Monopoly concerns raised over Centrica and EDF's nuclear deal
Scottish and Southern Energy chief executive Ian Marchant yesterday said Centrica’s plan to buy a 20% stake in British Energy from EDF could create a monopoly in the UK wholesale energy market.
Marchant stopped short of calling regulators to block the deal, but told The Times he was concerned that Centrica and EDF’s joint venture would give the companies undue control over energy market pricing and competition.
EDF and Centrica announced plans to set up a nuclear power joint venture on 1 May. It which will generate electricity from British Energy’s fleet of nuclear power plants and will build at least four reactors, with the first of these scheduled to start producing electricity in 2017.
EDF and Centrica will use available power from the British Energy fleet of nuclear reactors based on their respective 80% and 20% shareholdings. EDF will also supply Centrica with an additional 18 terawatt hours of power at market prices for five years from 2011.
Centrica secured the deal with EDF by offering £1.1bn and a 51% stake in Belguim’s second largest energy generator SPE in exchange for the 20% British Energy share.
Marchant was speaking as Scottish and Southern unveiled a 2% rise in 2008-09 profits to £1.25bn and forecast growth in profits, dividends and customers in 2009-10.
The company also announced plans for new power developments, including a gas-fired power station in Wales and a wind farm in the Shetlands.
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