THE government will launch the auction of land set aside for new nuclear-power stations within two weeks, setting into motion a process that is expected to be hotly contested by Europe’s biggest energy companies.

RWE and E.ON of Germany, Swedish giant Vattenfall and Scottish Power owner Iberdrola are all expected to choose investment banks to advise them on the bidding shortly.

The auction is expected to net several hundred million pounds for the shareholder executive which represents the government’s holding in the sites. Scottish & Southern is expected to seek a partnership with one of the more established nuclear players.

The Nuclear Decommissioning Authority, owner of the three sites – at Wylfa, in North Wales, Bradwell in Derbyshire and Oldbury in the West Midlands – has instructed UBS to lay out the bidding terms and timeline for the auction within the next two weeks.

Bidders will be seeking clarity on a few key sticking points. One is compensation. To build new power stations on any of the three sites, companies will need planning permission.

Winning bidders expect to pay a small, upfront fee to take the land, but not make the bulk of the payment until they receive planning approval.

The government wants the process to run parallel to the new-build programme that EDF Energy plans to start once its takeover of nuclear operator British Energy is approved.

The company expects European Commission approval for the £12.5 billion deal around the turn of the year.

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