GMB calls for nationalised Nuclear development authority to build new Nuclear power stations for low carbon electricity.
Big investment in UK energy infrastructure is required and while Centrica decision to pull out of new nuclear is disappointing it is not unexpected says GMB.
GMB, the union for workers in energy and utilities, commented on the announcement by Centrica that they are not going ahead with investment in nuclear new build. See notes to editors below for copy of Centrica statement.
Gary Smith, GMB National Secretary for energy and utilities, said “Big investment in UK energy infrastructure is required and while this decision is disappointing it is not unexpected.
GMB always supported having a UK owned company at the centre of developing new nuclear power. New nuclear power will be crucial to producing low carbon electricity in the UK and for jobs. The lack of UK involvement could mean that the UK misses out on the global nuclear renaissance.
It is essential that government takes steps to reassure industry and the public that they have a coherent strategy for new nuclear power.
Since the state has to step in to guarantee prices for return on investment for electricity suppliers why not go the whole hog and have a fully accountable nationalised delivery body particularly in the nuclear sector.
One obvious way forward is for Government to re-task the Nuclear Decommissioning Authority and re-name it as the Nuclear Development Authority to bring on stream the nuclear power stations we need. We need a nationalised Nuclear Development Authority because in terms of the massive investment needed the fact is British Industry is not match fit to do this as this Centrica decision shows.
We have had set backs around the management of nuclear waste with the rejection of progressing the process which is looking at building a repository at Sellafield. We have also had the Public Accounts Committee criticisms of the management of legacy nuclear waste at Sellafield.
That the UK lacks a coherent plan for nuclear power is being exposed every day that passes.
Much of money paid by UK households to heat their homes will be spent on components that will be built abroad unless there are major changes. The experience in North Sea oil and gas shows that how British engineering industries can be global players. The opportunities in the nuclear industry are similar.”
Contact: Gary Smith, GMB National Secretary 07710 618 909 or 0207 391 6700. GMB Press Office 07921 289 880 or 07974 251 823
Notes to editors
text of release by Centrica 4 February 2013
Centrica announces decision not to participate in UK nuclear new build and launches GBP500 million share repurchase programme
Centrica plc has taken the decision not to participate in the construction of up to four new European Pressurised Nuclear Reactors in the UK.
In 2009, Centrica acquired a 20% interest in EDF Energy's eight operational nuclear power stations in the UK and also took an option for a 20% interest in the construction of new nuclear power stations at Hinkley Point and Sizewell. The acquisition was funded through a GBP2.2 billion Rights Issue, completed in 2008, part of which provided financing for the investment in new nuclear. Having taken the decision not to proceed with the new nuclear investment, the Group will launch a GBP500 million share repurchase programme, to return surplus capital to shareholders, which will be conducted over the next 12 months.
With pre-development expenditure on the project approaching the agreed GBP1 billion cap, Centrica's decision not to proceed follows a detailed appraisal of the project. While there has been progress in a number of key project areas, particularly design and planning, there remains uncertainty about overall project costs and the construction schedule. Centrica's 20% share of the pre-development expenditure will be written off as an exceptional cost in the Group's 2012 results.
Sam Laidlaw, Chief Executive of Centrica, said: "We believe that nuclear generation has a valuable role to play in a balanced UK energy mix. Centrica and EDF continue to enjoy a successful partnership in existing nuclear. However, since our initial investment, 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. In 2012 we invested over GBP2 billion in securing supplies of energy for the UK and where we see attractive returns we will continue to invest in Britain's energy future."
Centrica's 20% interest in the eight existing nuclear power stations in the UK is unaffected by this decision.
The company is due to present its Preliminary Results and will provide an update on strategy and investment plans across the Group on 27 February 2013.
Notes to editors
As part of the 2009 transaction, EDF Energy and Centrica plc formed an 80/20 joint venture to undertake pre-development activities for a nuclear new build programme, with the intention of constructing, operating and decommissioning four European Pressurised Nuclear Reactors.