Nuclear firms pay £70m for Sellafield site

Consortium of Iberdrola, SSE and GDF to start building atomic power station in 2015

A multinational consortium of energy companies is paying £70m for land adjacent to Sellafield suitable for building a new atomic power station.

Scottish & Southern Energy (SSE), Spain's Iberdrola and France's GDF Suez have acquired the 470-acre site, which is the fourth piece of land to be sold by the Nuclear Decommissioning Authority (NDA). The consortium plans to build an installation with a capacity of up to 3.6 gigawatts, starting in 2015.

The SSE/Iberdrola/GDF group is the third new entrant to the UK nuclear industry after France's EDF bought British Energy for £12.5bn in January, and a consortium of Germany's RWE Npower and E.ON was successful in earlier NDA land auctions in April.

SSE/Iberdrola/GDF was also a bidder in previous auctions for land at Wylfa, Oldbury and Bradwell. But the group pulled out after competition became so fierce it ran for six weeks rather than the expected one, and netted the Government a whopping £387m rather than the expected £100m.

The Government is putting all of its weight behind a UK nuclear renaissance, which it regards as a way to replace ageing power infrastructure, meet rising demand and help address energy security issues. The most advanced plans are from EDF, which is committed to building a further four power stations.

Taken together with yesterday's announcement of the plans for Sellafield, there are now proposals for sufficient nuclear energy to power all 26 million UK homes, according to Ed Miliband, the Energy secretary. "This sale is further proof that we're giving industry the confidence to invest and that the UK is creating a successful low-carbon economy," he said.

The Sellafield sale takes the NDA's total income from the land auctions to £450m. It will receive £19.5m from the SSE/Iberdrola/GDF consortium immediately, followed by another £50.5m over the next six years.

John Clarke, the organisation's commercial director said: "The sale of this land is a significant milestone in our asset disposal programme and follows on from the successful sale of land at three of our sites earlier this year. The £450m generated from these sales will be utilised to support the NDA's clean-up mission and is good news for the UK taxpayer."

The next step for the consortium – which Iberdrola and GDF Suez each own 37.5 per cent of, with the remaining 25 per cent held by SSE – is a detailed site investigation to fix the location of the new nuclear power station. Any surplus land will be returned to the NDA.

As yet no decisions have been made about whether the new installation will use Westinghouse's AP1000 reactors, or technology from its rival Areva.