Chinese power company bids for 2 GW UK coal-fired plant

• 10 years ago (2013-10-30)
• Junior Isles

Asia 848 Europe 1061 Nuclear 640 Renewables 751

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Chinese energy company Meiya Power, a subsidiary of China General Nuclear Power Group (CGNPG), is bidding to acquire the 2 GW Eggborough coal-fired power station in North Yorkshire, which supplies 4 per cent of Britain’s energy needs.

Other groups bidding for Eggborough include the Philippines-based Manila Electric Co.

Eggborough’s current owners, a consortium including several hedge funds, are seeking a major injection of equity to fund a £500 million biomass conversion, extending the life of the plant in the face of emission regulations, or an outright sale.

Media sources suggest that without biomass conversion Eggborough would be unlikely to survive economically beyond the winter of 2015-16 at the latest.

If the Eggborough plant is converted to run on biomass, it will also be eligible for a long-term subsidy contract from the government to guarantee its revenues.

CGNPG has recently agreed to buy a stake in EDF’s proposed £16 billion nuclear power plant at Hinkley Point in Somerset, and is said to be carrying out final due diligence for making a binding bid for Eggborough in the next month.

CGNPC and China National Nuclear Corporation will together take a stake totalling between 30 and 40 per cent in Hinkley Point C; Britain’s first new nuclear plant in a generation.

George Osborne, the UK Chancellor, has acknowledged that Chinese groups could eventually take majority stakes or full ownership of future UK power plants.

CGNPC is thought to view both Hinkley and the potential Eggborough acquisition as important footholds to help it achieve its longer-term nuclear ambitions in the UK energy sector.