Skip to main content

British Energy and EDF: A Fractious Romance?

pepe-le-pew

The British government, wanting to divest itself of its share of British Energy, had many suitors coming by with flowers and blandishments before it finally succumbed to the Boyer-inflected Pepe LePew of energy companies, Electricite de France. However, we now learn that the rain has washed the white stripe from British Energy’s back and it just looks like a cat:

Reports said the proposed deal - the subject of discussions lasting several months - broke down after two of the UK company's biggest shareholders requested EDF put more money on the table.

British Energy is a key part of plans to boost Britain's nuclear energy production. It is part-owned by the Government which had hoped to sell its stake.

EDF hasn’t left the table and may well end up finding terms agreeable to it.

You may wonder why the government would want to sell its share. Here’s a stab at an explanation from Sky News:

However, the years following its privatisation saw sharp falls in wholesale electricity prices, resulting in losses of nearly £500m in 2002.

In September of that year, the firm faced going to the wall and was only rescued by a £650m public loan.

Banks and bondholders wrote off around £1.3bn in debt in return for control of the group - leaving shareholders with just 2.5% of a newly-created company.

It left the Government holding a 65% share in a business taken out of public ownership less than 10 years earlier.

That’s more than enough to lose me, but it sounds as though the government got itself into a privatization fix this sale will get it out of.

It’d be a real shame if British Energy had to start the bidding process over – assuming it could, given that virtually every European energy outlet has had a look at it – as the United Kingdom has come out fully supporting an expansion of nuclear energy. The new part owner  would likely want a say in how that expansion went forward and which vendors to use for plant design and components.

Of course, the expansion can still happen even if the government fails to sell its share – it’s the waiting game that can hold things up, not the capabilities of one player or another.

Stay tuned.

Pepe and cat. We do not mean to imply that EDF has skunk-like qualities, since it does not, or that it is playing hard to get, which it also is not doing (and which Pepe never did, unless he got spattered in black paint and the cat went after him). We just like Pepe Le Pew and he’s conveniently French.

Comments

Popular posts from this blog

How Nanomaterials Can Make Nuclear Reactors Safer and More Efficient

The following is a guest post from Matt Wald, senior communications advisor at NEI. Follow Matt on Twitter at @MattLWald.

From the batteries in our cell phones to the clothes on our backs, "nanomaterials" that are designed molecule by molecule are working their way into our economy and our lives. Now there’s some promising work on new materials for nuclear reactors.

Reactors are a tough environment. The sub atomic particles that sustain the chain reaction, neutrons, are great for splitting additional uranium atoms, but not all of them hit a uranium atom; some of them end up in various metal components of the reactor. The metal is usually a crystalline structure, meaning it is as orderly as a ladder or a sheet of graph paper, but the neutrons rearrange the atoms, leaving some infinitesimal voids in the structure and some areas of extra density. The components literally grow, getting longer and thicker. The phenomenon is well understood and designers compensate for it with a …

Missing the Point about Pennsylvania’s Nuclear Plants

A group that includes oil and gas companies in Pennsylvania released a study on Monday that argues that twenty years ago, planners underestimated the value of nuclear plants in the electricity market. According to the group, that means the state should now let the plants close.

Huh?

The question confronting the state now isn’t what the companies that owned the reactors at the time of de-regulation got or didn’t get. It’s not a question of whether they were profitable in the '80s, '90s and '00s. It’s about now. Business works by looking at the present and making projections about the future.

Is losing the nuclear plants what’s best for the state going forward?

Pennsylvania needs clean air. It needs jobs. And it needs protection against over-reliance on a single fuel source.


What the reactors need is recognition of all the value they provide. The electricity market is depressed, and if electricity is treated as a simple commodity, with no regard for its benefit to clean air o…

Why America Needs the MOX Facility

If Isaiah had been a nuclear engineer, he’d have loved this project. And the Trump Administration should too, despite the proposal to eliminate it in the FY 2018 budget.

The project is a massive factory near Aiken, S.C., that will take plutonium from the government’s arsenal and turn it into fuel for civilian power reactors. The plutonium, made by the United States during the Cold War in a competition with the Soviet Union, is now surplus, and the United States and the Russian Federation jointly agreed to reduce their stocks, to reduce the chance of its use in weapons. Over two thousand construction workers, technicians and engineers are at work to enable the transformation.

Carrying Isaiah’s “swords into plowshares” vision into the nuclear field did not originate with plutonium. In 1993, the United States and Russia began a 20-year program to take weapons-grade uranium out of the Russian inventory, dilute it to levels appropriate for civilian power plants, and then use it to produce…