* NuGen agreed to pay 70 mln pounds for site
* Energy ministry says may review other scenarios for site
* Iberdrola in talks with Westinghouse on NuGen stake sale
By Karolin Schaps
LONDON, Sept 24 The British government is
considering holding a new auction for a piece of land earmarked
for construction of a nuclear plant after current owner NuGen
has failed to make any progress, industry sources said.
The NuGen joint venture between France's GDF Suez
and Spain's Iberdrola struck a deal to buy the site at
Sellafield in Cumbria in 2009, signing an option agreement with
the Nuclear Decommissioning Authority (NDA) and committing to
reach a certain level of progress by a deadline.
The joint venture plans to build up to 3.6 gigawatts of new
nuclear capacity at the site, which it has named Moorside.
For the site alone, NuGen paid an initial 19.5 million
pounds ($31.3 million) and agreed to pay another 50.5 million
pounds over six years, or more than 8 million pounds a year, the
2009 agreement showed.
Neither the government nor NuGen would reveal details of the
deadline or the progress required due to commercial
The site remains untouched, while NuGen has yet to find a
reactor builder and has lost one of its partners, SSE.
Frustrated by the delay at Sellafield, the government is
considering its options for the site as it pushes through an
ambitious nuclear new-build programme, which is needed to
replace ageing reactors.
"They are thinking about auctioning the site," said an
industry source, who requested anonymity because of the
confidentiality of the topic. The information was confirmed by
another two industry sources familiar with the situation.
The energy ministry and the NDA declined to comment, and
officials at NuGen could not be reached for comment.
"If the option is not exercised by the agreed deadline,
there may be a number of alternative scenarios, and we would
have to consider these carefully when the position becomes
clearer," a spokesman for Britain's energy ministry said,
without elaborating on the scenarios available.
NuGen partner Iberdrola is in talks with Toshiba's
Westinghouse unit to take over its 50 percent stake in the joint
venture, a deal that could rejuvenate the project.
The Sellafield property, if reopened for auction, is likely
to attract strong interest as a cheap option for investors to
secure a British nuclear new-build site.
Last year, the sale of the Horizon nuclear new-build venture
with two sites in Britain by utilities RWE and E.ON
to Hitachi fetched 696 million pounds, a sum that
experts say was well above expectations.
In 2011 the government shortlisted eight sites around the
country as suitable to build new nuclear power plants, including
the site at Sellafield.
Other sites include two owned by Horizon and the remainder
are owned by France's EDF.
The French utility wants to build Britain's first new
nuclear plant in decades at Hinkley Point in Somerset and is in
discussions with the government about a fixed minimum
electricity price for power generated from the new plant.
The three nuclear new build groups said they could jointly
build around 16 gigawatts of new capacity by 2025, a target that
now looks ambitious after Japan's Fukushima crisis delayed
regulatory progress and added to mounting nuclear plant bills.