The government said yesterday it was selling a £2.2bn stake in nuclear power generator British Energy as the company announced a sharp rise in profits and its first dividend since a state-backed rescue operation in 2002.
Under an accelerated sale process which began yesterday morning and closes this afternoon, 400m shares are being offered to institutional investors.
The sale will cut the government's 64% stake, acquired at the time of the 2002 bail-out, to 39% but the Department of Trade and Industry said it was committed to keeping a holding of at least 29.9%.
Trade and industry secretary Alistair Darling said the money raised from the sale of the stake would be used to help finance the clean-up of British Energy sites as existing nuclear plants are closed down.
British Energy is already looking at potential partners to develop its existing sites for new nuclear generation and said yesterday that it had been surprised at the extent of the interest which had been generated.
The decision to sell the British Energy stake comes as the government launches its public consultation on energy policy and was immediately criticised by Greenpeace UK. Ben Ayliffe, the organisation's senior climate and energy campaigner, said: "Before making any decision on whether to press ahead with new nuclear power stations the government is legally obliged to consult fully with the public. But if they intend to do this, why are they priming the energy market for nuclear before the consultation has even started?"
The chancellor, Gordon Brown, first announced that the government intended to reduce its holding in British Energy in March last year.
Yesterday the DTI defended the timing of the sale, arguing that it would reduce the reliance of the nuclear liabilities fund, which finances the clean-up programme, on British Energy's fortunes. A spokesman added: "[The sale] has no connection with the nuclear consultation about new build. It is about the company and its structure now."
British Energy, which produces up to a fifth of Britain's electricity needs from its eight nuclear and one coal-fired plant, said earnings before interest, tax, depreciation and amortisation had risen from £846m to £1.2bn in the year to the end of March.
Although output fell from 68.4 terrawatt hours to 58.4 terrawatt hours, because of higher unplanned cuts at three nuclear plants, the price at which British Energy sold its electricity was 38% higher than the previous year. Chief executive Bill Coley said he expected the company would have "a far better year ... in delivering output" in 2007/08.
The company said it was pressing ahead with plans to seek permission to extend the life of its Hinkley Point B and Hunterston B plants, the two nuclear plants closest to their planned closure dates.
In a separate development RWE said it was to go ahead with plans to build a £600m gas-fired power station at Staythorpe in Nottinghamshire.
Originally it had said it was planning to build a new plant at either Staythorpe or Pembroke in South Wales. However yesterday RWE said it was still considering building the South Wales plant, despite giving the go-ahead to the Nottinghamshire development. The company is also considering building two clean coal plants, which would cost more than £1bn each, but has yet to make a decision on nuclear power.
Andy Duff, chief executive of RWE npower said: "With a quarter of UK power plants due for closure over the next 10 years, it is vital that generators commit to the construction of large-scale plants to ensure the UK has a secure, affordable electricity supply into the future."
Backstory
British Energy was privatised in 1996 but in September 2002, hit by sharp falls in the wholesale price of electricity, it was forced to ask the government for financial help or face the risk of going into administration. The government agreed to provide a £650m loan and took on many of the group's clean-up liabilities. As part of the rescue package, eventually approved by Brussels, the government effectively acquired ownership of 64% of British Energy's equity.
Under an accelerated sale process which began yesterday morning and closes this afternoon, 400m shares are being offered to institutional investors.
The sale will cut the government's 64% stake, acquired at the time of the 2002 bail-out, to 39% but the Department of Trade and Industry said it was committed to keeping a holding of at least 29.9%.
Trade and industry secretary Alistair Darling said the money raised from the sale of the stake would be used to help finance the clean-up of British Energy sites as existing nuclear plants are closed down.
British Energy is already looking at potential partners to develop its existing sites for new nuclear generation and said yesterday that it had been surprised at the extent of the interest which had been generated.
The decision to sell the British Energy stake comes as the government launches its public consultation on energy policy and was immediately criticised by Greenpeace UK. Ben Ayliffe, the organisation's senior climate and energy campaigner, said: "Before making any decision on whether to press ahead with new nuclear power stations the government is legally obliged to consult fully with the public. But if they intend to do this, why are they priming the energy market for nuclear before the consultation has even started?"
The chancellor, Gordon Brown, first announced that the government intended to reduce its holding in British Energy in March last year.
Yesterday the DTI defended the timing of the sale, arguing that it would reduce the reliance of the nuclear liabilities fund, which finances the clean-up programme, on British Energy's fortunes. A spokesman added: "[The sale] has no connection with the nuclear consultation about new build. It is about the company and its structure now."
British Energy, which produces up to a fifth of Britain's electricity needs from its eight nuclear and one coal-fired plant, said earnings before interest, tax, depreciation and amortisation had risen from £846m to £1.2bn in the year to the end of March.
Although output fell from 68.4 terrawatt hours to 58.4 terrawatt hours, because of higher unplanned cuts at three nuclear plants, the price at which British Energy sold its electricity was 38% higher than the previous year. Chief executive Bill Coley said he expected the company would have "a far better year ... in delivering output" in 2007/08.
The company said it was pressing ahead with plans to seek permission to extend the life of its Hinkley Point B and Hunterston B plants, the two nuclear plants closest to their planned closure dates.
In a separate development RWE said it was to go ahead with plans to build a £600m gas-fired power station at Staythorpe in Nottinghamshire.
Originally it had said it was planning to build a new plant at either Staythorpe or Pembroke in South Wales. However yesterday RWE said it was still considering building the South Wales plant, despite giving the go-ahead to the Nottinghamshire development. The company is also considering building two clean coal plants, which would cost more than £1bn each, but has yet to make a decision on nuclear power.Andy Duff, chief executive of RWE npower said: "With a quarter of UK power plants due for closure over the next 10 years, it is vital that generators commit to the construction of large-scale plants to ensure the UK has a secure, affordable electricity supply into the future."
Backstory
British Energy was privatised in 1996 but in September 2002, hit by sharp falls in the wholesale price of electricity, it was forced to ask the government for financial help or face the risk of going into administration. The government agreed to provide a £650m loan and took on many of the group's clean-up liabilities. As part of the rescue package, eventually approved by Brussels, the government effectively acquired ownership of 64% of British Energy's equity.
Blogalaxia Tags: UK,Reino Unido
British Energy,
United Kingdom, 
nuclear energy, 
Gordon Brown
British Energy,United Kingdom, nuclear energy, Gordon Brown
