Horizon Nuclear Equity for Cash Offer
by J Roberts
Horizon, the consortium planning to build Wylfa B on Anglesey, is considering a cash injection for an equity stake in the project, according to the FT. As Horizon plans to build four of the twelve proposed new nuclear reactors in Britain, three of which would be at Wylfa, the consortium will potentially be responsible for over 30% of new nuclear generating capacity in the UK. So the ability of RWE and E.ON, the two German energy utilities which form Horizon, to overcome recent financial restructuring challenges following the Merkel Government's decision to close all nuclear plants by 2023, will be key to Britain achieving its low carbon and energy security goals. The two companies are currently in the process of completing the generic design assessment (GDA) for the reactor design to be used in the new build programme. A decision will have to be taken whether to go for the Areva EPR model or the Toshiba Westinghouse AP1000 for the new nuclear plants at Wylfa and Oldbury. The novel idea of offering an equity stake in Horizon of up to 25% has been conveyed to both Areva and Westinghouse. It has been reported recently that given the serious financial challenges facing the German utilities, both RWE and E.ON have considered options ranging from a complete pull-out to offering a stake of 25% in return for a cash injection. Such a scenario puts a completely different complexion on the situation, though offering cash in return for an equity stake would not be a make-or-break decision as to which reactor design to select for the new build programme. The two utilities are, however, facing some tough financial decisions, needing to make provision for accelerated plant decommissioning costs following a decision by the German Parliament to close all nuclear stations by 2023. Currently, energy security is high on the UK political agenda and in the last few days the House of Commons Energy and Climate Change Committee produced a report in which it urged greater decisiveness from the UK government over plans for renewing Britain's generating capacity. Let's hope the prospect of a cash injection will add impetus to Horizon's plans for Wylfa B, and equally the equity stake in UK electricity generation is an incentive for both Areva and Toahiba Westinghouse. For more local articles and stories, subscribe to our free Anglesey Newsletter here. It's as easy as 1-2-3! Photo by Christian Ferrari, Italy
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