GE Energy goes again with auction of Port Talbot plant

Baglan Bay to be sold at the end of the year, as electrical giant focuses on nuclear bid

GE Energy, a division of US giant General Electric, is to sell its £500m Baglan Bay gas-fired power station in Port Talbot, South Wales, by the end of the year.

A sale was originally planned last year, but GE Energy stopped the auction for undisclosed reasons despite interest from a Gazprom-E.ON joint venture.

Magued Eldaief, the recently appointed managing director of GE Energy's UK arm, said he hoped the sale would be helped by improved market conditions towards the end of the year.

"The sale should be in the latter part of the second half of the year," said Mr Eldaief. "Hopefully we will get better value."

The 500mw plant, which opened in 2003, will also go through a major maintenance programme ahead of the sale, which should also increase the price tag. The maintenance will take 28,000 man hours.

GE Energy is likely to retain Lexicon Partners to run the auction, having appointed the firm to advise on the potential sale last year.

General Electric is one of four companies applying for approval to design atomic reactors for the Government's nuclear plant new-build programme. The others are Areva, the French nuclear giant; Westinghouse, a subsidiary of Toshiba; and Atomic Energy of Canada Ltd.

The Nuclear Installations Inspectorate is expected to trim the shortlist of designs down to three next month and then grant licences to the successful designs within two to three years.

However, Mr Eldaief warned that the whole programme could be delayed should the Government not set out a clear licensing timetable. The first new nuclear power plants are scheduled to be operational by 2016.

Mr Eldaief said that the UK should use work that has already been done by US regulators on reactor designs as part of its own programme. "The UK has the opportunity to leverage its effort," he added. "That could take months, if not more, off licensing approval."

Another potential problem was the labour market, said Mr Eldaief. He said there was a lack of skilled workers in the nuclear market to fulfil world demand.

"The reality is that there are a lot of nuclear plants planned in other parts of the world," he continued. "The biggest challenge will be the supply and availability of components and engineering resources. This is something the UK government needs to be aware of."

Mr Eldaief was made head of GE Energy's UK operations at the end of last year, having been president of the company's Asia Pacific region. He also confirmed that he would pursue an acquisitive strategy: "We are always interested in solid and differentiated technologies."