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

A Billion Miles Under Nuclear Energy (Updated)

And the winner is…Cassini-Huygens, in triple overtime.

The spaceship conceived in 1982 and launched fifteen years later, will crash into Saturn on September 15, after a mission of 19 years and 355 days, powered by the audacity and technical prowess of scientists and engineers from 17 different countries, and 72 pounds of plutonium.

The mission was so successful that it was extended three times; it was intended to last only until 2008.

Since April, the ship has been continuing to orbit Saturn, swinging through the 1,500-mile gap between the planet and its rings, an area not previously explored. This is a good maneuver for a spaceship nearing the end of its mission, since colliding with a rock could end things early.

Cassini will dive a little deeper and plunge toward Saturn’s surface, where it will transmit data until it burns up in the planet’s atmosphere. The radio signal will arrive here early Friday morning, Eastern time. A NASA video explains.

In the years since Cassini has launc…

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 Nuclear Plant Closures Are a Crisis for Small Town USA

Nuclear plants occupy an unusual spot in the towns where they operate: integral but so much in the background that they may seem almost invisible. But when they close, it can be like the earth shifting underfoot.

Lohud.com, the Gannett newspaper that covers the Lower Hudson Valley in New York, took a look around at the experience of towns where reactors have closed, because the Indian Point reactors in Buchanan are scheduled to be shut down under an agreement with Gov. Mario Cuomo.


From sea to shining sea, it was dismal. It wasn’t just the plant employees who were hurt. The losses of hundreds of jobs, tens of millions of dollars in payrolls and millions in property taxes depressed whole towns and surrounding areas. For example:

Vernon, Vermont, home to Vermont Yankee for more than 40 years, had to cut its municipal budget in half. The town closed its police department and let the county take over; the youth sports teams lost their volunteer coaches, and Vernon Elementary School lost th…