Toshiba boosts UK nuclear plans with NuGen deal

LONDON Tue Jan 14, 2014 6:47pm GMT

A logo of Toshiba Corp is seen atop of the company headquarters in Tokyo January 31, 2013. REUTERS/Shohei Miyano

A logo of Toshiba Corp is seen atop of the company headquarters in Tokyo January 31, 2013.

Credit: Reuters/Shohei Miyano

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LONDON (Reuters) - Toshiba has agreed to buy 60 percent of the NuGen UK nuclear joint venture between GDF Suez and Spain's Iberdrola for 102 million pounds, boosting Britain's plans to replace its ageing nuclear fleet.

Toshiba's Westinghouse unit will provide three of its AP1000 nuclear reactors, with a combined capacity of 3,400 megawatts (MW), for construction on the NuGen Moorside nuclear site in northern England, the companies involved said on Tuesday.

The first reactor is due to come online in 2024, they added.

Toshiba's involvement marks the entry of the second Japanese engineering heavyweight into Britain's drive to build new nuclear plants after Hitachi bought a nuclear new build project in 2012.

Britain is one of a few European nations to build new nuclear plants in the wake of Japan's 2011 Fukushima disaster as it seeks to replace its existing reactors to help cut carbon emissions in its electricity sector.

Britain's push for new nuclear plants stands in sharp contrast with nations such as Germany and Austria which pledged after the events at Fukushima to completely phase out the use of nuclear power.

"The announcement by NuGen and Toshiba and Westinghouse shows that the UK is an attractive destination for investors in new nuclear," UK Energy Minister Michael Fallon said in a statement.

Under the preliminary deal announced on Tuesday, Toshiba will pay 85 million pounds ($140 million) for Spanish Iberdrola's 50 percent stake in the joint venture and 17 million pounds for 10 percent of GDF Suez' stake. The French company will retain a 40 percent share of the group.

Westinghouse said the reactor construction programme will create thousands of jobs over the next decade and a large proportion of supply chain contracts will go to UK companies.

Westinghouse Springfields, a nuclear fuel manufacturing company based in north west England, will produce the fuel to be used in Westinghouse's reactors.

British workers' union GMB welcomed the announcement for offering benefits to the local community.

"This project supports the UK government's policy for new nuclear development - the timetable to operation, financial robustness, proven technology, and the project's overall benefit to the UK economy," said Jeffrey Benjamin, Westinghouse Senior Vice President of nuclear power plants.

Westinghouse's AP1000 reactors, some of which are under construction in China, require regulator approval before they can be built in Britain.

The company expects to obtain Generic Design Assessment (GDA) approval in mid-2016, Westinghouse's AP1000 Programme Director, Simon Marshall, said.

France's EDF and Areva form a third group planning to build new nuclear plants in Britain and their Hinkley Point C project in southern England is expected to be the first new nuclear station to start operating in 2023.

The British government announced in October the preliminary terms of a deal to guarantee operator EDF a minimum price for electricity to be produced from its Hinkley Point C project.

Similar deals are due to be negotiated for the Horizon and NuGen projects. ($1 = 0.6075 British pounds)

(Editing by Keiron Henderson)

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