Nuclear auction hots up as energy giants fight for sites

Several of Europe's leading utilities appear to remain fully committed to the government's low carbon nuclear programme after it emerged bids for three potential reactor sites are running far higher than expected.

Energy companies' confidence in renewable energy projects might have taken a blow in recent weeks, but according to reports in yesterday's Sunday Times, power companies have agreed to pay at least £200m for sites at Oldbury in Gloucestershire, Wylfa in North Wales, and Bradwell in Essex.

The government had expected to raise less than a £100m for the sites, but bidding through an eBay-style online auction run by the Nuclear Decommissioning Authority (NDA) has already passed £200m and could continue to rise this week.

Under the rules of the auction, bidders have two windows a day to increase their bids in increments of £5m. The auction will only close when no bid has been lodged for 24 hours.

One industry source told the Sunday Times that the three consortia involved in the auction - EDF, a joint venture between RWE and E.ON, and a group including Iberdrola, GDF Suez and Scottish and Southern Energy – are bidding cautiously but don't want to miss out.

"If you want to take part in what is expected to be a large programme of new nuclear stations in the UK, the temptation is to keep going back with incremental bids," the source explained.

EDF is reported to be bidding for the Bradwell site, RWE and E.ON are bidding for Oldbury and Wylfa, and the Iberdrola-led consortium is bidding for all three.

The sites are particularly valuable as all of them are near existing reactors and industry experts are therefore confident that securing planning permission will not be a problem.