British nuclear power stations EDF and poor government energy policy

British Energy’s nuclear power stations are still under UK control – for the time being. The government wanted the company to sell its shares to Electricité de France (EDF) and this was being presented as a “done deal” when I criticised the principle of the government losing control of the nuclear generated electricity in this country to EDF which is owned by the French state.

The directors of British Energy have decided that the French offer undervalues the shares by around 30%. This was reported as killing the deal, but I doubt it. It will be worth the extra money to gain control of 25% of the UK’s future electricity supply with the Government now openly demanding that we build more and more nuclear power stations as a matter of urgency.

From the Government’s point of view the urgency is that the lights may go off in ten years without the nuclear energy; that simply shows the level of carelessness and incompetence embedded in the Government’s energy policy for the past eleven years.

Apparently the Government thought that EDF’s offer was excellent value for money. British Energy’s board, after discussing the bid with other shareholders thought differently. Unlike the Government the shareholders (the Prudential amongst them) had twigged that energy supply is inevitably going to become more and more profitable and this makes the shares more valuable that the Government thought.

John Hutton, business secretary is quoted as saying that this development is disappointing. Clearly he feels that it is more important to sell of British Energy and make a quick start on building nuclear reactors than to sell the nation’s shares in British Energy at a correct valuation. John Hutton, let me remind you is the Business secretary. This is a strange way to run a business – selling shares for less than they are worth. Did he take advice on the share value and if so why was the advice he got so different from the view of the value formed by the Prudential and other investing shareholders?

But that is a diversion. The real issue is do we want a quarter of our electricity generation (that is to say the only part of our energy generation not dependent on foreign imported fuel) to be in the hands of a foreign Government? Would the French permit it? I doubt it.

The Government wanted British Energy in the hands of EDF so as to enable the planning and building of new and as they regard badly needed power stations to be  undertaken quickly. The official line after this had been scuppered was that it would now take longer. there we have it; a demonstration of how powerless the Government is and the country will be when the real decisions are made about our national energy and power supplies not by the Government but by EDF and the Prudential.