Push For Russian Nuclear Reactors in UK

LONDON--The U.K.'s plans for a new fleet of atomic power stations received a boost Thursday as some of the biggest names in European nuclear energy and engineering teamed to consider the feasibility of deploying Russian-designed reactors in Britain.

Finland's Fortum Oyj (FUM1V.HE), Russian state-owned Rosatom and British engineering giant Rolls-Royce PLC (RR.LN) said they will jointly investigate the possibility of deploying Rosatom's VVER-type reactors for the U.K.'s new-build nuclear program. To facilitate this, Rosatom and the U.K. government signed a cooperation agreement that will allow the company to familiarize itself with the U.K. market and forge links with British firms.

Although no investment decision has yet been made by the three companies, Matti Ruotsala, Fortum's executive vice president, described the U.K. as "a really interesting opportunity."

Britain needs new nuclear plants to curb carbon emissions and take over from power plants that are reaching the end of their lifespan, but the government's ambitions for a new fleet have been beset by political squabbles, escalating costs and pricing disagreements.

Earlier in 2013 the U.K.'s largest utility, Centrica PLC (CNA.LN), withdrew from a project to build four new reactors citing soaring costs. Electricite de France SA (EDF.FR) is locked in negotiations over the "strike price," without which there is no certainty on how much revenue companies will be able to generate. German utilities RWE AG (RWE.XE) and E.ON SE (EOAN.XE) withdrew from another program, selling out to Japanese industrial electronics giant Hitachi Ltd. (6501.TO), while a final investment decision on a new-build collaboration between France's GDF Suez (GSZ.FR) and Spain's Iberdrola SA (IBE.MC) is two years off.

Under the three-way company agreement announced Thursday, Fortum, Rosatom and Rolls-Royce will begin preparatory work with a view to getting the VVER reactor into the U.K.'s Generic Design Assessment, or GDA, program, which is the first step in a wider approval process for new nuclear reactors. Regulators the Office for Nuclear Regulation and the Environment Agency use the GDA process to assess the safety, security and environmental implications of new reactor designs.

Hitachi's Advanced Boiling Water Reactor design is already subject to a GDA.

The U.K. Business and Energy Minister Michael Fallon said: "Inward investment into our energy sector will depend upon all reactor technologies meeting the stringent and independent regulatory standards required in the U.K. and European Union."

-Selina Williams contributed to this item.

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