Blighty's nuke-power push stalled as EDF buy falls through

Pension funds affect all our futures

By Lewis Page • Get more from this author

Posted in Financial News, 1st August 2008 08:43 GMT

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The British government plan to build a new generation of nuclear power stations is on hold, after French energy giant EDF's bid to buy the UK's existing nuke base was rejected at the last moment. Reports have it that the deal fell through after existing shareholders in British Energy - thought to be large UK pension funds - demanded more than EDF was willing to pay.

The £12bn acquisition had been seen for some time as a done deal, with the full approval of the government. EDF, which is a major player in the mostly-nuclear French electricity market, was to take over British Energy not so much for its existing plants or expertise, but in order to acquire its nuclear sites. This would avoid much of the red tape, protests and legal disputes that would result from breaking of new ground, and EDF with its French experience would have little difficulty in doing the building.

Now, however, the deal - a vital precursor to the entire plan - appears to have foundered. A British Energy spokesman, quoted by the Financial Times this morning, said:

“Advanced discussions with a party have continued but without agreement to date. A further announcement will be made in due course. There can be no certainty that the discussions will lead to an offer being made.”

Dow Jones quoted an anonymous inside source as saying that “There was a last-minute hitch ... Two UK pension funds – big shareholders – requested EDF put more money on the table, and EDF refused. So British Energy turned the offer down."

There was some doubt, even with EDF on board, whether the new nuke plants could come on line fast enough to meet the government's carbon targets and tackle the UK's looming energy-security issue in a timely way.

Today's news would seem to indicate further delays at the very least. If in fact EDF has walked away from the UK for good, the only hope for the new-nukes programme will be a complicated alliance of several different power companies, some probably based in the US. In that event, even longer delays could be expected. ®

Understand how application security is evolving