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Centrica has pulled out of plans to build the first in a new wave of UK nuclear power plants.
The UK government’s energy plans have been put into doubt following a decision by energy giant Centrica to pull out of plans to build the first in a new wave of nuclear power plants.
Arguing that the time-scale and budget for the project was uncertain the company said that “the anticipated project costs in new nuclear have increased and the construction timetable has extended by a number of years”.
“These factors, in particular the lengthening time frame for a return on the capital invested in a project of this scale, have led us to conclude that participation is not right for Centrica and our shareholders”.
The decision means that Centrica will return £500m of surplus capital to investors that it had raised to help secure a 20% interest in the nuclear building project, which the firm had spent £200m developing since 2009.
Following the announcement Centrica’s share price on the London exchange fell by 1.12%, -3.90 point, to 345.1. The company insist that they will continue to invest in the UK energy sector, with chief executive Sam Laidlaw saying that in 2012 the company had “invested over £2bn securing supplies of energy for the UK and where we see attractive returns we will continue to invest in Britain’s energy future”.
Led by EDF the plans aim to build nuclear reactors at Sizewell in Suffolk and Hinkley Point in Somerset. It is expected that China’s Guandong Nuclear Power Group will take over Centrica’s role in the project.
Raising concern over EDF’s plans Centrica’s finance director, Nick Luff, argued that “uncertainty about overall project costs and the construction schedule”.
Refuting Centrica’s position EDF’s CEO, Vincent de Rivaz, said the company had provided the UK’s Department for Energy and Climate Change with “well understood and stable” costs and timescales.
