Power bid shock

National Power may join the race for London Electricity

NATIONAL POWER, the nation's largest electricity generator, is considering a bid for London Electricity, the company lighting up the capital city. London Electricity is being sold by its US owner, Entergy Corp, which has already received bids from almost 30 interested parties. The closing date for bids comes at the end of the week.

The US company is selling London Electricity because its entry into the UK did not pay off as well as it expected, sources close to the New Orleans- based company said.

National Power has repeatedly said it does not want to get into the business of distributing electricity over wires. So it would probably buy London Electricity to gain control over the power supply business, analysts say. The power supply business encompasses the actual marketing of electricity and commercial arrangements with customers.

David Campbell, an analyst at Greig Middleton said that to buy London Electricity would be a major change of direction if National Power didn't sell the distribution business. Mr Campbell said the company could be intending to hive off the distribution business to a financial buyer like Nomura or to another power company. Earlier this year Nomura considered buying the distribution business owned by Energy Group, before the company was sold to Texas Utilities for pounds 6.3bn.

National Power has received a copy of the London Electricity sale prospectus from Morgan Stanley Dean Witter, the bank handling the sale, sources said. A spokesman for National Power said: "Our policy has always been that we would like to get into supply - and we are considering all the options." But he wouldn't comment on whether the company is considering a bid or has received documentation.

National Power has been facing pressure from the Government and the electricity industry regulator to sell some of its coal-fired power stations in order to make the generation market more competitive. It has called the demands unjustified, arguing that the market has become progressively more competitive since National Power and the number two generator, PowerGen, were privatised in 1990. Last week PowerGen agreed to sell 4,000 megawatts of its coal- fired capacity in return for being allowed to keep its pounds 1.9bn acquisition of East Midlands Electricity, the UK's third largest electricity supplier.

National Power would have to sell at least as much generating capacity if it bought London Electricity, analysts say. Until now the company has focused on building up its business overseas, while accepting that its UK generation busi ness would lose market share.

The introduction of gas-fired power stations, which have taken the place of coal-fired stations, has resulted in a decline in National Power's market share from 46 per cent to about 20 per cent. Since 1991 the number of generating companies in the UK has grown from three to 30.

Suggested Topics
PROMOTED VIDEO
News
Happy in his hat: Pharrell Williams
people
Arts and Entertainment
Stella Gibson is getting closer to catching her killer
tvReview: It's gripping edge-of-the-seat drama, so a curveball can be forgiven at such a late stage
News
Brazilian football legend Pele pictured in 2011
peopleFans had feared the worst when it was announced the Brazil legand was in a 'special care' unit
News
i100(More than you think)
News
Phyllis Dorothy James on stage during a reading of her book 'Death Comes to Pemberley' last year
peopleJohn Walsh pays tribute to PD James, who died today
News
peopleExclusive: Maryum and Hana Ali share their stories of the family man behind the boxing gloves
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Argyll Scott International: 2x Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Recruitment Genius: Senior Execution Trader

£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...

Citifocus Ltd: ACA - Financial Reporting

£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner