UK looks to Finnish nuclear finance model

Large industrial companies have indicated to nuclear specialist Parsons Brinckerhoff that they could be willing to club together and contribute to the cost of a new-build nuclear programme, which is expected to be given the green light by prime minister Tony Blair next month.

The approach would mirror that being used to finance the Olkiluoto station in Finland, which is currently under construction. That facility is being financed by a consortium of mining groups and other energy intensive industries.

UK firms that use the most energy, such as mining, chemical and metals companies, could club together in a similar way, because they are worried about record energy prices.

Alistair Smith, head of nuclear at PB Power, the energy division of Parsons Brinckerhoff, confirmed that big clients had shown an interest after approaching PB Power for advice about ensuring security of supply.

He said: "They're interested in getting electricity at a stable price. It's not just the big industrials - accountants like Pricewaterhouse Coopers, with 60 offices in the UK, might be interested too. The individual customers could team up and say, ‘We'll finance these stations'."

PB Power, which last week published a report on relative energy costs, has been advising clients that new-build nuclear, which would cost 2.5p per kW/h, could represent a better bet in the future than gas, which currently costs twice as much.

We’re looking at Finland, the USA and France to see if any or all of these elements can be used in the UK

Source close to British Energy

Smith declined to reveal his clients but said big mining, chemicals and metals firms would be interested. This brings into play steel companies such as Corus and mining firm such as Rio Tinto.

Smith added that the firms would need the government to come down strongly in favour of nuclear in its energy review, due next month, to move forward. If this is forthcoming, the firms could obtain economies of scale by funding several power stations.

Blair told a CBI dinner two weeks ago that nuclear power was "back on the agenda with a vengeance". Most observers have taken this as a signal that the energy review, currently being undertaken by energy minister Malcolm Wicks, will call for nuclear new build.

The firms could form an alliance with operator British Energy, which runs the present nuclear power stations and sells more than half its electricity to the big energy using firms.

A source close to BE said: "It is really too early to know at the moment but we're looking at Finland, the USA and France to see if any or all of these elements can be used in the UK."