Centrica joins UK nuclear race

The energy sector is this morning welcoming a new player in its planned " nuclear renaissance" after Centrica announced it is to press ahead with its long-trailed plan to buy a 20 per cent stake in nuclear firm British Energy from its owner EDF.

The British Gas owner said it is to acquire the stake in a £2.3bn deal that will also see EDF take control of its 51 per cent stake in Belgian utility SPE for £1.2bn.

Centrica had originally agreed a non-binding deal last summer to acquire 20 per cent of British Energy from EDF, following the French company's £12.5bn takeover of the nuclear firm, which operates eight nuclear power plants in the UK and plans to build four new reactors over the coming decade. However, it has negotiated down the price in the wake of falling electricity prices and the onset of a global recession.

Roger Carr, Centrica's chairman, welcomed the deal, arguing that it represents good value for shareholders and "further underpins our green energy credentials".

The move is also likely to be welcomed by the government, which faced some criticism last summer for allowing the UK's nuclear operator to be taken over by a company that is majority owned by the French government at a time when it is planning to expand the UK's nuclear fleet in an attempt to cut carbon emissions and enhance energy security.

Under the terms of the deal, Centrica will take a 20 per cent stake in the four planned new reactors at Hinkley Point in Somerset and Sizewell in Suffolk, the first of which is due to begin operating by the end of 2017.

In related news, EDF confirmed it is inviting expressions of interest as it looks to sell possible nuclear sites at either Heysham or Dungeness. The move had been expected ever since it completed the takeover of British Energy, after European competition authorities signalled it would have to sell at least one site to a rival if it is to compy with antimonopoly rules.

The moves provide further evidence of the growing interest in the UK nuclear sector, driven by the government's plans for a huge expansion in nuclear power and the recent auction of potential sites for new nuclear plants.

However, there was also less encouraging news for the industry over the weekend after The Observer reported it had obtained a leaked letter by Finnish safety authorities criticising one of the companies that hopes to have its reactor design used in the UK's new fleet of nuclear plants.

The letter to Areva's chief executive, Anne Lauvergeon, expresses concerns over the French company's project to install a prototype of a new reactor at the Olkiluoto 3 plant in Finland.

The letter states: "Unfortunately, the attitude or lack of professional knowledge of some persons who speak in the expert meetings on behalf of [Areva] prevent progress in resolving the concerns." It also warns that "without a proper design that meets the basic principles of nuclear safety" the project will not receive safety approval and will face further delays.

Areva told The Observer that the letter was part of regular communications with the watchdog and that the safety issues had been addressed. It added that the issues raised would not result in further delays to the project, which is already widely believed to be several years behind schedule.