In the national energy policy paper, it says: "It is important that new nuclear power stations are constructed and start generating as soon as possible and significantly earlier than 2025."

Energy companies in the UK have already announced that they intend to put forward proposals to develop 16 gW of new clear power generation capacity by the end of 2025, according to the Department of Energy and Climate Change. This includes 6.4 gW by EDF, the French utility; 6 gW by Horizon Nuclear Power, owned by German energy providers RWE and E.ON; and 3.6 gW by NuGeneration, a joint venture between French company GDF Suez and Iberdrola, a Spanish energy company.

The nuclear industry currently employs 44,000 people in the UK. The 16 gW of new capacity is likely to create 30,000 jobs by 2025.

The main challenge to developing new nuclear projects in the UK, however, stems from the high project costs they entail, especially at a time when the government is looking at ways to cut spending.

Given the negative sentiment against nuclear energy, some investors have now decided to drop their plans. For instance, Horizon Nuclear Power, owned by two German utilities RWE and E.ON, had planned to build nuclear reactors in Wylfa, Anglesey and Oldbury in Gloucestershire.

The two companies abandoned the plans to build these plants after Germany decided to phase out nuclear power after the Fukushima disaster. In March, they said that they are withdrawing from new nuclear investment in the UK and are selling Horizon and these sites.

"E.ON and RWE's withdrawal is clearly very disappointing, but the partners have clearly explained that this decision was based on pressure elsewhere in their businesses and not due to any doubts about the role of nuclear power in UK's energy future," Charles Hendry, the British energy minister said.

Areva, the French engineering company, said in July that it was teaming up with China Guangdong Nuclear Power Group for the bid. But both companies walked away from the bid last month, without giving any specific reasons. It was also reported that Westinghouse Electric Company, the American nuclear company owned by Japan's Toshiba, had been in talks with China's State Nuclear Power Technology for a joint bid, but later went ahead on its own without the Chinese company.

Industry experts feel that lack of incentives could be the main reason why the project is having difficulty finding any takers. Under the current energy policy, the British government plans to have a fixed price for low carbon energy. If the price is too low, energy companies may find it not worthwhile given that nuclear power is expensive to produce and entails huge investment. Vincent de Rivaz, chief executive of EDF, the French energy company, warned the British government that it might also not go ahead with its nuclear power station project in the UK.

Chinese investors, however, still remain keen on making further investments in the sector. Jin Liqun, chairman of the board of supervisors of China Investment Corp, the nation's sovereign wealth fund, said nuclear power stations is an area where China and Europe can work together. He said Europe has the technology and China has the demand, but the respective governments are cautious on cooperation due to security concerns.

Jin advocates a more open-minded approach to channel investment from China. "A lot of the concerns about the so-called national security actually have nothing to do with security. The most serious security source is the lack of growth," he said in a speech in London.

 

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