Market News

 February 17, 2012
UK to ink nuclear cooperation deal with France

 David Cameron will today sign a landmark deal to strengthen nuclear power cooperation with France that could provide a major boost to the UK's proposed fleet of new reactors.

The government claimed the agreement will lead to a raft of commercial deals, worth more than £500m, in the sector and generate 1,500 UK jobs as the country looks to build eight new plants by 2025 to replace aging fossil fuel stations.

But Cameron said today's joint declaration could be "just the beginning" of a total investment of up to £60bn that could create 30,000 jobs.

The expected deals include Rolls-Royce signing a £400m deal with the French energy company Areva to supply services to the first next-generation nuclear power plant, known as EPR, at Hinkley Point in Somerset, with a commitment for future EPR sites in the UK.

Rolls-Royce is also set to build a dedicated factory in Rotherham, and the contract should guarantee 1,200 jobs at Rolls-Royce and in its supply chain.

Meanwhile, French energy giant EDF will conclude a £100m agreement with Keir/BAM Nuttall for preliminary works at the £10bn Hinkley Point project and invest in a £15m training campus in nearby Bridgwater.

"The deals signed today will create more than 1,500 jobs in the UK, but they are just the beginning," said Cameron ahead of the conference.

"I want the vast majority of the content of our new nuclear plants to be constructed, manufactured and engineered by British companies. And we will choose the partners and technologies to maximise the economic benefits to the UK. Today marks an important first step towards that -- a good deal for Britain and a good deal for France."

UK and French public and private sector bodies in the civil nuclear power industry will also work more closely on education and training, research and development, as well as security, the government said.

However, anti-nuclear campaigners pointed out that the new plants may not be able to cope with predicted temperature volatility over the coming decade.

In the summers of 2003 and 2009, France had to import electricity from the UK after soaring temperatures forced the shut-down of a number of its reactors.

France has also been forced to buy about 5GW of solar power -- the equivalent of about four nuclear power plants -- from Germany over the past winter.

After the Fukushima disaster, Germany decided to shut down all its reactors by 2022 and Switzerland is set to follow suit, prompting Siemens to scale back its nuclear business.

UK utility SSE has also exited the nuclear sector after selling its 25 per cent stake in NuGeneration for £5.75m to GDF Suez and Iberdrola yesterday.

However, the UK is not alone in looking to build new nuclear plants; last week, the US gave the go-ahead for its first new reactor in 30 years.