RWE has hired Goldman Sachs to conduct a strategic review of Npower in light in the group’s massive debts of EUR27bn ($39bn) and the likely need for heavy investment in cleaner generation under a low-carbon energy policy in the UK.
Npower supplies about 6.8 million British homes and generates about 8 per cent of the UK’s electricity.
Tim Yeo, chairman of the UK’s Energy and Climate Change Select Committee, described the potential sale as “worrying” in highlighting the UK’s problem in attracting investment in the power industry.
“We may find we just don’t have enough generator capacity in this country,” he told the Daily Telegraph newspaper.
Spanish power group Iberdrola is a likely buyer for Npower, according to UK newspapers.
Chris Huhne, the UK’s Energy Secretary, is due to publish this month the final version of government’s energy white paper, which aims to achieve a £200bn ($320bn) overhaul of the industry, replacing fossil fuelled stations with nuclear and wind generation.
Nine coal fired plants that contribute 15 per cent of the UK’s power capacity are already due to close by 2015 under an EU directive, according to the UK’s Sunday Times.
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