Hitachi to buy Horizon nuclear projects

Hitachi has won the race to purchase the UK’s Horizon nuclear venture, after fending off competition from Westinghouse Electric, according to reports circulating yesterday.

News agency Bloomberg reported that the Japanese conglomerate should complete a deal to buy the proposed nuclear reactor development sites at Wylfa in Anglesey and Oldbury in Gloucestershire within the next few days, citing two sources close to the negotiations.

The sites were put up for sale by German utilities RWE and E.ON earlier this year following Germany’s decision to close all its nuclear reactors in the wake of last year’s Fukushima disaster in Japan.

A successful sale would be a shot in the arm for the UK’s plans to develop up to 16GW of new nuclear capacity by 2025, which had looked in jeopardy after Areva and China Guangdong Nuclear Power Group pulled out of plans to bid for Horizon and SSE and Siemens exited the sector altogether.

The moves left the country’s nuclear future dependent on just a handful of firms, such as EDF, Iberdrola, and GDF Suez, and raised questions over whether a lack of competition in the market would force the government to approve higher than anticipated subsidies for nuclear energy.

EDF owns and runs eight of the UK’s 10 existing nuclear power stations and is looking to build a new plant at Hinkley Point in Somerset. Meanwhile, the NuGen consortium owned by Iberdrola and GDF Suez is weighing up whether to build new reactors in Cumbria, but is unlikely to make a decision before 2015 - and may face opposition from local councils that have so far failed to decide whether to approve new nuclear waste storage sites.

EDF chief executive Vincent de Rivaz told a select committee hearing on Tuesday that the company had not yet decided whether to go ahead with building the first new nuclear power stations in the UK for decades and would need further reassurances on the level of financial support availabel to the energy source before reaching a final decision.

The government intends to provide long-term contracts with a set price for low carbon electricity through the electricity market reform outlined in the forthcoming Energy Bill. EDF is widely thought to be holding out for a support level, or strike price, of between £100 per megawatt hour and £140/MWh - about four times the wholesale price of electricity.

Should the Hitachi sale go through, it could also provide a boost to the company’s joint venture with GE to build a facility turning the UK’s enormous stockpile of nuclear waste into energy.

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