Select Committee on Constitution Minutes of Evidence


Annex 1

BRITISH ENERGY—BACKGROUND INFORMATION

GENERAL

  British Energy is the largest generator in Great Britain both in terms of capacity and output. In 2001-02 it owned and operated 11.8 GW of generating plant (16 per cent market share of capacity) and produced 75TWh of electricity (21 per cent market share of output). It is also a major supplier of electricity to the industrial and commercial segment of the market. In 2001-02 it supplied 18TWh (24 per cent of its output) to over 950 customers across 5,000 sites.

  British Energy was privatised in 1996 and remains the only private sector owned operator of nuclear power stations in the UK. It owns and operates six nuclear power stations in England (5 AGR and 1PWR) with a capacity of 7.3 GW and 2 AGR stations in Scotland (2.5 GW). It also owns and operates the 2,000 MW Eggborough coal-fired power station located in North Yorkshire.

  BE currently has a 50 per cent holding in AmerGen, a joint venture with US owned Exelon. AmerGen owns and operates three nuclear power stations in the United States. However, in accordance with BE's restructuring plan (see below), BE is taking steps to realise its 50 per cent interest in AmerGen by 30 June 2003.

REGULATORY INTERFACE

  Under the Electricity Act 1989 (as modified by the Utilities Act 2000) BE holds three generation licences and a supply licence. These operating licences are governed by the Office of Gas and Electricity Markets.

  British Energy has also been granted by the Financial Services Authority a Part IV authorisation under the Financial Services and Markets Act 2000 in relation to its wholesale trading activities.

  Under the Nuclear Installations Act, all of BE's nuclear power stations are operated in accordance with site licences issued by the Health and Safety Executive and administered by the Nuclear Installations Inspectorate. Further information on the relationship between BE and the NII can be submitted if requested.

RESTRUCTURING

  In September 2002 BE initiated discussions with the Government with a view to both seeking immediate financial support and to enabling discussions about a possible longer term restructuring to take place. As a result of these discussions, the Government entered into a credit facility agreement with BE in order to provide financial stability and security whilst BE seeks to achieve the restructuring plan announced on the 28 November 2002.

  On 7 March 2003 and as part of this process the Government applied for state aid approval from the European Commission for this restructuring aid. The current credit facility matures on the earlier on the 30 September 2004 or the date on which the restructuring plan becomes effective.


 
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