.”

He added: “The key issue is which reactor design is chosen by the client and a decision like that takes time and can put procurement timetables back ages.”.

Energy Minister Charles Hendry said: “E.On and RWE’s withdrawal is clearly very disappointing, but the partners have clearly explained that this decision was based on pressures elsewhere in their businesses and not any doubts about the role of nuclear in the UK’s energy future ...The UK’s new nuclear programme is far more than one consortia and there remains considerable interest.

“The UK’s new nuclear programme is far more than one consortia and there remains considerable interest,” he added. “Plans from EDF/Centrica and Nugen are on track and Horizon’s sites offer new players an excellent ready-made opportunity to enter the market.”

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