EDF Plans U.K. Fossil Fuel Exit With Sale of Gas Station
EDF Plans U.K. Fossil Fuel Exit With Sale of Gas Station
(Bloomberg) -- Electricite de France SA will no longer operate any fossil fuel-fired power generation in Britain after it announced the sale of its West Burton B gas-fired power station.
The sale, to private equity firm EIG Global Energy Partners LLC, comes after the French utility said last month it plans to close West Burton A coal station in September 2022, leaving just nuclear and renewable capacity in its U.K. portfolio.
EDF is positioning itself as a low carbon generator. The sale is part of the company’s 3 billion euro ($3.6 billion) divestment plan to curb debt. Cash flow that was already stretched by hefty capital spending commitments has also been hit by the coronavirus pandemic, leading S&P Global Ratings to cut the utility’s long-term rating this month to BBB+.
The 1,332 megawatt gas station was built in 2008 and came into the spotlight in January when it was able to step in and generate as power supply margins were tight earning one of the highest payments in balancing market history.
EIG has $22 billion under management and specializes in private investments in energy and energy-related infrastructure.
EDF has 8 nuclear stations but by 2024, four of which will be halted permanently. In addition its Dungeness plant has been halted for almost three years and its future is looking increasingly uncertain.
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EDF is building a new plant, Hinkley Point C, but that won’t be generating until 2026 so storage technology or small-scale gas plants will be needed to plug the gap.
The deal is expected to complete later this year. The financial details of the sale weren’t disclosed.
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