EDF could be forced to auction part of its UK power-generating capacity on the open market to clear competition hurdles facing its proposed £12.5 billion takeover of British Energy, The Times has learnt. The measure is one of a number of remedies being discussed between European regulators in Brussels and the French state-controlled energy group.

The European Commission extended a deadline for its competition review of the takeover of Britain’s nuclear generator yesterday. The two-week extension, until December 22, was granted after regulators found fault with certain elements of the deal, which critics claim could harm UK consumers by giving the French group a stranglehold over Britain’s wholesale electricity markets.

EDF has responded by offering concessions to allow it to proceed without recourse to a full European competition inquiry, which could drag on for months. EDF declined to comment on the measures, which are being studied in detail, but they are understood to include forcing it to auction a fixed proportion of the electricity generated by British Energy’s fleet of eight nuclear and one coal-fired power stations.

Such an agreement would allow EDF’s rivals — SSE, ScottishPower, Centrica and industrial and commercial customers— to continue buying baseload power from British Energy on similar terms to previous ones.

The Times revealed in October that EDF was considering the sale of British Energy’s only coal-fired power station at Eggborough, North Yorkshire, as a possible concession to smooth the way for a deal. The Eggborough facility was commissioned in 1966 and is one of the UK’s biggest generators, producing almost 2,000MW of electricity.

Unlike nuclear power stations, coal-fired plants have flexible generating capacity that can be adjusted to meet demand. Disposal of the station or an agreement to auction its generating capacity to other companies would reduce EDF’s control over wholesale pricing in the UK.

However, it is unclear if this would be enough to head off concerns about the creation of such a big, vertically integrated player in the UK power industry and the loss of British Energy, the largest independent player in the wholesale electricity market. The talks are also thought to revolve around an agreement that would force EDF to sell a fixed proportion of its UK nuclear generating capacity.

EDF, the world’s biggest producer of nuclear energy and the fifth-largest electricity supplier in the UK, finally offered to buy British Energy in September after months of haggling over a price.

— EDF is planning a new approach to Constellation Energy Group Inc, the US utility that turned down its previous offer in favour of a rival bid, according to reports yesterday.

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