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The Government’s plans for a rebirth of its nuclear industry were in jeopardy last night after France’s biggest energy company said at the eleventh hour that it was pulling out of a deal to take control of the sector.
EDF, the French state-controlled electricity company, had been widely expected to announce a £12 billion takeover of British Energy, the nuclear generator, this morning.
But shortly before midnight it released a statement saying that conditions were not right for “a major development in Great Britain”.
The takeover of British Energy, which operates eight ageing nuclear power stations and produces one sixth of Britain’s electricity, was seen as critical to the Government’s plans to replace the country’s reactors. It owns 35 per cent of British Energy. EDF had proposed building four nuclear power stations using French technology.
Centrica, the owner of British Gas, had also been expected to take part in the deal by acquiring a 25 per cent stake in British Energy from EDF.
The surprise announcement by EDF — it had been reported earlier in the evening that its board had agreed the deal — leaves the Government facing the prospect of its nuclear plans being delayed by years.
It was unclear last night what had prompted the decision to withdraw, other than last-minute wrangling over the terms of the deal. A government source said last night that British Energy emerged from a board meeting to say that the deal was off. Another source close to the deal said that the company had last-minute reservations about the terms.
The Government had pinned its hopes on the sale as a way of encouraging a building programme to replace ageing reactors. Many of its nuclear and other power plants are due to be retired from service.
If the deal cannot be revived with EDF, or another bidder be persuaded to enter the frame then the Government could be forced to create a series of smaller deals to build individual stations, which is likely to be highly complicated, expensive and drawn-out. John Hutton, the Business Secretary, said in March that nuclear power could be Britain’s biggest energy asset since North Sea oil and gas.
The Department for Business, Enterprise and Regulatory Reform had said last night that it was “watching events closely”, adding that the Government’s commitment to nuclear power was unswerving.
A spokeswoman said: “Our commitment to nuclear power is clear. The go-ahead for new nuclear power, alongside our action to promote energy saving and renewables is in Britain’s long-term national interest.
“The level of interest in nuclear new build remains high and recent months have shown there are strong signals of an appetite for this from the market. Recent developments in energy markets underline the need for nuclear build to combat high fossil fuel prices, climate change and security of supply.
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Why do we need to have investment from France when we have the talent and resources in the UK? We are only setting ourselves up for being at the mercy of yet another country for our fuel requirements and I'm really not sure our wallets will be able to take the strain.
Tina, Jersey, UK
Many years ago when energy was found in the North Sea there was debate on what we should do with the income generated. One of the proposals was a Severn tidal barrage. What happened, as with all governments - too short sighted & frittered the money away rather than investing for the future.
Alan Bevan, cardiff,
I feel ashamed to read that we no longer have the ability to build our own nuclear power stations.
WE built the Magnox stations which have served us very well. But then they had the advantage of producing the Bomb as a bye product.
Ronald John Bentham, Nantwich, UK
if the government want to build more, they need to start looking at our own power companies (most no longer owned by the UK) and make them invest their huge profits into alternative power sources, we'd all be better off bringing these companies back under British Public Control we give too much away
Jason Horn, Berkhamsted, Herts
We have hundreds of years worth of coal which could have been used with the latest 'Clean Burn' technology. We can't do that now as most of the mines are closed, and no longer on a care and maintenance regime.
This was the price we paid so that Maggie Thatcher could break the miners unions.
David Glen, Glasgow, Scotland
you have got it wrong: according to Reuters and the FT EDF refused to stump up for pensions (not suprising given their Etat de providence mentality i.e. basically communism but they are kidding themselves) and BE turned them down. Very sensible, did you see EDF's UK price rise!? Extorsion!!!!!!
sophia, brighton,
Let's ignore the Large Incinerator Plants Directive from the EU and keep our coal fired staions such as Drax in operation until such time as we build new. Oh and forget about carbon capture and sequestration: non existent, non-practical, time wasting, expensive.
DennisA, New Quay,
Why not get the Japanese to build nuclear power stations. They have alot of expertise
in Nuclear power as most of their electicity
comes from it. If they brought the Japanese
into equation I suspect the French would be back knocking on the door.
Barry Holmes, Christchurch, New Zealand
Good. The way forward is *not* by selling Britain's strategic infrastructure to foreign interests.
Terry Dell, Weybridge, UK
Perhaps EdF reckoned that they were onto a hiding to nothing. Interminable planning processes, opposition in Parliament and inevitable protests from the Green brigade could be counted on - hardly an attractive prospect. Much easier from their point of view to build & supply the UK from France.
