British Energy will have to sell its only non-nuclear plant in EDF deal

BRITISH Energy has raised the "For Sale" sign at its only coal-fired power station under strict EU conditions to sanction a takeover by French suitor EDF.

The East Kilbride-based firm will offload its plant at Eggborough in East Yorkshire to meet a number of hurdles to the £12.4 billion acquisition, unveiled earlier this year.

EDF, the world's biggest nuclear power provider, will also sell off its gas-fired power station at Sutton Bridge in Cambridgeshire as part of the regulations stipulated in the report, which was published yesterday.

The announcements came as the European Commission said it had given conditional approval for EDF's purchase of the Scots nuclear power giant, which produces a sixth of the UK's electricity.

However, approval comes with strings attached, due to the two companies' "overlap" in the UK wholesale and industrial supply markets.

The commission said in its report: "Although the combined entity would not have extremely high market shares, the commission found during its investigation that the transaction, as initially notified, would have been likely to raise serious competition concerns in four main areas."

EDF has committed to sell minimum levels of electricity in the British wholesale market. It will also sell off one site potentially suitable for building a new nuclear power plant located at either Heysham in Lancashire or Dungeness in Kent.

And it said it will end one of the combined group's three grid connection agreements with the National Grid at Hinkley Point in Somerset.

The Eggborough station started producing in 1967 and was acquired by British Energy in 2000, in a bid to give the firm more flexibility.

Its other eight stations – including Torness in East Lothian and Hunterston B in Ayrshire – are all nuclear powered.

EDF's Sutton Bridge power plant that is to be put up for sale supplies 2 per cent of the electricity for England and Wales.

The site, which was built almost ten years ago and is powered by natural gas, is managed under a contract by US firm GE.

BE said in a statement yesterday: "The acquisition remains subject to a number of conditions, as set out in the offer document dated 5 November 2008. Further announcements will be made by British Energy and by Lake Acquisitions Limited in due course."

A spokeswoman for BE added: "We're very pleased that this is a major step forward for new nuclear power plants in the future."

EDF unveiled its offer for BE in September in a deal that will net the UK government some £4bn for its 36 per cent stake. The French majority state-owned utility group has pledged to build four new reactors south of the Border.


Npower hit with £1.8m fine

GERMAN-OWNED power company Npower has been hit with a £1.8 million fine over the mis-selling of energy contracts by door-to-door sales staff.

Energy regulator Ofgem said that it would put forward tougher rules next year to help tackle mis-selling, after finding that Npower had breached conditions of its supply licence.

The watchdog said the company had failed to take adequate steps following complaints from customers about visits by doorstep salespeople.

Although Npower had procedures in place to follow up complaints, company managers had not done enough to apply and improve them, allowing incidents of mis-selling to proceed unchecked, Ofgem ruled.

As a result, the body concluded that Npower had failed in its duty to ensure that it had taken all reasonable steps to fix the matter.