THE UK government’s energy strategy has suffered a blow after two of the big six power companies announced they would be pulling out of developing new nuclear plants.
The decision by German-based energy companies RWE npower and E.ON follows uncertainty over nuclear energy following the Fukushima disaster last year after a tsunami hit the coast of Japan.
The companies said that they would not proceed with their Horizon project, which looked to develop nuclear reactors at Wylfa in North Wales and at Oldbury-on-Severn in Gloucestershire.
Their decision follows a similar announcement by Scottish and Southern Electricity last year.
Analysts said the decision meant the future of nuclear power in the UK could now be in doubt.
It also left a hole in the UK government’s strategy after the Lib Dems had been persuaded to develop future nuclear power stations.
Gary Smith, of the GMB union, said: “This is a devastating blow, which leaves the UK government energy strategy in tatters.”
However, one of the big six, EDF, last night committed to continuing with nuclear energy development.
Vincent de Rivaz, the chief executive of EDF Energy, said the power giant’s partnership with Centrica would continue.
“We are determined to make UK new nuclear a success,” he said. “The UK needs investment in a diverse mix of energy sources, including nuclear, gas and renewables.”
But last night environmental groups seized on the news as evidence that nuclear power, which provides just under a fifth of UK electricity supplies, was not a viable option for the country’s future energy mix.
Greenpeace’s policy director, Doug Parr, said: “The government’s energy strategy is crumbling. Not even the billions of pounds of taxpayers’ money they have offered as incentives to the German and French nuclear industry are enough to make a new generation of power stations economically viable.
“The future isn’t nuclear – the future is green.”
The announcement was also seen as a vindication of the Scottish Government’s decision to block new nuclear power plants north of the Border.
SNP energy spokesman Mike Weir said: “Despite the UK government bending over backwards to rig the market in favour of nuclear power, the decision by these companies to pull out shows that nuclear power is simply not the answer to our energy needs.
“The SNP Scottish Government has led the way by rejecting nuclear and setting a 100 per cent renewables target for Scotland’s own electricity use.”
Unions warned the announcement would hit jobs at a difficult time in the economy.
TUC general secretary Brendan Barber said: “This is a major jobs blow for the construction and engineering sectors, but it also exposes the government’s position.
“If you think nuclear power has an important role in decarbonising the economy, as ministers say, then you have to make sure that these kinds of very long-term investments occur.”
Business organisations also warned it would hit the UK’s energy supply and security.