Electricite de France looks to buy two more power stations

French power conglomerate Electricite de France is expected to acquire a further two UK power stations and at least one more supply business before it launches a partial flotation of its British interests – possibly towards the end of the year. EdF, which owns London Electricity and the power supply business of Sweb in the […]

French power conglomerate Electricite de France is expected to acquire a further two UK power stations and at least one more supply business before it launches a partial flotation of its British interests – possibly towards the end of the year.

EdF, which owns London Electricity and the power supply business of Sweb in the west of England, is now the leading contender to buy two gas-fired plants being sold by PowerGen – the 1,350MW station at Connah’s Quay in north Wales and the 680MW unit at Rye House in Hertfordshire.

Acquiring these stations looks like taking precedence over a plan to swap the output of some coal-fired plants owned by TXU, formerly Eastern Electricity, for the output of some of EdF’s nuclear units in France. This was considered to be an attractive option for the French company as it could have defused much of the recent criticism of France among EU countries for failing to open its power market to competition.

However, it would seem the attraction of two new, less environmentally polluting, gas-fired stations has outweighed the advantages of the TXU deal.

A spokesman for EdF would not comment on the company’s preference at this stage but said it would need to expand its `critical mass’ as an integrated electricity company before any flotation of a minority stake in the UK business took place.

`We are still very eager to grow our position in the energy industry, and we are looking to expand in all areas,’ he said.

Power generation is where EdF has its biggest deficiency in the UK market. It has only one plant of any consequence – the 790MW gas-fired unit at Sutton Bridge in Lincolnshire that it bought recently from Enron.

The two PowerGen stations would bring EDF’s capacity up to the 2,500MW mark generally considered by the industry to be the minimum required to be a leading market player.

The comparable benchmark for a supply business is 5 million customers. London Electricity and the Sweb supply business give EdF a total of 3.3 million, so the purchase of at least one more supply operation before the end of the year is also a possibility.

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