British Energy (BE) buyer EDF said yesterday it would sell two power stations as part of a deal to gain European approval for its £12.5billion takeover.
French utility giant EDF has agreed to sell its gas-fired power station at Sutton Bridge and British Energy’s coal-fired plant at Eggborough to meet EU stipulations.
The announcements came as the European Commission said it had given conditional approval for EDF’s purchase of nuclear power giant British Energy, which produces one-sixth of the UK’s electricity.
EDF has also committed to sell-in minimum levels of electricity in the British wholesale market, while it will dispose of one site potentially suitable for building a new nuclear power plant, at either Heysham or Dungeness.
It has said it will end one of the combined group’s three grid connection agreements with the National Grid at Hinkley Point.
The Eggborough site put up for sale was built between 1962 and 1970 and was acquired by BE in 2000. The station generates 1960 megawatts (MW) of electricity and comprises four 500MW coal-fired units.
BE is predominantly a nuclear power group, but bought the coal-fired site to offer it greater flexibility.
EDF’s Sutton Bridge power plant being put on the market supplies 2% of the electricity for England and Wales. The gas-powered site, built almost 10 years ago, is managed under a contract by GE.
EDF unveiled its offer for British Energy in September in a deal that will net the UK Government more than £4billion for its 36% stake and kick-start a wave of new UK plants.
France’s majority state-owned utility group has promised to build four new reactors in the UK with the potential to generate electricity to meet more than 13% of the UK’s forecasted energy demand by the early 2020s.
EDF said it wanted to construct and operate two reactors each at existing BE sites at Hinkley Point and Sizewell.
It also plans to sell a 25% stake in the new BE to Scottish Gas parent Centrica, which aims to secure a power-sharing arrangement once the takeover is complete.
EDF is set to complete the takeover early next year, with only a few minor conditions that now have to be overcome, including a technical share transfer by the government. The deal marks one of the largest direct foreign investments in Britain.
Energy Minister Mike O’Brien said: “Clearance by the competition authorities is an important milestone for the transaction.
“We are pleased that the commission, following rigorous investigation of the transaction, has been able to agree a package of measures with EDF to address any competition concerns and enable the deal to proceed.”
BE employs 6,000 staff and has eight nuclear power stations at Dungeness, Hartlepool, Heysham 1 and 2, Hinkley Point B, Hunterston B, Sizewell B and Torness.