Horizon scanning

04 May 2012

Realistic potential players are being linked to Horizon Nuclear Power, with US utility Exelon the latest to be named in the media. A wide range of firms can be expected to show interest in the UK new nuclear project company.

An article in The Times today said that America's largest nuclear operator had been approached by a consortium of Toshiba and China's State Nuclear Power Technology Corporation, which is a key player in mass deployment of AP1000 technology in the country. Exelon did not confirm or deny the report, but the potential alliance would stand as the second highly credible interest in Horizon.

Russian state nuclear company Rosatom has already been open in saying it is interested in entering the UK power market via Horizon, stressing in the process that it would provide assurances to the public about the safety of any proposals that could emerge.

The project company Horizon holds two approved sites for nuclear build - Wylfa and Oldbury - both with highly supportive local populations. It had been in talks with Areva and Westinghouse to determine which reactor design to build to reach its goal of up to 6600 MWe of new nuclear generating capacity. Horizon had been on the verge of making its technology decision when joint owners RWE and EOn announced their intention to sell, citing pressures on their businesses. The biggest of these pressures, of course, was the overnight shutdown of eight large reactors in the German reaction to the Fukushima accident.

The British government remains a strong supporter of nuclear power, having systematically worked through an array of policy and legislative changes to facilitate new nuclear for its economic, environmental and energy security benefits. It has often said that it wants the UK to become the best market for nuclear investment in the world.

The single market of the European Union is home to many large utilities that have recently shown interest in regional nuclear investments. EDF is already involved in its own UK new build plan, as are GDF-Suez and Iberdrola through their NuGeneration joint venture. Other European firms that were previously been visible in UK new build would be obvious potential candidates - Vattenfall and Endesa - as would other utilities that have had nuclear build plans frustrated in home markets - Fortum, Enel, Alpiq, Axpo and Essent.

Lastly there are other national nuclear interests, such as the state nuclear industry of South Korea, which like that of Russia posesses full capabilities in the entire nuclear supply chain. Sovereign wealth funds from Middle-Eastern nations may also come forward as potential equity partners, while there has been a recent trend in purchases of utility infrastructure by east Asian investors. One example of this was EDF's €6.9 billion ($9.0 billion) sale of its electricity distribution business in south east England to Hong Kong-based Cheung Kong group.

An important factor in the future of the project will be the status of various reactor designs in the UK regulatory system. Only the Areva EPR and Westinghouse AP1000 are available for near-term construction, although a second wave of licensing could include a Rosatom's VVER-1000 design, South Korea's APR-1400 as well as either the ESBWR or ABWR from GE-Hitachi.

Researched and written
by World Nuclear News

Filed under: New build, United Kingdom