French power giant eyes more UK plants

Electricite de France (EdF) is close to agreeing terms to take over three large, coal-fired UK plants, in a deal that would make the French monopoly one of the biggest generators in Britain. The UK plants to be taken over if the proposed deal with US-owned electricity group TXU goes ahead are likely to include […]

Electricite de France (EdF) is close to agreeing terms to take over three large, coal-fired UK plants, in a deal that would make the French monopoly one of the biggest generators in Britain.

The UK plants to be taken over if the proposed deal with US-owned electricity group TXU goes ahead are likely to include the 2,000MW West Burton coal-fired station in Nottinghamshire, the 1,000MW plant at Ironbridge, Shropshire, and the Rugeley station in Staffordshire. EdF already owns London Electricity and the supply business of Sweb in south-west England.

The plan will need to be approved by industry regulator Ofgem and the Office of Fair Trading. An Ofgem spokesman said the regulator has yet to receive formal notification of the planned deal via the OFT but that there would be three areas of potential concern.

The first would be that EdF would exceed its permitted generating limit as a UK regional supplier and distributor. The firm inherited a 13.5% stake in a 1,100MW power plant in Barking, east London, when it bought London Electricity, and recently acquired the 790MW Sutton Bridge station in Lincolnshire through its main UK subsidiary.

Ofgem would also require assurances that power from any further plants EdF bought would be sold `externally’ and not to the company’s 3.3 million captive UK customers through LE or Sweb.

The final issue would be the potential loss of competition in the British power generation market should the move lead to TXU pulling out of the UK.

TXU, formerly Eastern Group, was originally expected to involve a long-term output swap with nuclear plants of comparable capacity in France. However, it is believed TXU insisted on the sale of at least one of its plants for the transaction to go ahead.

A TXU spokesman said the company is in talks with a number of potential buyers and a decision will be made by the end of June.

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