UK may overhaul wholesale electricity market

Fuente: Financial Times

The UK government admitted for the first time on Sunday that it was contemplating an overhaul of the wholesale electricity trading market in order to save nuclear power giant British Energy from a deepening financial crisis.

In comments that attracted immediate criticism from Ofgem, the electricity watchdog, Brian Wilson, the energy minister, said the Department of Trade and Industry was prepared to consider reforming wholesale electricity trading arrangements in the UK in a forthcoming policy paper.

British Energy, which was fully privatised six years ago, is the dominant generator of electricity in the UK from nuclear sources. But the company faces numerous financial problems.

It is losing about £4 ($6) for every megawatt hour of electricity it sells and faces having to come up with £450m next year to pay off debts and cover losses.

One reason for British Energy's problems is that the cost of generating electricity from nuclear power stations has remained high, while the price of electricity in the wholesale market has plunged by more than 30 per cent in the last two years.

Mr Wilson on Sundayappeared to put the blame for the company's woes on the introduction 14 months ago of reforms aimed at opening up competition between generators, thereby cutting domestic bills.

He indicated that the introduction of Neta had pushed down the wholesale price of electricity without affecting some generators such as TXU, London Energy or Germany's E.On which have big retailing operations and can buy electricity from themselves.

But he suggested that the nuclear sector has been especially badly hit. "We need to address the unfortunate reality that British Energy can't get a price for its product that is reasonable," Mr Wilson said. "If you have a market that drives the retail price below the cost of generation, the company's responses are clearly limited. Other generators have some kind of retail market and can offset problems on to the customer base."

Mr Wilson said a forthcoming policy paper reviewing the UK energy sector "creates a context in which all these issues can be looked at, including the impact of Neta on the viability of generators".

However, a spokesman for Ofgem defended the power trading system and said generators should be allowed to go bust. "This is a commercial market and, as in all markets, companies will fail - it's as simple as that," he said.

Enagás obtuvo un beneficio neto de 53,4 millones de euros en el primer semestre de 2002, mientras que el resultado operativo (EBIT) ascendió a 107,8 millones de euros y el "cash flow" (beneficios más amortizaciones) a 169,4 millones de euros.