Nuclear power generators join forces to develop new reactors

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The Independent Online

Britain's two nuclear electricity generators will today announce that they are joining forces to develop a new generation of reactors based on a Westinghouse design. The development project, if successful, could lead to a £10bn programme to build 10 new stations to replace all of the UK's existing nuclear capacity by 2025.

Today's announcement by British Energy and British Nuclear Fuels follows the cautious backing given to new investment in nuclear stations in the Government's recent energy review. The document said the nuclear option should be kept open and recommended practical measures to achieve this, such as exempting nuclear power from the climate change levy.

The plan being unveiled envisages a new generation of reactors based on the Westinghouse AP 1000 design. BNFL, which owns Westinghouse, estimates that the new design could enable it to cut the cost of building a new 1,000 to 1,200 megawatt station by as much as a half.

British Energy has also looked at a new nuclear programme based on the Candu 600 design from Canada and this could be kept in reserve.

Despite the more cost-efficient designs now available, British Energy estimates that electricity from a new nuclear station would still be about 40 per cent more expensive than the current market price. This means that there would need to be government support to close the financial gap. But as BNFL is still state-owned, a joint venture between the two companies could provide the basis of the public-private partnership needed to kickstart a new generation of nuclear stations.

In its submission to the Energy Review, British Energy called on the Government to assume all of the company's pre-1996 reprocessing liabilities, estimated at £3bn, and allow it to renegotiate its existing spent-fuel contracts with BNFL. This would enable it to reduce its spent-fuel costs by £250m a year and fund a new generation of stations. Despite protracted talks, no agreement on the fuel contracts will be announced today.