Chinese interest in UK Power Reserve

Two Chinese-state-owned power grid companies have expressed interest in acquiring UK Power Reserve.

The company provides back-up electricity to the National Grid at times ofà‚ power shortage.à‚ Chinese state-owned State Grid Corp and China Southern Power Grid are the two companies interested in the Solihull-based firm.
UK Power Reserve
It comes against a background of the UK government stating that it will be stricter on foreign investments of key national assets following the Chinese-backing of the Hinkley Point C nuclear power plant.

China General Nuclear (CGN) is also to develop the Bradwell nuclear power plant outside London. That plant’s arrangements have now come under scrutiny after it was revealed that CGN told the UK’s Office for Nuclear Regulation it could not share material about security measures to protect its nuclear plant in Fangchenggang, China, which Bradwell could be modelled on.

UK Power Reserve has a portfolio of over 800 MW of small-scale, local thermal power generation and battery storage assets.

The decision to sell follows several disposals in recent years of regulated grid businesses by European energy firms seeking to cut debt and raise funds to invest in new infrastructure projects.

The company, which sources said is likely to be valued at less than $670m, has also seen several of its long-term contracts affected by regulator Ofgem’s plan to cut allowances.

Britain’s electricity capacity market pays power producers to make available back-upà‚ powerà‚ at short notice, giving a guaranteed revenue stream on top of the wholesale electricity price.

The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at $21.4m in the financial year ending March 2017.à‚ 

No posts to display