Today, energy giants RWE and E.ON announced that they plan to sell their nuclear joint venture Horizon. They had planned to develop new nuclear sites in Gloucestershire and Wales, but now aren’t willing to go ahead with the investment.
There are a number of factors to the decision apparently. Both companies took a hit when Germany elected to close its nuclear plants after the Fukishima disaster last year. Both have other opportunities in which they can invest – in fact, the statement by E.ON UK CEO Tony Cocker stated that they intend 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.”
At a time when capital is at a premium, nuclear is too much upfront cost and too much liability in the long run for companies that have other possibilities.
Nuclear was at the heart of the government’s energy plans for the future and this decision is a massive blow. The decision was described today by Charles Hendry as “disappointing” – something of an understatement given government policy…
Many people won’t be surprised that nuclear isn’t turning out to be the panacea to this country’s energy challenges, and I include myself in that number. The question is now whether the government will carry on regardless even when the companies they need to build them can no longer justify the investment.