Generator to invest pounds 1bn overseas

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The Independent Online
NATIONAL Power will invest pounds 1bn in overseas projects by the end of the decade to offset its loss of market share in Britain as independent electricity producers come on stream, writes Mary Fagan.

The privatised electricity generator expects up to a quarter of its business to be outside the UK, largely through equity stakes in power plant projects. It is also discussing asset swaps with foreign power companies, which could include forming joint ventures to run plants in the UK and abroad.

The largest overseas project in which National Power is currently involved is the operation of a 1,200- megawatt oil-fired plant at Hub River in Pakistan. It is also at a late stage of negotiations to operate a new coal-fired power station in Western Australia and to take on the running of a 600-megawatt station in Portugal. The typical investment in each project is pounds 50m, a company source said.

National Power expects its 45 per cent share of the UK electricity generation market to fall to 35 per cent or less in the mid-1990s as independent gas-fired plants come on stream.

Meanwhile, the electricity industry is locked in intense negotiations with British Coal over contracts to secure the future of the coal company.

It is understood that last week British Coal proposed a five-year deal under which it would sell 40 million tonnes a year to the generators, tapering off to 30 million. This compares with sales of 65 million tonnes this year.

However, the generators will not sign unless the regional electricity companies sign parallel contracts to take all the electricity generated from the relatively expensive fuel supplied by British Coal.

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