HomeWorld RegionsEuropeFrench dole out UK $400 Million for British power plant

French dole out UK $400 Million for British power plant

Oct. 16, 2000 (Knight Ridder/Tribune)à‚–State-owned French power giant Electricite de France (EdF) today swooped on one of Britain’s biggest power stations to boost its share of Britain’s generation capacity to 7.6 percent.

The nationalised company, owner of London Electricity and the electricity supply business in the West Country, is paying Powergen UK $398.3 million cash for the huge 2000 MW coal-fired Cottam plant in north Nottinghamshire.

The deal means that generation capacity controlled by EdF provides power to nearly two million homes, around one in 13, in Britain. Before today’s deal, it accounted for 4.5 percent of the market, mainly through its electricity Interconnector under the Channel, which provides power from its chain of nuclear power stations in northern France.

The buy will be seen as a bold and provocative move by rivals in Britain. EdF has made no secret of its desire to be a leading player in UK generation and supply, yet its domestic market remains closed almost entirely to British competitors. Other bidders interested in buying Cottam are believed to have included Centrica and Scottish & Southern Electricity.

EdF sources indicated it would look to buy further power stations to take its share of the generation market over the 10 percent mark. It owns already the Sutton Bridge plant in Lincolnshire and a 13.5 percent share of a 1000MW plant in Barking, Essex.

Bruno Lescoeur, London Electricity chairman and chief executive, said: “Given its size and operational flexibility, Cottam is an important addition to our generation port-folio. Our aim is to build a vertically integrated business strong on generation and supply, and this acquisition is a further step towards achieving our ambition of becoming a major player in the UK energy industry.”

At least two other Powergen power stations are currently up for sale, Connah’s Quay in north Wales and Rye House in Leicestershire, but the value of power capacity in Britain is falling rapidly. Today’s deal is equivalent to UKpound 200,000 per megawatt of capacity compared with a rate of about UKpound 325,000 last year.

Powergen said it was selling the 30-year-old Cottam plant to reduce debt built up through its acquisition of US energy company LG&E. Last year Cottam produced net operating profits of UKpound 82.1 million.

All 166 staff will transfer to London Electricity on completion, expected by the end of the year.

The disposal will reduce Powergen’s share of generation to around 10 percent . It had more than 30 percent at privatisation in 1990.

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(UK pound preceding a numeral refers to the United Kingdom’s pound sterling.)

à‚© 2000, Evening Standard, London. Distributed by Knight Ridder/Tribune Business News.

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