Bloomberg News

U.K. Atomic Review Sees No Reason to Cut Back Post-Fukushima

October 11, 2011

(Updates with analyst comment from eighth paragraph.)

Oct. 11 (Bloomberg) -- The U.K.’s nuclear inspector said there’s no need to scale back operations at existing atomic plants or change the licensing process for new reactors in the aftermath of Japan’s Fukushima disaster.

“There is no reason to curtail the operation of U.K. operating sites,” Mike Weightman, chief inspector of nuclear installations, said today in a report on the implications for Britain’s nuclear industry of the Fukushima accident. “There are no fundamental weaknesses in the U.K. nuclear licensing regime or the safety assessment principles that underpin it.”

Governments around the world called for inspections of nuclear sites after a magnitude-9 earthquake and tsunami in March led to Japan’s worst atomic accident and the most serious nuclear crisis since Chernobyl in 1986. Following a request by U.K. Energy Secretary Chris Huhne, Weightman drafted an interim assessment in May that proposed 25 areas for review, including the layout of existing plants and emergency-response measures.

“The report makes clear that the U.K. has one of the best nuclear safety regimes in the world, and that nuclear power can go on powering homes and businesses across the U.K.,” Huhne said in an e-mailed statement from the Department of Energy and Climate Change. “We must however continue to improve where we can.”

‘Robust’ System

Weightman sees no need to change siting strategies for new nuclear stations in the U.K., the DECC said in the statement, citing the review. “The U.K. practice of periodic safety reviews of licensed sites provides a robust means of ensuring continuous improvement in line with advances in technology and standards,” it said.

The companies affected by the report’s findings include Centrica Plc and Electricite de France SA. EDF owns 15 of Britain’s 19 operating nuclear reactors, accounting for 18 percent of total power generation, and plans to build four more. The Paris-based utility acquired all of the U.K.’s atomic plants in 2008 before selling a 20 percent stake to Centrica, along with the option to be a minority investor in new plants.

Other companies considering investing in new nuclear facilities in the U.K. include EON AG and RWE AG, as well as GDF Suez SA in partnership with Iberdrola SA. EON and RWE are spending almost 1 million pounds ($1.6 million) a week in order to begin construction of a reactor by 2015, according to RWE Npower Chief Executive Officer Volker Beckers.

‘Massive Capital Expenditure’

“Projects such as these take up massive capital expenditure and rarely stick to agreed timelines and budgets,” Nick Campbell, an analyst at Inenco Group Ltd., said by e-mail. “This is especially true at a time of lower risk appetite to credit and unappealing economic landscape.”

The partial meltdown at the Fukushima Dai-Ichi plant sparked a public outcry in Germany, driving Angela Merkel’s government to rule that all the country’s nuclear plants will shut by 2022. So-called stress tests ordered by the European Union’s regulatory arm are “on track,” spokeswoman Marlene Holzner said last month.

“The nuclear industry has already taken a large hit, but the full financial impact for operators is still unclear,” Daniel Grosvenor, an analyst at Deloitte, said in a statement.

Before the Fukushima calamity, the U.K. government had begun an assessment of the country’s energy regulation in an effort to accelerate investment in nuclear projects. Utilities may need to spend as much as 6 billion pounds per reactor, according to U.K. Energy Minister Charles Hendry.

--Editors: Amanda Jordan, Stephen Cunningham.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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