Centrica has announced that it will not proceed with its plans to build new nuclear reactors in Suffolk and Somerset.
The company, which has a 20 per cent stake in new nuclear ventures along with EDF Energy for eight nuclear power stations in the UK, has pulled out of plans for new reactors at Hinkley Point and Sizewell. £500 million surplus capital will be returned to shareholders over the next 12 months.
Centrica cited the fast approach of the £1 billion spending cap on the project as its reason for withdrawing, as well as ‘uncertainty about overall project costs and the construction schedule’.
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.”