Nick, Brit in France, St Ouen, France
Why does the UK need French technology.The billions of pounds used to prop up the NR would have gone a long way I would have thought.Anyway,how about using the coal reserves instead of generating electricity from gas.
stephen hulton, eure, france
Brown in his wisdom as Chancellor sold our one international nuclear company, WESTINGHOUSE, to the Japanese company TOSHIBA. This to bolster his unlimited spend programme. Not only did he sell our gold off cheap but the familly silver as well. A good decision Gordon!!!. to ensure future energy need
M. Butcher, W-s-M, England
Effective government long term planning a disaster, crime and illegal immigration out of control for years, housing market in a financial mess, youngsters, including women and girls running amok with guns and knives on British streets,. Where is the Great Britain of my youth?
B J Deller, Marbella, Spain
"nuclear power could be Britains biggest energy asset since North Sea oil and gas."
but i thought oil and gas would save us? that's what was said at the time - another dithering moment. let's just put our faith in the russians for gas and the arabs for oil, they're our friends, aren't they???
Philip Barnes, preston, england
Letting foreign powers have control of potential nuclear weapons in our own country is a flawed policy, and is traitorous. Thats why its time to promote Patriotism, before our country is extirpated.
Chris, Ely, England
Yeah. 'Cos they're making far too much money in gas and electricity. Why kill the golden goose? This government is a joke. Now even the french are running rings around us.
Kevin, Maidstone,
You've got the story wrong. It was British Energy who turned down the offer, not EDF who backed out.
James, Penzance, Cornwall
someone, or rather lots or someones are going to be sitting in the dark in a few years to come. As a Brit living abroad, why haven't you been building clean coal and nuclear power stations ? Oh thats right, you think renewables are going to do it for you. Think again.
Roy Winn, Brooklyn, NY, USA
Until 2006 BNFL owned Westinghouse Electric Company, but that year sold it to Toshiba.
Westinghouse makes nuclear power stations. Oops! Still, what do you expect, this is Britain after all.
Michael Smith, Southampton, UK
Selling the country for a mess of pottage.
david, Braintree,
The Japanese, Americans, Russians and UK have huge nuclear industries. Why not buy one reactor from each of them. Then build the other 10 from the best design of the three.
ps. they can put the Russian one in Kent.
Mike, Manchester, uk
Probably a good move from EDF's viewpoint.
Assorted British fantasists such as those who want renewables only or those who think we should go for a 'British' option would likely have killed profits.
France is the only option for keeping the lights on - we can't even manage to sell up.
David Martin, Bristol,
The French made a sensible and strategically correct decision to focus on nuclear power for their needs when they had no fossil fuel reserves. Britain, again correctly, used its access to the North Sea to provide its energy for 3 decades. Britain now faces the same problem as the French did.
ian, stratford, uk
Is it a wise move to allow this countries energy to belong to a foreign country?
Instead of wasting vast sums on military why does our government not put this into building our country up so we once again have our own resources and a manufacturing industry.
Surely with the EU we dont need defense.
joe, Edinburgh, Scotland
Why does the UK need France to take care of its Nuclear Plants?? Where are the British scientists and companies??? Since when does the UK rely on France????
MK, Oklahoma, USA
What do you expect from a french state owned power generator. Ultimately their best interests are served by investing in french plant and jobs and exporting french energy into a market created by buying their way into the UK energy market.
Paul Hatch, Axbridge, UK
Given a doubling of US nuclear plants costs since last June,
and the lack of a standard design for regulators to evaluate,
and the forecast of ongoing energy-cost rises pushing steel, concrete & transport costs still higher,
it seems plain that no credible costing exists, so why invest in nuclear ?
L Cleverdon, Elan, Wales
the windfall tax hasnt even been approved yet and its already had its first casualty. why cant british energy develop its own new nuclear power stations, if its a viable business proposition there must be funding available.
Just keep stupid nimbys out of the decision making process.
will, Grimsby, uk
Quite clearly EDF does not think that the British Government is serious about nuclear power or anything else. This and previous governments have not developed a energy policy beyond use all of the gas in the North Sea and hope the something will turn up, when the gas runs out! A great policy!
Tony Spurgin, San Diego, CA, USA
I wonder how this might affect national energy in the relatively near future. There is little doubt that nuclear power is a necessity in providing sufficient energy to a country such as the UK, but there are compromising issues surrounding its provision.
Marcus, Edinburgh,
Howmuch dithering will go on until the UK moves into generation deficit with regular blackouts and resulting social unrest a regular feature of UK life?
Ian, Bristol,
We no longer have a Department of Energy with the whole thing spread between indifferent RDA's and no one pays £12 billion when they can sit and wait for the whole thing to fall into their hands. If the business has no local support, then stepping back is the correct and very businesslike decision.
Chris Coles, Medstead, Alton, United Kingdom