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UK

RWE sees new UK reactors as early as 2017

FRANKFURT (Reuters) - German power group RWE, which has teamed up with E.ON to build British nuclear power stations, believes the first plant could be up and running in 2017, its UK chief executive told Reuters.

Juergen Grossmann, CEO of German multi-utility RWE poses before the annual news conference in Essen February 26, 2009. REUTERS/Ina Fassbender

“The year 2017 or 2018 would be the first point at which we could expect to have the first plant operating. That is the optimistic view,” Andrew Duff, CEO of RWE npower, said in an interview.

E.ON UK and RWE said in January they aimed to build and operate 6,000 megawatts (MW) of nuclear capacity in Britain -- enough power to fuel Scotland and Wales. Britain needs to replace ageing power plants over the next two decades.

“3,000 megawatts each (for RWE and E.ON) is the plan...probably on a minimum of two sites,” Duff said, adding that the cost for RWE’s part would top 6 billion pounds.

This would be part of long-term investment plans on top of a planned 1 billion pounds to go into coal, wind and gas fired capacity in the UK each year over the next decade.

He said there are many risks -- the availability of sites needs to be secured, the technology licensed and construction approved. There also needs to be a solution for nuclear waste storage.

RWE, which operates five nuclear power units at three sites in Germany, would either choose Areva or Westinghouse technology for Britain, Duff said.

WINNING OVER THE PUBLIC

Public opinion in Britain is increasingly in favour of nuclear power in the realisation it is needed to cut climate-changing carbon emissions, Duff said.

Dwindling gas in the North Sea are also pushing Britain into a search for alternative fuels, he said.

Duff added that apart from French competitor EDF, the German consortium was the only one with potentially suitable land.

This means they are less dependent on an auction to be held shortly by Britain’s Nuclear Decommissioning Authority (NDA) for land at existing reactor sites, he said.

RWE bought options on farmland near the Wylfa site in Wales, while E.ON has sites near Oldbury.

The division, which is forecasting the second year of falling profits, will only see a recovery in the long term, Duff said.

“We wouldn’t be investing so heavily if we weren’t optimistic about the UK market. In the longer run we are very confident.”

The falling pound, programmes that oblige U.K. utilities to promote energy saving, and “fierce” competition will weigh on profits, the company said last month.

“2009 is going to be a tough year for the energy industry,” Duff said.

RWE npower is RWE’s second-biggest unit in terms of sales but generated less than a tenth of RWE’s 6.8 billion euros (6.3 billion pounds) of operating earnings in 2008. The division produces more than 10 percent of English and Welsh power.

additional reporting by Tom Kaeckenhoff

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