Koreans near investment in new Cumbrian nuclear plant
September 11, 2016
Koreans near investment in new Cumbrian nuclear plant
Headquarters of South Korean group Kepco, which is seeking to join a consortium to build a nuclear plant in the UK
edited by kcontents
Jim Pickard and Andrew Ward in London
A South Korean energy group is closing in on a multibillion investment in a new nuclear power station near Sellafield in the latest sign of Asian interest in Britain’s energy industry.
Korea Electric Power Corporation (Kepco) is in talks about joining the NuGen consortium planning a £10bn plant at Moorside on the Cumbrian coast alongside existing owners Toshiba of Japan and Engie of France.
The deal, if it goes ahead, would add momentum to Moorside at a time when the rival Hinkley Point nuclear power project in Somerset has been thrown into doubt by concerns about its high cost and the role of Chinese investors in the scheme.
Theresa May, prime minister, is expected to decide this month whether to go ahead with Hinkley, led by EDF of France with Chinese backing, after ordering a review of the £18bn project.
NuGen sees the uncertainty as a chance to leapfrog Hinkley in the race to build the first new nuclear reactor in the UK for more than two decades. However, it is still years behind EDF in securing financing and regulatory approval for its project.
For Kepco, an investment in Moorside would be a chance to gain a foothold in the UK as it builds its presence in the global nuclear industry.
The Cumbrian plant — designed to provide power for 6m homes — would be supplied with reactors by Westinghouse, the US subsidiary of Toshiba. But Kepco sees the UK as a potential future market for its own technology.
South Korea has set a goal to become the world’s third-largest exporter of nuclear reactors by 2030 and has already won a $20bn contract in Abu Dhabi. Tom Samson, chief executive of NuGen, is former chief operating officer of the Abu Dhabi company, Emirates Nuclear Energy Corporation, which struck that deal.
Kepco is not without controversy, having been rocked by a domestic safety scandal three years ago. The country’s atomic watchdog said safety certificates for thousands of components procured by Korean reactors over the previous nine years had been forged. An ally of Kepco said the scandal was behind it and the group was now seen as “a first division player” in nuclear power.
The group, 51 per cent owned by the South Korean government, first entered talks with NuGen three years ago, but no deal was reached. Four people with knowledge of the situation said talks had since resumed and made progress over a potential equity stake in NuGen as well as a possible role in construction.
NuGen declined to comment on Kepco but said it had a “universe of options for financing” and was talking to a variety of potential investors and contractors. Kepco could not be immediately reached for comment.
The UK government has put nuclear power at the heart of its energy policy, with a target for 14GW of generating capacity from new reactors by 2035. However, its refusal to inject public money has left ministers dependent on foreign investors to finance the programme.
As well as Hinkley and Moorside, Hitachi of Japan also has plans for reactors at Wylfa in Anglesey and Oldbury-on-Severn in Gloucestershire. EDF and its Chinese state-backed partner CGN are planning further reactors at Sizewell in Suffolk and Bradwell in Essex.
The latter project has been the focus of close scrutiny from Downing Street since Mrs May became prime minister because Bradwell would involve Chinese rather than French reactor technology.
New nuclear power stations are seen as crucial to UK energy security in the coming decades as dirty coal-fired power stations and old nuclear reactors are phased out. But critics say nuclear is too expensive and believe a mix of renewables and natural gas could keep the lights on at a lower cost while still reducing carbon emissions.
http://www.ft.com/cms/s/0/573d713e-7833-11e6-a0c6-39e2633162d5.html#axzz4K0PZxRX5
kcontents
