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

At the beginning of February 09, the Organisation for Economic Co-operation and Development (OECD) released figures that indicate the major energy providers of Europe have increased the energy prices in the UK much more than they have in their home countries over the course of the last year. This means that where we have seen energy inflation figures of over 12%, other European countries have actually seen their prices fall and there doesn’t seem to be a lot we can do about it.

Few people know that most of the biggest UK energy providers are foreign companies and that British Gas and Scottish & Southern Energy are the only UK registered energy providers around. For example, nPower and E.on are German companies, EDF is French and Scottish Power is Spanish and all of these European countries have seen their energy prices fall over the last 12 months. Figures show that with regards to energy prices, Germany saw cuts of nearly 1%, France of 6.5% and Spain over 7% in the same time period that we saw increases of over 12%.

Strangely though, the wholesale price of gas has fallen by over 40% since the middle of last summer but it is only now that we in the UK are beginning to see cuts in our energy prices – and in some cases this is only because British Gas and Scottish & Southern Energy have announced their price cuts. Recently, British Gas pledged to reduce their prices by 10% and as a result a number of the other large providers have followed suit. The question is though, would the German, French and Spanish companies have introduced similar cuts had British Gas done nothing?

Many experts say no and that the European companies would have continued to charge high energy prices in the UK so that they could keep the prices low within their own countries. They also say that is was simply the competition with the UK suppliers that spurred them into action but who knows what their intentions were in the long run – we should just be happy that they are starting to bring our prices back down.

Saying all this though, it seems that the figures are a little misleading and that we in the UK actually pay less for our energy than the rest of Europe and even with the inflation we still pay less. This is neither here nor there though and it makes you wonder what we could be paying if we had seen the same price cuts as the countries mentioned above. Most of the big energy suppliers have now announced their price cuts to the general population and over the course of the next year everyone should start to see savings, but the question remains – how much could we have saved by now if we’d seen the same degree of price cuts as everyone else in Western Europe last year?

Guest Article by Clare Lynock

Nothing works up the British blood more than being done over by that lot across the channel.

The island nation Britain has never really been comfortable with its close European neighbours; there has just been too much bad blood with France, Germany and Spain over the centuries.

We don’t like how the French call us ‘rosbeefs’, how the German’s hog the sun loungers and how the Spanish insist we eat paella rather than chips, egg and beans.

And we don’t like that thing called the euro, despite its doing better than the good old British pound.

Even now when the subject of Germany crops up in pubs, it still centres on the performance of the Spitfire, the inventor Barnes Wallace and how their national team have to rely on penalties to get them through against the heroic English boys.

All this despite the fact that the European Community controls much of the destiny of the U.K. On one level xenophobia might still be the big thing; on another, the U.K. is a cornerstone of Europe and heavily influenced by events there.

So when the U.K newspapers publish stories about how those rascals across the water are charging us more for our energy than their own countries, we get all worked up.

Whether that’s true or not, and more on that in a minute, it slightly misses the point that during the boom period, to which most of the U.K citizenship benefited, many traditional British companies were sold overseas. Some of our biggest names are no longer owned by nice bowler-hatted gentlemen from the home counties who play cricket on Sunday and drink tea with their little fingers in the air. No, they are now owned by pan-European shareholders, run by executives with names we just can’t pronounce and who are determined to be successful.

U.K. plc has had one of its biggest sales and there’s not much left on the corporate shelves. And it’s a little late to start complaining now.

But back to the xenophobia. When our tabloid newspapers scream that the energy companies, mostly owned by those old enemies across the channel, are ‘screwing’ us at the expense of their own countries, then it gets attention. Energy inflation in the U.K was over 12% last year, or so say the Organisation for Economic Co-Operation and Development (OECD). Yet in Germany it was actually minus 0.8%, France a minus 6.5% and Spain a minus 7.2%.

So, the tabloids highlight those figures, talk about good old British Gas – still an old blighty firm – has made a ten per cent cut in their prices, then add in that there has been no such action from German owned nPower and E.on, nor from French owned EDF, or Spanish owned Scottish Power, and there you have it, they’re killing us.

But, of course, it’s just not that simple.

