German E.ON, RWE team up to build UK nuclear plants

Rival German utilities RWE (RWEG.DE) and E.ON EONG.DE have joined forces to build new nuclear power stations in Britain.

E.ON UK and RWE npower said on Wednesday they wanted to build and operate at least six gigawatts of nuclear power stations in the UK as part of the British government's plan to replace ageing reactors.

"We welcome and support the UK's decision to expand its power generation by introducing a new generation of nuclear power stations," E.ON chief executive Wulf Bernotat said.

"We are pleased to be working with RWE, who we see as a skilled, experienced and reliable partner to develop new nuclear power in the UK."

E.ON and RWE own and operate nuclear power plants in Germany but have been looking abroad to build and operate new ones because the German government plans to close all the country's reactors by 2021 and has no plans to build new ones.

Germany's two biggest utilities, normally fierce competitors, said their combined financial strength would help pay for the expensive and lengthy contruction process.

"E.ON is the ideal partner for UK development given that our businesses have complementary strengths and capabilities, and a successful track record in nuclear power," Andrew Duff, Chief Executive of RWE npower, said.

"The UK power industry needs significant investment to replace ageing coal and nuclear plant and to drive the change to a lower carbon economy ... Large infrastructure projects can bring major benefits to the UK economy through jobs, direct investment and supply chain opportunities."

French nuclear energy giant EDF (EDF.PA) has led the push to replace Britain's atomic energy facilities and is buying British Energy (BGY.L), the owner of most of the existing plants, so it can build at least four new power stations at those sites. RWE npower got grid connection rights for a 3.6 gigawatt nuclear plant at Wylfa in north Wales last year and may buy farmland close to the existing power station to build it on, while E.ON has bought land at another site at Oldbury in Gloucestershire.

"Nuclear energy is a growing part of the global energy supply for the foreseeable future. It forms a key part of RWE's strategy to deliver growth and to reduce CO2," RWE's CEO Jurgen Grossmann said.

"This creates attractive business opportunities for RWE." E.ON picked Areva (CEPFi.PA) and Siemens (SIEGn.DE) as partners to build new reactors in Britain in April 2008 but the new joint venture could also use other reactor builders.

"The joint venture retains an open position on the reactor technology for individual sites it acquires and will make a selection based on a thorough assessment of the technical and commercial merits," E.ON and RWE said in a statement.

E.ON also said on Wednesday it was part of a new plan to build a nuclear power plant in Finland.

(Source: Reuters)