Toshiba to buy majority stake in UK nuclear group NuGen

LONDON Tue Jan 14, 2014 12:00pm EST

LONDON Jan 14 (Reuters) - Japan's Toshiba has signed a preliminary agreement to purchase 60 percent of the NuGen UK nuclear joint venture between GDF Suez and Iberdrola for 102 million pounds, Toshiba's Westinghouse nuclear unit said on Tuesday.

Westinghouse will build three of its AP1000 nuclear reactors at the NuGen Moorside nuclear site in northern England, with an installed capacity of 3,400 megawatts (MW). The first reactor is due to come online in 2024, the company said.

Toshiba will pay 85 million pounds ($140 million) for Iberdrola's 50 percent stake in the joint venture and 17 million pounds for 10 percent of GDF Suez' stake. The French company will retain a 40 percent share of the group.

"This project supports the UK government's policy for new nuclear development - the timetable to operation, financial robustness, proven technology, and the project's overall benefit to the UK economy," said Jeffrey Benjamin, Westinghouse Senior Vice President of nuclear power plants.

Britain is one of the main countries in Europe pursuing the construction of new nuclear plants in the wake of Japan's 2011 Fukushima disaster.

It plans to replace its ageing nuclear plants by the middle of the next decade as part of a bid to lower carbon emissions in its electricity sector.

Toshiba is the second Japanese company to enter the UK's nuclear new build race, after rival Hitachi bought the Horizon nuclear project in western Britain, from Germany's E.ON and RWE in 2012. Hitachi plans to build two to five new nuclear reactors over two sites.

Westinghouse's AP1000 reactors, some of which are under construction in China, require regulator approval before they can be built in Britain.

The company expects to obtain Generic Design Assessment (GDA) approval in mid-2016, Westinghouse's AP1000 Programme Director, Simon Marshall, said.

France's EDF and Areva form a third group planning to build new nuclear plants in Britain and their Hinkley Point C project in southern England is expected to be the first new nuclear station to start operating in 2023.

The British government announced in October the preliminary terms of a deal to guarantee operator EDF a minimum price for electricity to be produced from its Hinkley Point C project.

Similar deals are due to be negotiated for the Horizon and NuGen projects.