EDF snaps up 'nuclear' land

By Ed Crooks and Rebecca Bream, Financial Times, May 9 2008

EDF, Europe's biggest power company, has been quietly buying land around nuclear sites in England and Wales, putting itself in a position to build power stations even if it fails in its attempt to buy British Energy, the nuclear generator.

The stealthy purchases in Somerset and Anglesey could make it possible for EDF to build up to three power stations regardless of the fate of British Energy. But they are likely to raise concerns among local residents and green campaigners about the possible expansion of the nuclear sites.

Today is the official deadline for bids for the government's 35 per cent stake in British Energy, and both EDF and RWE of Germany are likely to make an offer. Buying the stake would trigger a bid for the entire company.

British Energy has been seen as having a unique strategic position to benefit from the UK 's nuclear renaissance because it controls most of the most attractive sites for new reactors.

However, the Financial Times has learnt that while EDF has been working on its bid, it has also been quietly buying farmland close to two nuclear sites: Wylfa on the island of Anglesey in north Wales, which is owned by the government's Nuclear Decommissioning Authority, and Hinkley Point in the south-west of England, which is owned by the NDA and British Energy.

EDF has not yet begun what would be a long process of applying for permission to build reactors on the land it has bought. However, the land deals create a viable if not complete alternative to buying British Energy.

The land around Hinkley Point, seen as one of the UK 's most attractive nuclear sites, would have enough space for EDF to build one of its European pressurised reactors.

Land that could be made available at the existing nuclear site could create space for a second EPR. The land at Wylfa, together with other land that could be released by the NDA, would create enough space to build a third.

EDF wants to build up to five of those reactors in the UK by 2025, so it could take a significant step towards this without buying British Energy.

EDF and RWE are still the front-runners to bid for the UK 's biggest nuclear generator, with Centrica of the UK and Iberdrola of Spain interested in taking junior stakes.

People close to the deal said that today's deadline for bids, set by Rothschild, British Energy's adviser, could slip if the company receives disappointing levels of interest.

Eon of Germany, Vattenfall of Sweden and Suez of France had been in discussions with British Energy but have decided against bidding for the company at this stage.

Both EDF and RWE have been stressing that they would not overpay. Both companies refused to comment.

One person close to the sale process admitted that British Energy was not expecting offers as high as the current share price, which closed yesterday at 715p, and that a price closer to 700p was more realistic.

The British Energy share price has fallen from a peak of 785p last month as hopes for a bidding war have faded.

http://www.ft.com/

 

Stop Hinkley Logo

 

 

 

 

 

 

 

Page Updated 09-May-2008