Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Outlook: EdF and Sweb

Friday 11 June 1999 18:02 EDT
Comments

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

WHETHER YOU live on the Isle of Dogs or the Isles of Scilly, it is impossible to escape the French these days. Electricite de France's purchase of the Sweb supply business yesterday adds Harold Wilson's favourite holiday spot to its ever-expanding portfolio. This already included two million households in the London area and now there are another 1.3 million homes in south-west England who will be warming their baguettes with French power.

Naturellement, EdF has overpaid for the business. The pounds 180 that it is shelling out to buy each Sweb customer compares with the pounds 150 a head that National Power spent buying Midlands Electricity's supply arm and even that deal was thought to be expensive.

But who's counting when EdF has the French state behind it and the French taxpayer picking up the tab?

British Energy, for one, perhaps. It was outmanoeuvred and outbid by EdF in the auction for London Electricity, with a little help from the European Commission. Now it has come second best in the bidding for Sweb and will probably have to console itself by taking the Swalec supply business off poor old Hyder.

Considering the wafer-thin margins in electricity supply and the dubious credit-rating of many customers (whom the Government politely refers to as the "fuel poor"), these businesses are going for ridiculous sums.

At least National Power and British Energy have the excuse that they are buying a ready made customer billing and marketing service as well as a list of customers. EdF has no such defence in the case of Sweb because it already had London Electricity under its belt.

But the French are on a mission and will only relent when they have captured a fifth of Britain's electricity supply and generation markets. The cross- Channel interconnector, which handily seems to flow in just one direction, has given EdF a head-start in generation. Its ability to outbid anyone, even a cash machine like British Energy, when it comes to buying supply businesses should do the rest.

This time there is more likelihood of the Sweb deal being referred back to the UK from Brussels. But given that the electricity supply market is now, in theory, a competitive one, there may be less scope for the energy regulator Callum McCarthy to wring concessions out of EdF. In a perfect world, EdF would hand back to customers some of the savings it will make when the axe falls on the Sweb workforce. If nothing else, it can certainly afford it.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in