China may soon have a major stake in one of the UK’s biggest nuclear projects after two Chinese companies teamed up with Western enterprises to bid for a joint venture that plans a US$24 billion investment, according to industry sources.
China has been expanding investment in Europe by buying stakes in firms such as Britain’s Thames Water and Portuguese utility EDP.
The British government wants to see new nuclear plants built, but cost overruns in the wake of the Fukushima nuclear disaster and the slowing global economy have made it increasingly difficult for Western developers to find the billions of dollars needed for these projects.
The Horizon nuclear project was put up for sale in March by German utilities RWE and E.ON, who have come under pressure from Germany’s decision to phase out all nuclear power in the aftermath of the Fukushima accident.
The Gloucester-based joint venture owns two nuclear sites in Britain, at Oldbury near Bristol, and Wylfa on Anglesey, where it plans to build six gigawatts of new nuclear capacity with an investment of 15 billion pounds (US$24 billion).
Japanese bank Nomura, which is acting for RWE and E.ON in the sales process, imposed a deadline last Friday for offers, which are expected to have come in at several hundred million pounds.
Nuclear reactor builders Areva and Toshiba-owned Westinghouse have picked separate Chinese nuclear companies to help bid for Horizon.
“Areva and Westinghouse have both assembled consortiums of their own,” said one source, who is familiar with the bidding process but who refused to be identified. Two other sources in the banking and consultancy sectors confirmed the bidders.
If successful in either of their bids, reactor technology developers Areva and Westinghouse would probably sell their stakes in the project to an experienced nuclear plant operator whilst ensuring their respective designs are used, experts said.
Westinghouse has teamed up with China’s State Nuclear Power Technology Corp, expanding their existing collaboration in China, to make a bid, while Areva has linked up with China Guangdong Nuclear Power Holding Co to put forward a separate offer, the sources said.
“The Chinese may see Horizon as a way of acquiring a relatively cheap option on developing nuclear capacity and expertise in Europe if the conditions are favorable,” David Stokes, a director at consultancy Timera Energy, said.
