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NRG Energy is Drax front-runner

Tuesday 17 August 1999 18:02 EDT
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NRG ENERGY, a wholly owned subsidiary of Northern States Power of the US, is the front runner to buy the Drax power plant, sources said yesterday.

Minneapolis-based NRG is expected to pay more than pounds 1.5bn for the plant, owned by the UK's largest fossil-fuel generator, National Power, the sources said. This is below the pounds 2bn the market is expecting.

A National Power spokesman said: "The results of the negotiations will be announced shortly."

The Government and energy regulator mandated the sale of coal-fired power plants in the UK by National Power and PowerGen to introduce more competition in generation.

As a result, NP put Drax, a four-gigawatt coal-fired plant, up for sale. The plant, in Yorkshire, can generate four billion watts of power every hour at full capacity and is one of the largest in Europe.

The asking price of pounds 2bn is unlikely to be met, said sources close to the negotiations speaking under condition of anonymity. Several buyers have backed out of the race.

NP's share price has fallen from 518p at the end of December to 426.25p yesterday, when it lost 6.75p on the day.

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