UK nuclear plans suffer setback as Areva led consortium walks out

A Franco-Chinese consortium has opted out of proposed a nuclear plant project in  Britain in a blow to the government's hopes of ushering in a nuclear power revival.

The French engineering company Areva and China Guangdong Nuclear Power Group failed to meet the bid deadline for the Horizon nuclear joint venture people, the Financial Times quoted sources familiar with the matter yesterday. The development narrows the field of would-be investors in a programme with a capital outlay expected to run into billions of pounds.

The withdrawal leaves two consortiums, led by Japan's Hitachi and Westinghouse Electric, to compete for Horizon, which owns sites to build nuclear reactors in Wylfa, Anglesey and Oldbury in Gloucestershire. Horizon was put up for sale in March when its owners, RWE and Eon of Germany, abandoned plans for building new nuclear plants in the UK. The development follows the German government's decision to phase out nuclear power following the Fukushima disaster last year.

Westinghouse, owned by Japan's Toshiba, had been in talks with China's State Nuclear Power Technology Corp about joining its consortium, however, the US-based electricity company put in its bid without the Beijing-backed group.

Chancellor George Osborne, has been trying hard to attract Chinese investment in transport, utility and energy schemes in the UK and in January he visited China, where he met key investors and businessmen, including Lou Jiwei, chairman of the China Investment Corporation, the sovereign wealth fund that recently acquired a 9 per cent stake in Thames Water.

A decision is expected within weeks, but in the event of failure of either parties due  financial or other challenges, that would clear the field for EDF as the main developer committed to building new nuclear reactors in the UK. The French state company which already owns and operates eight of the UK's 10 existing nuclear power stations, is to take a final call on investments in a new reactor at Hinkley Point in Somerset by the end of the year.

EDF has also been discussing with Chinese state corporations over funding of new reactors in the UK, even as UK government officials visited China to discuss energy collaboration in the UK.

The other company eyeing new nuclear in the UK is NuGen owned by Spain's Iberdrola and France's GDF Suez, which has plans for new reactors in Cumbria and says it would  make a decision by 2015.