£12bn energy deal collapses
Aug 2 2008 by Iain Laing, The Journal
THE UK’s nuclear power strategy has been thrown into confusion after a takeover of generator British Energy collapsed at the 11th hour.
The £12bn swoop on the owner of all eight UK nuclear plants including Hartlepool by state-owned EDF of France had been seen as a key step towards the proposed construction of new nuclear power plants in the UK.
But EDF’s hopes of unveiling a takeover deal early yesterday were dashed when two of British Energy’s biggest City shareholders reportedly called for a higher price tag to reflect rising energy prices.
The Government, which owns 36% of British Energy and had been prepared to accept the EDF offer price, said it was disappointed by the developments but insisted the country’s energy plans did not hinge on one deal.
EDF said it still wanted to play a role in the renaissance of nuclear power in the UK, but did not say whether British Energy remained part of that strategy. It is not known if the two parties have remained in talks.
EDF’s expertise in the sector made it the most likely bidder for British Energy. The Government recently highlighted the role of the private sector in funding and delivering new nuclear power stations, as part of its broader target to cut carbon dioxide emissions by at least 60% of 1990 levels by 2050.
It is thought the Government could revert to its back-up plan of forming joint ventures with several different energy companies to build new nuclear reactors in the UK. Business secretary John Hutton said British Energy had potential sites available for development and that sites were available from the Nuclear Decommissioning Authority.
He added: “The level of interest in nuclear new build in the UK from EDF and from other operators remains high. Recent developments in energy markets underline the need for new nuclear to combat high fossil fuel prices, climate change and security of supply.”
FTSE 100 Index-listed British Energy first announced talks with potential suitors in March.
It is thought the proposed deal with EDF involved British Gas owner Centrica taking on a minority stake of around 25% in the business.
The UK Government’s 36% holding stems from its involvement in a rescue of the company six years ago.
