Energy firm Centrica has scrapped its 20% investment in Hinkley Point C new nuclear power station today after pre-development costs reach almost £1bn.
The firm said it decided to not to proceed with funding construction of the power station in Somerset while there is uncertainty about the overall project costs and construction schedule.
Centrica will write its investment into Hinkley Point C off in its 2012 results after with pre-development expenditure close to reaching an agreed £1bn cap.
“Since our initial investment, the anticipated project costs in new nuclear have increased and the construction timetable has extended by a number of years,” said Centrica chief executive Sam Laidlow.
“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.”
Centrica bought a 20% interest in EdF Energy’s eight operation nuclear power stations in the UK and an option for a 20% interest in constructing Hinkley Point C in 2009.
EdF Energy was due to make its final investment decision for Hinkley Point C by the end of 2012 but has delayed this until the first quarter of 2013.
The firm played down Centrica’s departure adding momentum was behind the Hinkley Point C project.
“The new nuclear project at Hinkley Point C is making good and continuous progress. EDF Energy is working with Government to agree a price for the electricity at Hinkley Point C which will be fair and balanced for UK consumers and investors,” said EdF chief executive officer Vincent de Rivaz.
“This Contract for Difference is now more than ever the key to attracting investors and to unlock the funding for this project which will give the UK the secure, low carbon energy it needs for the future.”