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Boost for nuclear power as Hitachi signs £700m deal
12:08pm Wednesday 31st October 2012 in Business
THE UK’s nuclear power plans have been boosted after Hitachi signed a £700m deal giving it rights to build a new generation of plants.
The Japanese firm is to buy Horizon Nuclear Power, which was intending to build reactors on sites at Anglesey, and Oldbury, near Bristol.
Hitachi is buying Horizon from Germany’s E.On and RWE, which are withdrawing from the UK nuclear market.
Prime Minister David Cameron said it was a step in the right direction.
“This is a decades-long, multi-billion-pound vote of confidence in the UK, that will contribute vital new infrastructure to power our economy,” he said.
“It will support up to 12,000 jobs during construction and thousands more permanent highlyskilled roles once the new power plants are operational, as well as stimulating exciting new industrial investments in the UK’s nuclear supply chain.”
UK engineering companies Babcock International and Rolls- Royce have signed preliminary contracts to join the Hitachi deal, which the Japanese company said should be completed by the end of next month.
Companies involved in the nuclear industry have expressed caution over entering the UK market, because of the huge capital costs involved. They want some certainty over how much they might be paid for the electricity generated by their plants.
Last week, the chief executive of EDF, Vincent de Rivaz, whose company runs Hartlepool nuclear power plant, told MPs that his company needed safeguards from the Government that the finances of future nuclear deals would be fair.
The company is planning a major investment to extend the operation of the Hartlepool facility until 2026.
Delays over decision-making and financing have led to doubts that new power capacity will come on stream before existing plants go offline. A so-called energy gap is likely to lead to rising prices and more gas imports.
Earlier this month, the energy regulator Ofgem warned that the UK risks running out of energy generating capacity in the winter of 2015-16.