Centrica acquires stake in EDF's UK nuclear portfolio

EDF Group and Centrica plc announced today that they have reached a definitive agreement whereby Centrica will invest in EDF’s nuclear business in the UK. The agreement covers both the current British Energy nuclear power station fleet and the development and construction of the next generation of nuclear power stations.

Centrica is investing £2.3 billion to acquire a 20 per cent. interest in British Energy, the operator of eight existing nuclear power stations of which EDF acquired control in January 2009. EDF and Centrica will also form an 80/20 joint venture to pursue a planned programme to build four new nuclear power stations in the UK. Finally, the EDF Group will acquire Centrica’s 51 per cent. stake in Belgian generation and supply business SPE.

“This transaction, part of the group’s strategy of developing its positions in Europe, will enable leading British generator, Centrica, alongside EDF, to take part in the re-launch of nuclear energy in the United Kingdom through an industrial partnership in a form already pioneered by EDF in China and the US,” said Pierre Gadonneix, Chairman and CEO of EDF. ” This transaction will also help balance both the generation and supply businesses of EDF Energy. The asset swap in this deal will also see the EDF group reinforce its Benelux presence by becoming the second-largest generator in Belgium.”

Today’s announcement also comes on the heels of a new Government programme to deploy smart meters across the UK by 2020. Alex Lambie, founder of greenhelpline.com, had critical words for both developments.

“It is no coincidence that these announcements came on the same day,” Lambie said. “The Government is desperate to show it is taking a holistic approach to tackling the many issues surrounding the energy market.  But In reality, it’s selling our future for some easy short-term gains.”

Lambie added, “As every energy expert not sponsored by a supplier or generator will tell you, the biggest priority for UK energy in tackling climate change and securing future energy security is the decentralisation of generation and consumption, i.e. taking homes away from grid dependency. I’m in no doubt smart meters will be very useful in enabling accurate monitoring of electricity usage, which in turn can be used to considerably reduce wastage across the grid and therefore reduce emissions from generation. However, the main purpose of meters is to measure how much we are using from the centralised generation and provision of electricity, which is the whole problem in the first place.”