Whither nuclear for the UK?

Implications: If the UK is to meet its greenhouse gas targets it is essential to replace and possibly increase its nuclear power station fleet.  As the main owner and operator of the present nuclear stations the position of British Energy (BE) is critical to success. Will the rejection of the EDF takeover slow down progress?

Analysis: The future of nuclear in the UK depends on government support - which there is - and suitable locations.

The UK government initially gave its support to replacement of the existing capacity but recently, Prime Minister Gordon Brown, gave the go ahead to an increase in nuclear capacity.  But the UK government does not build power stations that is for the private sector.

The key problem is sites for the new stations.  If new sites were to be selected the UK planning process could delay the development for years or in the extreme decades!  The solution will be to build on existing nuclear sites and two organisations have them.  The UK government through its legacy ownership of aged Magnox stations and the quoted British Energy which has the rest - particularly the larger sites.

BE has about 10,000 MW of nuclear capacity and about 1900MW coal and is the UK's largest generator.  A number of continental European companies wish to build the new generation of nuclear stations including EDF (France), EON & RWE (Germany) and Iberdrola (Spain).  This puts the UK government in a difficult position as it has a 35% holding in BE arising from a restructuring; using the sale of this holding to non-UK companies would be politically unpopular;  the one company that could come in to give a UK flavour to an essentially non UK takeover is Centrica one of the last UK owned energy companies left.

To date only EDF has made an firm offer now perhaps the serious auction will start.  The stock market in the UK seems to think so BE went up nearly 2% today (10/6/08). 

One thing is certain.  This rejection will not halt the UK's nuclear progress.