RWE/E.ON and EDF win nuclear auction

The government yesterday confirmed that the Nuclear Decommissioning Authority has successfully completed the auction of three potential new nuclear sites for a combined total of £387 million, significantly more than the government had previously expected to raise.

French utility EDF won the auction to buy land to construct a new nuclear site at Bradwell in Essex, while a consortium made up of RWE and E.ON secured sites at Wylfa in Angelsey and Oldbury in Gloucestershire.

Spanish energy giant Iberdrola confirmed yesterday morning that its consortium with French utility GDF Suez and Scottish and Southern Energy had pulled out of the bidding for the three sites after auction prices soared.

"Due to technical, economic and financial reasons, the companies today decided not to present new offers in the auction organised by the Nuclear Decommissioning Authority and EDF," Iberdrola said in a release.

The Financial Times reported that the consortium decided to quit after the cost of the Bradwell site rose from the reserve price of £40m to £160m in the auction.

Following the closure of the auction, the RWE and E.ON joint venture announced that it intended to develop both of the new sites with the aim of generating at least six gigawatts of power. It also said that it aimed to have the first reactor up and running by the end of the next decade.

The government welcomed the deals, arguing that with EDF Energy planning to build 6.4GW of new capacity, planned new nuclear capacity exceeds current capacity and could provide up to a quarter of the UK's electricity with low carbon energy.

"The successful outcome of this site auction is yet more evidence of major energy players gearing up for investment in low carbon energy in the UK," said Energy and Climate Change Secretary Ed Miliband. "Alongside EDF Energy's firm plans, the RWE and E.ON joint venture plans announced today take the total declared plans for the first phase of new build to 12.4 gigawatts, greater than our existing, but ageing, nuclear capacity."

There are an eight further potential sites earmarked for future development and the government is currently running a public consultation on their suitability. The NDA insisted that each of the new sites would be subject to regulatory and other consenting processes.