Hitachi expects SNC Lavalin will have role in building UK nuclear plants

MONTREAL—Canadian engineering and construction giant SNC-Lavalin will likely have a role in helping to build nuclear power plants in Britain after Hitachi announced a $1.1-billion deal to acquire Horizon Nuclear Power.

A London-based spokeswoman for the Japanese company described SNC-Lavalin as a “valued partner” that Hitachi has worked with on many projects around the world.

“Due to SNC-Lavalin’s nuclear construction expertise, Hitachi would expect them to have a role in the construction of the sites, but nothing has been confirmed as of yet,” Georgia Lewis of public relations firm Kreab Gavin Anderson wrote in an email.

Reports in Britain described the buyers as a consortium of Hitachi and SNC-Lavalin, but spokeswoman Leslie Quinton declined to say what role Montreal-based SNC will have in the Horizon deal, citing a confidentiality agreement.

SNC-Lavalin has been involved in the nuclear industry since 1967 and purchased Atomic Energy of Canada’s commercial reactor division last year from the Canadian government for $15-million and royalty payments for future projects.

In a news release, Hitachi failed to mention SNC-Lavalin by name but said it will “co-operate with other nuclear energy related companies around the world.”

Frederic Bastien of Raymond James said that suggests SNC many not be the only one talking to Hitachi.

“It’s unclear at this time how involved SNC would be and whether it is investing funds in Horizon (its contribution to the joint venture) may come in the form of engineering and construction services only,” he wrote from Vancouver.

Hitachi said British companies Babcock International and Rolls-Royce have signed memorandums of understanding to join efforts to plan and build the nuclear plants.

Hitachi is buying Horizon from Germany’s E.On and RWE, which put the company up for sale in March after its home country moved to abandon nuclear power in the wake of Japan’s Fukushima disaster.

It reportedly beat a rival bid by Toshiba subsidiary Westinghouse Electric Co.

“Today starts our 100-year commitment to the U.K. and its vision to achieve a long-term, secure, low-carbon and affordable energy supply,” said Hitachi president Hiroaki Nakanishi.

Hitachi said it will seek to secure regulatory approval, share its nuclear business policy with Horizon employees and work with British companies to create a strong nuclear power company.

The company and its partners plan to build two to three 1,300-megawatt plants at each of Horizon’s sites in Wylfa, Anglesey, and Oldbury, Gloucestershire.

The first plant would come on stream by 2025.

It will use Hitachi’s Advanced Boiling Water Reactor technology, which is in operation at four nuclear plants in Japan.

Hitachi said it is the only advanced nuclear technology in operation in the world.

The new owners expect up to 6,000 direct jobs will be created at each site during the construction phase, and another 1,000 permanent jobs per site to operate the facility.

It will transfer its modular construction technology to build the nuclear sites on time.

Prime Minister David Cameron called the Hitachi deal “a decades-long, multi-billion pound vote of confidence in the U.K. that will contribute vital new infrastructure to power our economy.”