Government opens bidding for nuclear sites

Tim Webb
guardian.co.uk, Sunday 1 March 2009 15.27 GMT

The government will this week kick off an ebay-style auction of sites on which some of Europe's largest energy companies will build up to six new nuclear reactors.
The Nuclear Decommissioning Authority will invite eligible companies including Scottish and Southern Energy, French groups EDF and Suez, the German groups RWE and E.ON, Iberdrola of Spain and Swedish energy group Vattenfall to start bidding for the three parcels of land.
The companies will bid electronically as many times as they want and can track in real time the highest offer for each site, but not the identity of the bidder. The auction will close at the end of the month.
The model is similar to the government's two-month auction of third generation mobile phone licences in 2000, which raised £22.5bn, far more than expected.
The NDA's sale is likely to raise only a fraction of that amount. The NDA and bidders declined to indicate how much they thought the sites may fetch, but the sums are likely to run into the hundreds of millions, rather than billions.
The three parcels of land are all adjacent to soon to be closed or decommissioned nuclear reactors owned by the NDA at Wylfa in Anglesey, Bradwell in Essex and Oldbury near Bristol. The three sites all have access to existing grid connections but these would need to be upgraded for any larger new reactors built there. The sites also do not have planning permission for new reactors though they would have a good chance of getting the go-ahead because existing reactors are already nearby.
EDF is also selling the land it bought near the Wylfa site. The French group bought the land before it took over nuclear generator British Energy, whose sites it will use to build four new reactors. As part of the conditions of the deal, EDF must put the land up for sale to allow rivals to be involved in nuclear new build.
EDF has a big headstart over its rivals competing to be involved in Britain's new nuclear build programme as British Energy owns the most suitable sites. Clauses in the takeover also allow EDF to delay selling some of its land until the French company has secured planning permission to build new reactors on its preferred sites.
Last week, Sam Laidlaw, chief executive of Centrica, insisted that it was still possible for EDF to meet its aim of building Britain's first new nuclear reactor to be operational by December 2017, provided there were no planning or licensing delays. Centrica is continuing negotiations with EDF about buying a 25% stake in British Energy.