British Gas owner Centrica has been reported to be buying a stake in British Energy, the U.K. nuclear power, for some £2.3 billion.

This represents 20% of British Energy, which is owned by French company EDF, but is less than the 25% (for £3.1 billion) than was first reported.

Talks are said to have stalled after the world recession forced down electricity prices. And the deal which saw EDF snap up British Energy for £12.5 billion was only itself concluded in January 2009.

EDF and Centrica have ambitious plans to grow the business which currently operates eight nuclear power stations throughout the U.K. At the heart of the expansion is a plan to build four new nuclear power stations on the existing sites. This will be necessary in order to meet the government’s plan to generate more power from nuclear than fossil fuels.

The current eight British Energy nuclear sites are at Dungeness B, Hartlepool, Heysham 1, Heysham 2, Hinkley Point B, Hunterston B, Sizewell B and Torness. Together they generate around 15% of the U.K.’s domestic energy.

The four new plants are expected at Hinkley Point in Somerset and Sizewell in Suffolk. Depending on regulatory permissions, the first new plant is meant to be operational by 2017.

EDF is currently the world’s biggest operator of nuclear power stations. It’s acquisition of British Energy was at the time criticised by MPs and action groups. EDF is 85% owned by the French government and many were concerned that the U.K. was unnecessarily passing on control of one of the country’s main assets, and threatening energy supply security.

Guest Article by Neil Camp

So, the £12.5bn deal to sell British Energy to the French giant EDF is being touted as ‘good value for the taxpayer’ by Gordon Brown.

If the deal is confirmed, the French will not only take control of the eight BE nuclear sites around Britain, it will also take possession of the land around them where new reactors could be built.  EDF will therefore establish itself as a leading player in both the supply of British nuclear energy and the future development of new British nuclear power stations. 

Meanwhile, the British Government will pocket billions from its 36% stake.

State-owned EDF is the largest European supplier of electricity and it already serves gas and electricity to around 5 million British households, all of whom are still reeling from the huge hike in energy costs earlier this year.

Exactly how the British taxpayer will benefit from selling off the countrys’ nuclear assets remains to be seen.  Will we see cheaper household energy bills?  I somehow doubt it.

Mini-post by Alan Potts