04/02/2013
Centrica Is Not Proceeding With Nuclear Investment
In 2009, Centrica acquired a 20% interest in EDF Energy's eight operational nuclear power stations in the UK and also took an option for a 20% interest in the construction of new nuclear power stations at Hinkley Point and Sizewell.
The acquisition was funded through a £2.2 billion Rights Issue, completed in 2008, part of which provided financing for the investment in new nuclear. Having taken the decision not to proceed with the new nuclear investment, the Group will launch a £500 million share repurchase programme, to return surplus capital to shareholders, which will be conducted over the next 12 months.
With pre-development expenditure on the project approaching the agreed £1 billion cap, Centrica's decision not to proceed follows a detailed appraisal of the project. While there has been progress in a number of key project areas, particularly design and planning, there remains uncertainty about overall project costs and the construction schedule. Centrica's 20% share of the pre-development expenditure will be written off as an exceptional cost in the Group's 2012 results.
Sam Laidlaw, Chief Executive of Centrica, said: "We believe that nuclear generation has a valuable role to play in a balanced UK energy mix. Centrica and EDF continue to enjoy a successful partnership in existing nuclear. However, since our initial investment, the anticipated project costs in new nuclear have increased and the construction timetable has extended by a number of years.
"These factors, in particular the lengthening time frame for a return on the capital invested in a project of this scale, have led us to conclude that participation is not right for Centrica and our shareholders. In 2012 we invested over £2 billion in securing supplies of energy for the UK and where we see attractive returns we will continue to invest in Britain's energy future."
The acquisition was funded through a £2.2 billion Rights Issue, completed in 2008, part of which provided financing for the investment in new nuclear. Having taken the decision not to proceed with the new nuclear investment, the Group will launch a £500 million share repurchase programme, to return surplus capital to shareholders, which will be conducted over the next 12 months.
With pre-development expenditure on the project approaching the agreed £1 billion cap, Centrica's decision not to proceed follows a detailed appraisal of the project. While there has been progress in a number of key project areas, particularly design and planning, there remains uncertainty about overall project costs and the construction schedule. Centrica's 20% share of the pre-development expenditure will be written off as an exceptional cost in the Group's 2012 results.
Sam Laidlaw, Chief Executive of Centrica, said: "We believe that nuclear generation has a valuable role to play in a balanced UK energy mix. Centrica and EDF continue to enjoy a successful partnership in existing nuclear. However, since our initial investment, the anticipated project costs in new nuclear have increased and the construction timetable has extended by a number of years.
"These factors, in particular the lengthening time frame for a return on the capital invested in a project of this scale, have led us to conclude that participation is not right for Centrica and our shareholders. In 2012 we invested over £2 billion in securing supplies of energy for the UK and where we see attractive returns we will continue to invest in Britain's energy future."
Related UK National News Stories
Click here for the latest headlines.
04 December 2006
PM unveils nuclear weapons plans
Prime Minister Tony Blair has told the Commons that the UK's current Trident missile system will have to be replaced. Speaking to the House of Commons, Mr Blair said that the decision to maintain the government's independent nuclear power deterrent was "fully consistent with all our international obligations".
PM unveils nuclear weapons plans
Prime Minister Tony Blair has told the Commons that the UK's current Trident missile system will have to be replaced. Speaking to the House of Commons, Mr Blair said that the decision to maintain the government's independent nuclear power deterrent was "fully consistent with all our international obligations".
21 April 2004
Sellafield set to reduce radioactive discharges
Sellafield, the British Nuclear Fuels-run power station in Cumbria, is set to cut discharges of a certain type of radioactive material by 90% – waste matter which had been pumped into the Irish Sea.
Sellafield set to reduce radioactive discharges
Sellafield, the British Nuclear Fuels-run power station in Cumbria, is set to cut discharges of a certain type of radioactive material by 90% – waste matter which had been pumped into the Irish Sea.
04 March 2013
MPs Call For New Nuclear Power Stations
Failure to build a new fleet of nuclear power stations in the UK could make it much more expensive to meet our climate change targets and Ministers must stop 'crossing their fingers' and urgently develop a back-up energy strategy, a report by the Energy and Climate Change Committee argues.
MPs Call For New Nuclear Power Stations
Failure to build a new fleet of nuclear power stations in the UK could make it much more expensive to meet our climate change targets and Ministers must stop 'crossing their fingers' and urgently develop a back-up energy strategy, a report by the Energy and Climate Change Committee argues.
04 September 2014
EDF To Close Four Nuclear Reactors
Four nuclear reactors at Heysham 1 and Hartlepool power stations are to shut down to allow a detailed programme of boiler inspections to take place, EDF Energy has announced. The action was taken after the discovery of a crack on a component known as a boiler spine at Heysham 1.
EDF To Close Four Nuclear Reactors
Four nuclear reactors at Heysham 1 and Hartlepool power stations are to shut down to allow a detailed programme of boiler inspections to take place, EDF Energy has announced. The action was taken after the discovery of a crack on a component known as a boiler spine at Heysham 1.
17 February 2004
Nuclear watchdog chief to return to Libya
The head of the UN's nuclear watchdog agency has confirmed that he will visit Libya next week to ensure that its nuclear programme has been placed on an exclusively peaceful footing. The Director-General of the Vienna-based International Atomic Energy Agency (IAEA), Mohamed ElBaradei, will meet with senior Libyan officials on February 23 and 24.
Nuclear watchdog chief to return to Libya
The head of the UN's nuclear watchdog agency has confirmed that he will visit Libya next week to ensure that its nuclear programme has been placed on an exclusively peaceful footing. The Director-General of the Vienna-based International Atomic Energy Agency (IAEA), Mohamed ElBaradei, will meet with senior Libyan officials on February 23 and 24.