What would be more helpful from the OECD is not just inflation figures, but a comparison with actual energy costs for all European states. The energy companies claim that the U.K. started from a very low base, that for years we have benefited from low energy costs, but now, there is inevitable catch-up as globally energy becomes more expensive. And still, say The Energy Retail Association, the U.K. has the most competitive energy prices in the world.

So, if they are ‘screwing’ us at the expense of others, in one way we needn’t be surprised, but before we go around saying it, we should make sure we’ve got our facts right.

Guest Article by Neil Camp

Are the foreign owned energy companies charging Britain more for its energy and cutting prices in their own countries?

It’s long been suspected by consumer groups that the U.K. has been singled out as a place of maximum returns for overseas companies providing energy. Throughout the last year the U.K. has faced the highest energy prices, whilst its mainland European neighbours, notably France, Germany and Spain, have fallen.

Now people are pointing out that it can be no coincidence that the major energy companies are owned by companies in France, Germany and Spain. And the accusation is that these companies are helping their own countries, at the expense of the U.K.

Figures from the latest inflation study from the Organisation for Economic Co-Operation and Development (OECD) show that the U.K. suffered the worst inflation for the year to December 2008, at 12.1%. Next in the table came Belgium at only 3.2%. Still in positive territory were Sweden and Italy with 2.3% and 1.3% respectively, but the first drop comes with Germany’s dip of minus 0.8%, Ireland’s at minus 3.3% and Netherlands at minus 3.4%. France showed a healthy minus 6.5% and Spain an even better fall of minus 7.2%. And the biggest drop of all, Switzerland at minus 10.3%.

The consumer groups bemoan the fact that since last summer gas and electricity gas prices have dramatically collapsed, by as much as 40%, many of the gains have yet to be passed on to U.K consumers.

What’s causing the most resentment is that whereas Centrica of Britain, which owns British Gas, has recently announced a ten per cent cut and another U.K. owned energy concern Scottish and Southern has promised cuts, their European counterparts have, up to the time of writing, failed to do the same.

There has been no talk of price cuts for the U.K German owned nPower and E.on, nor from French owned EDF, or Spanish owned Scottish Power.

In their defence, the overseas energy companies claim their detractors are not comparing like for like and that the U.K. started from a lower cost base than its mainland neighbours. Furthermore, state The Energy Retail Association, the U.K. has the most competitive energy prices in the world and that the inflation figures in the OECD findings show just inflation, and not the actual energy prices.

Whatever the truth, as the economic squeeze gets tighter, this is going to remain a contentious issue.

Guest Article by Neil Camp

• 4 million customers have no access to best offers
• Prepayment meters cost £118 more than direct debit
  
• Quarterly cash or cheque payments cost £80 more than direct debit

Announcing the findings of a seven-month investigation into Britain’s energy market, the energy industry regulator, Ofgem, has found no evidence of a ‘cartel’ amongst the big six suppliers, but it warns gas and electricity suppliers to stop charging customers different prices for paying by direct debit or pre-payment meters.

The report highlighted 4 million households that were £55 a year worse off because they couldn’t take advantage of the most competitive offers; households using pre-payment meters being charged an average of £118 more than direct debit customers; and households paying quarterly by cash or cheque being charged an average of £80 more than those who used direct debit.

According to Ofgem, although it found that the market works well for most consumers, many of the most vulnerable customers, including pensioners and low income households, were less likely to be able to make informed choices about tariffs under the current system. Customers not connected to the mains gas grid were losing out too.

The regulator proposes wide-ranging reforms which include a requirement for companies to help all consumers access the best deals and more transparency to show the link between the wholesale price of energy and the price charged to customers. It also wants to stimulate new competition by making it easier and more attractive for smaller suppliers to break into the market, currently dominated by six companies – British Gas, ScottishPower, Scottish & Southern Energy, EDF Energy, Eon and Npower.

Consumers have already been hit by two hefty price hikes this year and energy suppliers continue to blame soaring prices in the global wholesale gas and electricity markets. The recent Which? report on energy suppliers also reveals widespread dissatisfaction amongst customers, the lowest of all industries.

The Ofgem report is therefore likely to receive a luke-warm reception as many will feel disappointed that it doesn’t go far enough to impose its recommendations.

Mini-Post by Alan Potts