Scottish and Southern Energy (SSE) has announced that it is pulling out of a deal to develop a new nuclear power station. The energy company is selling its 25% stake in NuGeneration Ltd (NuGen), which it set up with two other companies, GDF Suez and Iberdrola. Those two companies have since announced that they will be taking up the option to buy SSE's stake.
NuGen has an option to purchase land for the development of a new nuclear power station near Sellafield, in the UK. SSE, which has never operated in the nuclear sector, said it wanted to focus on renewable green energy. A statement released by the Perth-based company, which trades as Scottish Hydro, said it had concluded that, for the time being, its resources were better deployed on business activities and technologies where it has the greatest knowledge and experience. In an interview with the BBC, Alistair Phillips-Davies, generation and supply director of SSE, said: "We made it clear from the start of our involvement in NuGen that for SSE our core investment in generation should be in renewable energy.
"At the same time, it made sense to be part of NuGen to help establish whether some participation in new nuclear power stations would be the right thing for SSE, given we have no experience of ownership or operations in the nuclear sector.
"We have always adopted a cautious approach to the financial and other issues associated with nuclear power development. NuGen will have to make a multi-billion pound investment decision around 2015, but even getting to the point of that decision will absorb, from now on, significant financial and management resources from everyone in the joint venture."
Iberdrola and Gdf-Suez have reaffirmed their commitment to the NuGen consortium's plan to to build a new nuclear power plant alongside the existing Sellafield facility. Regarding the 250 hectare plot of land available to NuGen - an option to purchase this was obtained in 2009 for £19.5 million ($30.1 million) and it has been officially sanctioned by the UK government as suitable for new build in a national policy statement. The 25% of the project company held by SSE is to be taken up equally by Iberdrola and GdF-Suez, leaving NuGen as a 50-50 partnership between the two.
NuGen was officially founded in 2010, after the three companies had co-operated to purchase an option on land alongside the Sellafield fuel cycle centre in West Cumbria. The plan is to build a nuclear power plant with capacity of up to 3.6 GWe, but the final technology and investment decision would not come until 2015 and operation around 2023.
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