Cameron told UK firms risk missing out on nuclear contracts

The British prime minister, David Cameron has been warned that UK companies will struggle to win the bulk of the £60bn expected to be spent building the next generation of nuclear plants.

Mr Cameron made it clear when he signed an energy alliance deal with the French president, Nicolas Sarkozy, that he wanted to see the "vast majority" of the content "constructed, manufactured and engineered" by British companies.

 He has been given no firm assurances on a "buy British" commitment by either President Sarkozy or EDF, the French state-controlled energy group in line to build the first new plants.

The Daily Telegraph reports that with the heart of the new power stations based on French designs and technology, Mr Cameron has been warned there is little prospect of achieving his aim.

Tim Fox, head of energy at the Institution of Mechanical Engineers, said that most of the contracts for the first plants "will go to France rather than the UK".

He estimates British companies could undertake about 70 per cent of the engineering and construction work and, while he welcomes the nuclear power pact, he said "this is not necessarily the best deal for securing UK jobs and skills".

The Telegraph comments that Britain has effectively abandoned the nuclear technology it pioneered and is now heavily committed to French systems, as the junior partner in a wide-ranging alliance that covers the energy canvas from renewables to more power links between the two countries and ties Britain into a European energy super grid.

The main emphasis is on the nuclear dimension where Mr Cameron and President Sarkozy agreed to set up a high-level group called N12, with six members each from the British and French sides.

It will look at policy, economics, the back-end fuel cycle, safety and radioactive waste, to foster a common approach on nuclear issues, and involve British companies in developing a fourth generation atomic reactor family.

Rolls-Royce is being given a helping hand to play a bigger nuclear role, with a £400m deal with Areva, the French company providing the British reactors, to support work for a new Rolls-Royce factory in Rotherham.

EDF is leading the French invasion with plans to build four plants with a capacity of 6500 MW at a headline cost of £20bn at Hinkley Point in Somerset and Sizewell in Suffolk, in partnership with Centrica, the British Gas parent.

Centrica, which may end up the only British company involved in the nuclear set-up, is concerned about the rising bill and how far the Government is prepared to go in providing incentives for the work to start.

So far, EDF has handed contracts worth £250m to British companies, including a £100m order to prepare the ground for the plant, and has gone out of its way to encourage local as well as major British manufacturers.

Scottish and Southern Energy has pulled out of the NuGeneration consortium, leaving GDF Suez and Spain's Iberdrola, the Scottish Power parent, to build 3000 MW of capacity.

Germany's two big utilities, RWE and E.ON, are partners to build at least 6000MW of plant on two sites but Chancellor Angela Merkel's decision to abandon nuclear power has had the Energy Department seeking reassurances on their commitment.

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