* Hitachi to build 4-6 nuclear power plants in UK -DECC
* First power plant to become operational in mid-2020s
* Hitachi offered more money than rival bid-source
By Henning Gloystein and Karolin Schaps
LONDON, Oct 30 Hitachi on Tuesday won a
bid to take over a company building up to six nuclear power
plants in Britain, reviving hopes for investment in the UK's
ageing energy infrastructure but leaving doubts they will come
online in time.
Hitachi said it expected to have the first 1,300 megawatt
(MW) nuclear power plant in the UK operational by the mid-2020s.
"This is a decades-long, multi-billion pound vote of
confidence in the UK that will contribute vital new
infrastructure to power our economy," British Prime Minister
David Cameron said in a statement.
The British government said that Horizon would eventually
include up to six nuclear power plants, which would be able to
provide 14 million homes with electricity for 60 years.
Hitachi is taking over the project from German utilities
E.ON and RWE for 696 million pounds ($1.1
billion) and said it was already in discussions to find another
company to operate the plants after they are built.
Analysts said the Japanese company could struggle to build
the facilities in time to fill a looming power supply gap in
"The deal is certainly a positive development for UK
electricity supplies given the concerns in the wake of RWE and
E.ON pulling out, (but) if you are looking at a three-to-four
year turnaround in the approvals process, that will inevitably
fuel concerns over the UK's supply-demand balance in the latter
part of this decade," Craig Lowrey, consultant at UX Energy
Before construction can start, the Japanese company's
Advanced Boiling Water Reactor (ABWR) design will need to be
approved by Britain's nuclear regulator, a process that Hitachi
said would take three to four years.
Hitachi has a track record of delivering projects on time
and on budget, UK Energy and Climate Change Secretary Edward
LOOMING SUPPLY GAP
Britain's power generation infrastructure is ageing and in
need of modernisation to meet future demand and carbon reduction
"By 2023, Britain will have shut down all but one of its
existing nuclear power plants, which means up to 18 percent of
current energy supply will disappear," Omar Abbosh of managing
consultants Accenture said.
Hitachi said it had signed memorandums of understanding
with British companies Babcock International and
Rolls-Royce to help deliver the Horizon projects and
would create 5,000-6,000 jobs in Britain during construction.
The Japanese company beat a rival bid from Toshiba,
which owns U.S.-based nuclear reactor designer Westinghouse.
Westinghouse declined to comment on the outcome.
"It was the money in the end. Westinghouse offered about the
same, a touch less," said one source close to the negotiations.
The deal is expected to officially close at the end of
JAPAN IN, GERMANY OUT
Hitachi has developed a different corporate strategy from
that of E.ON and RWE to cope with the nuclear exit policies of
their respective governments.
Following the nuclear accident at Japan's Fukushima reactors
in the aftermath of a massive earthquake in March 2011, both
Japan and Germany announced long-term plans to exit nuclear
power generation, leaving companies with a choice of searching
for new markets or closing their nuclear businesses.
Germany's E.ON and RWE decided to exit the nuclear sector.
"The sale (of Horizon) is in line with E.ON's revised
strategy," E.ON said in a statement. RWE said it now has no
further national or international new-build projects under way
in the nuclear energy sector.
Hitachi, by contrast, has begun to seek overseas
opportunities to sell their nuclear technology to, including
Britain, Central Europe and the Middle East.