EDF’s £12.5 billion takeover of British Energy threatens to drive up prices and undermine competition in the UK electricity market, according to one of the country’s biggest power producers.
Dorothy Thompson, chief executive of Drax Power, operator of Britain’s largest power station, criticised antitrust remedies agreed between EDF and the European Commission as being no more than “a gesture”.
She told The Times that the acquisition, which has led to the loss of Britain’s largest independent wholesale generator and the creation of a powerful new presence in the industry, would harm consumers by pushing up prices, reducing market transparency and dampening investment in new power stations in the UK.
“If the market is inefficient, then we will not have the cheapest prices for consumers and we will have the wrong generation mix,” she said. “It will dull the price signals and dampen the interest of everyone except the very large players, which already have guaranteed access to consumers, to build plants.”
Dorothy Thompson, chief executive of Drax Power, operator of Britain’s largest power station, criticised antitrust remedies agreed between EDF and the European Commission as being no more than “a gesture”.
She told The Times that the acquisition, which has led to the loss of Britain’s largest independent wholesale generator and the creation of a powerful new presence in the industry, would harm consumers by pushing up prices, reducing market transparency and dampening investment in new power stations in the UK.
“If the market is inefficient, then we will not have the cheapest prices for consumers and we will have the wrong generation mix,” she said. “It will dull the price signals and dampen the interest of everyone except the very large players, which already have guaranteed access to consumers, to build plants.”
Amid criticism of the deal, EDF agreed last year to auction a fixed amount of the electricity generated by its UK power stations in the wholesale market between 2010 and 2014, but Ms Thompson said that the auctions would be so small as to have a negligible impact on the market.
Documents published by the European Commission show that, in two of the four years, 2010 and 2014, EDF will auction at least five terrawatt hours. In 2011 and 2012, it has agreed to auction between five and fifteen terrawatt hours — still a relatively small amount, given that Drax’s station in Yorkshire generates 25 terrawatt hours of power a year. “We consider that a very modest amount,” Ms Thompson said. “It’s a gesture.”
Together, the EDF/British Energy group generates nearly 30 per cent of the UK’s electricity. Before the tie-up, British Energy, which operates one coal-fired and eight nuclear power stations in the UK, generated about 18 per cent, while EDF Energy produced about 9 per cent.
As an additional competition concession, EDF agreed to sell some of its other power plants and give up its hold on some sites for the development of new nuclear sites in the UK.
EDF rejected Ms Thompson’s criticisms. It said that the deal had been agreed with the Commission.
Documents published by the European Commission show that, in two of the four years, 2010 and 2014, EDF will auction at least five terrawatt hours. In 2011 and 2012, it has agreed to auction between five and fifteen terrawatt hours — still a relatively small amount, given that Drax’s station in Yorkshire generates 25 terrawatt hours of power a year. “We consider that a very modest amount,” Ms Thompson said. “It’s a gesture.”
Together, the EDF/British Energy group generates nearly 30 per cent of the UK’s electricity. Before the tie-up, British Energy, which operates one coal-fired and eight nuclear power stations in the UK, generated about 18 per cent, while EDF Energy produced about 9 per cent.
As an additional competition concession, EDF agreed to sell some of its other power plants and give up its hold on some sites for the development of new nuclear sites in the UK.
EDF rejected Ms Thompson’s criticisms. It said that the deal had been agreed with the Commission.
Source: The Times
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