"The Government sold its stake in British Energy when
energy prices were at a peak, and got a good price. The biggest
priority for the Government was, however, to ensure new nuclear
power stations could be built from the earliest possible date and
with no public subsidy. Whether it will achieve this remains to be
seen. The Department of Energy and Climate Change now needs to make
real progress on its contingency plans should EDF be unwilling to
build new nuclear power stations."
Amyas Morse, head of the National Audit Office, 22 January
2010
The Government received a good price when
selling its interest in British Energy. But it is too early to say
whether the sale will enable the Government to achieve its
strategic objective of ensuring nuclear operators are able to build
and operate new nuclear power stations from the earliest possible
date and with no public subsidy, according to a report by the
National Audit Office.
British Energy was the largest independent energy generator in
the UK and owner of sites viewed by industry as the most suitable
for new nuclear power stations. The Government sold its 36 per cent
interest in the company to EDF Energy for £4.4 billion in January
2009. The final cash offer from EDF was 774 pence per share – 10
per cent higher than the valuation by the Shareholder Executive,
the Government agency that managed the sale. Movement in energy
prices after completion of the sale show that EDF put forward its
offer when energy prices were at a peak.
The Government’s primary objective for the sale was to ensure
nuclear operators are able to build and operate new nuclear
stations from the earliest date with no public subsidy. The
Department of Energy and Climate Change did not seek, and EDF did
not offer, any binding commitment to build new nuclear power
stations as a condition of the sale. But EDF’s acquisition of
British Energy has improved the prospect of investment in new
nuclear power stations.
While the Government no longer has a direct financial interest
in British Energy, it remains responsible for funding any shortfall
in the future cost of decommissioning British Energy’s existing
nuclear power stations. The Shareholder Executive did not carry out
a formal assessment of the impact of the sale on the risks that
taxpayers might have to bear if, for example, the new owner
operated British Energy’s power stations in a way that required
earlier decommissioning.
Publication details:
HC: 215, 2009-10
ISBN: 9780102963434