Centrica pulls out of UK new-build nuclear

  • Nuclear

    Centrica's withdrawal from the Hinkley and Sizewell projects will damage government's nuclear ambitions. Image credit: Topato

Centrica has announced that it will not be going ahead with the construction of new nuclear power stations at Hinkley Point and Sizewell.

The announcement heaps more misery on governmental plans for new-build nuclear in the UK, coming weeks after the announcement of the Nuclear Industry Council and the published nuclear strategy. Centrica says that it reached the decision after a “detailed appraisal of the project.”

Sam Laidlaw, Chief Executive of Centrica, explained why the British energy giant was pulling out: “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 £2 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.”

In 2009, Centrica acquired a 20% stake in EDF’s eight nuclear power stations as well as taking out an option for a 20% interest in the new nuclear stations at Hinkley Point and Sizewell. In order to return surplus capital to shareholders, Centrica will be launching a £500 million share repurchase programme.

Commenting on the news, Angela Knight CBE, Chief Executive of Energy UK, stressed that nuclear remains a vital part of the company's future energy mix, stating: “It is important to emphasise that this news today is a commercial decision made by one company. Other companies are still committed to building new nuclear and the Government framework is in place to make this happen. The Energy Bill going through Parliament at present will give investors the confidence they need to invest in low carbon generation, not just nuclear, and we look forward to its timely passage through Parliament.”

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