Centrica will not be taking part in the construction of new nuclear reactors in the UK as part of the nation’s nuclear new-build programme.
The firm, which owns British Gas, made the announcement today and said the reason for its withdrawal is due to increasing costs and construction delays.
It had the option of taking a 20% stake in four new reactors in a partnership with EDF at Hinkely Point in Somerset and Sizewell in Suffolk. Centrica’s unexpected exit means no major UK firm is involved in plans for new nuclear reactors in the country although it retains its 20% stake in eight existing nuclear power stations.
Sam Laidlaw, Chief Executive of Centrica said: “Centrica and EDF continue to enjoy a successful partnership in existing nuclear. However, since our initial investment, the anticipated project costs in new nuclear have increased and the construction timetable has extended by a number of years. These factors, in particular the lengthening time frame for a return on the capital invested in a project of this scale, have led us to conclude that participation is not right for Centrica and our shareholders.”
EDF Energy said it “respects” Centrica’s decision and “understands the profile and scale of this investment may not meet Centrica’s shareholders’ current expectations and priorities”. CEO Vincent de Rivaz added the company is working with the Government to agree a price for the electricity at Hinkley Point C “which will be fair and balanced for UK consumers and investors”.
A spokesperson from DECC said: “We are determined to make the UK a leading global destination for investment in new nuclear, which will play a key role in our future energy mix. We welcome EDF Energy’s continued commitment and determination to take forward the Hinkley Point C project. The decision by Centrica reflects the company’s investment priorities and is not a reflection on UK government policy.”
Environmental group Friends of the Earth said the country’s “nuclear dream” is becoming an “economic nightmare”. Head of Campaigns Andrew Pendleton said: “Centrica’s decision to pull out of building new reactors is further evidence of the escalating cost of this form of energy. Billions of pounds of taxpayers’ money has already been spent trying to deal with the nuclear industry’s toxic legacy and billions more will be wasted if we press ahead with new nuclear power plants.
“Ministers must focus on the real solutions to the energy challenges we face: slashing energy waste and developing the enormous potential for safe, clean British energy from the wind, waves and sun.”
The news comes on the same day as the Public Accounts Committee published a new report stating the cost of decommissioning the Sellafield nuclear site has reached £67.5 billion so far, with around £1.6 billion of taxpayers’ money being spent every year.