Iberdrola throws nuclear hat into the ring

Spanish energy giant Iberdrola has become the latest European company to signal its interest in the UK's new nuclear building programme, announcing yesterday it is to join forces with Scottish and Southern Energy (SSE) to secure potential sites for new nuclear reactors.

Just a week after RWE npower and E.ON UK announced similar plans for a £20bn joint venture, Iberdrola, the parent company to Scottish Power, said it would work with SSE to tender bids for new nuclear reactor projects in the UK.

Pedro Azagra, Iberdrola's director of development, said that the company was committed to the UK market and supported the government's plans "to develop new nuclear power plants for low-carbon energy supply".

The companies said the new joint ventures would initially focus on securing sites for future development and would consider adding additional partners to the consortium at a later date.

Alistair Phillips-Davies SSE's energy supply director said that the proposed new generation of nuclear reactors was essential to secure UK energy supplies, adding that the plans were consistent with SSE's "long-standing willingness to work with other parties in this area, and complements our core investment strategy in renewables".

The move will be welcomed by the UK government, which has seen considerable interest in its plans for new nuclear reactors since they were announced last year.

RWE npower and E.ON UK announced earlier this month that they planned to work together to develop at least four new nuclear power stations capable of producing six gigawatts of power.

EDF has also pledged to build four new reactors following its takeover of British Energy, while the Iberdrola-SSE and npower-E.ON are now expected to fight it out for a number of former British Energy sites, such as Bradwell in Essex and Dungeness in Kent, which EDF is expected to dispose of under terms of the takeover deal designed to ensure a competitive UK nuclear industry.

The new wave of nuclear operators will also bring considerable experience to the UK nuclear sector. EDF owns and operates France's huge nuclear reactor fleet, while E.ON and npower's parent company RWE jointly own three reactors in Germany and Iberdrola has stakes in seven Spanish nuclear plants.