Iberdrola SA said Monday it has agreed to sell its 50% stake in U.K.
nuclear consortium NuGeneration Ltd. to Toshiba Corp. unit Westinghouse
Electric Co for GBP85 million ($139 million.)
The deal resurrects a key project to build a new nuclear
power station in England and boosts the Japanese company's ambitions to
expand in Europe.
NuGen is one of three big consortia aiming to build nuclear
power plants in the U.K., but the least advanced. Momentum for the
project foundered in the past year after Iberdrola, the Spanish power
giant, said it was looking to sell its stake as it restructured its
business and cut debts.
The current plan envisions constructing a 3.6-gigawatts
nuclear power station in West Cumbria in northern England. It is an
important part of a U.K. government effort focused on new nuclear power
to help secure electricity supplies as old coal and nuclear plants are
shuttered over the next decade. The government wants low-carbon nuclear
energy to help meet legislated targets to cut greenhouse gas emissions.
In October, London reached a deal with Electricité de
France SA, which is working with Areva SA, China General Nuclear Corp.
and China National Nuclear Corp., to guarantee the price for power
generated from their own plant, which will be the first constructed in
the U.K. in almost 30 years.
A foothold in the U.K., is important to Toshiba unit
Westinghouse, which sees the country as a steppingstone to growing its
nuclear business internationally after the 2011 Fukushima reactor
disaster in Japan. Prospects for the nuclear-power market have also
dimmed in the U.S., where a natural-gas glut has made gas-powered plants
cheaper to run.
It isn't Westinghouse's first attempt to enter the U.K.
nuclear sector. Last year, the company was unsuccessful in efforts to
buy Horizon Nuclear Power, which plans new nuclear plants in Wales and
Gloucestershire in England. Westinghouse lost out to Japanese rival
Hitachi Ltd.
The NuGen consortium still faces several hurdles: The group
needs to extend the option on the land where it wants to build the new
power station, since it is unlikely to meet a deadline to submit a
planning application before the end of 2014. Westinghouse also needs to
get its AP1000-model nuclear reactor licensed for use in the U.K., and
that process could take years.
The NuGen consortium paid GBP70 million in 2009 for the
option on the land in Cumbria. NuGen plans to make a final investment
decision in 2015 and, if the plan goes ahead, commission the new nuclear
plant in 2023.
France's GDF Suez SA, which holds the other 50% stake in NuGen, declined to comment.