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Nuclear plants cast into doubt as E.On and RWE pull out of £15bn Horizon deal

Government plans for two nuclear plants were dealt a blow today after RWE npower and E.On announced the sale of the £15 billion Horizon joint venture behind the schemes.

The firms said the decision was made against the backdrop of wider financial constraints, and means delays as alternative investors are sought.

The companies were expecting to raise £15bn of investment and had acquired land at Wylfa, on the Island of Anglesey, North Wales and at Oldbury-on-Severn, South Gloucestershire, as part of a competitive process run by the Nuclear Decommissioning Authority (NDA). 

Both companies have said the move was based on strategic grounds, and that both of Horizon’s projects “remain excellent development options”.

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 UK’s energy future. 

“The UK’s new nuclear programme is far more than one consortia and there remains considerable interest.  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.”

Volker Beckers, chief executive of RWE Npower, said: “We continue to believe that nuclear power has an important role to play in the UK’s future energy mix. We are therefore looking to ensure that work on development, including grid connection, can be taken up quickly by other potential investors.”

Dr Tony Cocker, Chief Executive of E.On UK said: “E.On has decided to focus its investment in the UK on other strategic projects that will allow us to deliver earlier benefit for customers and our company, rather than the very long term and large investment new nuclear power calls for.  Our commitment to the UK remains as strong as ever and as our track record shows, with over £1bn of investment in the last year alone, we will continue to select the right projects in which to invest.

He added:  “We believe that for the right company Horizon remains an attractive project - but sadly, at this time, not for us.”

Horizon Chief Operating Officer Alan Raymant said: “We are grateful for the support and backing of E.On and RWE npower since the company was formed in 2009. This has enabled us to bring our projects forward to an advanced stage.  We are also very pleased to enjoy broad public and political support, in particular from the communities around our sites. This continues to make nuclear new build an attractive proposition in the UK.

“We will now focus on consolidating the progress made and working with our shareholders as they investigate the opportunities for new ownership.

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