“Our decision was down to the financial firepower of the company,” said Tony Cocker, CEO of E.ON UK. “Nuclear is an extremely long–term investment.”
Both RWE and E.ON are German–owned and were damaged by the decision of the German government to desert nuclear power, as well as lower recent profit margins in gas– and coal–powered electricity generation.
The companies are seeking to sell the Horizon project, which had aimed to invest about £20bn in nuclear reactors at Wylfa on Anglesey, north Wales, and Oldbury in Gloucestershire. Despite E.ON’s pull–out, Cocker told MPs the UK had the best policy environment for investment in new nuclear power in Europe: “But investors will need greater patience than us.”
Energy minister Charles Hendry was also questioned by MPs on the faltering of the government’s plan to have eight new nuclear power stations built within the next decade. “I remain very positive,” he said. Ministers are currently negotiating with companies over how much energy customers will be charged to pay for investment in new, low–carbon generation, including nuclear and wind power. “We will not sign up for anything we think is bad for bill payers. We believe nuclear should be the lowest–cost, large–scale energy source, and the price will reflect that.”
Hendry told MPs that at least £100bn was needed to build replacements for the many old coal, gas and nuclear plants that will close in the next few years. He said the government’s forthcoming energy bill aimed to ensure energy security, while meeting greenhouse gas emissions and getting the best deal for the consumer. Being exposed to events in other countries, such as the nuclear disaster at Fukushima and the election of nuclear–power–sceptic François Hollande in France, was “inevitable”, said Hendry. “If we want to see nuclear power as part of the energy mix, that’s a challenge we have to take on.”