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Posted by Richard Sunday, September 21, 2008 , ,

You can read it any which way, but The Sunday Times is telling us that EDF is poised this week to finalise the long-awaited £12 billion takeover of British Energy (BE), thus acquiring its nuclear generation assets.

This deal has caused considerable concern. EDF is 85 percent owned by the French government and the prospect of the entire UK nuclear generation capacity coming under the control of the French has considerable ramifications.

However, in what appears to be a new development, EDF is suggesting its willingness to hand back two key nuclear sites to the government for auction later this year. Power companies will be invited to tender for these, with Germany's RWE and Eon, Spain's Iberdrola and Sweden’s Vattenfall expected to make bids.

The two sites named are Dungeness, on the Kent coast, and Bradwell, in Essex, to which will be added other sites on which there are non-operational nuclear plants. This, it is hoped, will create one or more competitors to EDF, and speed up the construction of new reactors, with multiple sites under development at the same time.

If the BE takeover is successful, EDF is expected to press ahead with the construction of reactors at Hinkley Point in Somerset (pictured) and Sizewell in Suffolk, with a possibility that two reactors will be built at each site.

The timing of this development has considerable political significance. With the Labour Party conference in progress, Westinghouse, the Japanese-owned nuclear reactor group, is planning tomorrow to attend with to launch a report claiming that the construction of its plants could bring a £30 billion boost to the British economy.

John Hutton, the energy secretary, who is to attend the launch, has been quick to capitalise on this, saying: "This report illustrates why I am so determined to press all the buttons to get nuclear facilities built in this country at the earliest opportunity."

This positions the Labour Party – under attack from all sides – as offering serious options for resolving the anticipated energy crisis. This is in stark contrast to the Conservative opposition which has yet to show its hand on energy and – according to its interim findings from its energy review - regards nuclear energy as a "last resort".

There is already some muttering in the ranks about the lack of any coherent direction from the Conservatives on energy. On Gordon Brown's handing of the economic crisis, The Independent newspaper is reporting that Labour has enjoyed a "bounce" at the expense of the Conservatives. According to its poll (which needs to be treated with the gravest of suspicion), it has nearly halved the Tory lead, from 21 points to 12.

If Labour can capture the high ground on energy – which it has already begun to do - the Conservatives could look extremely flat-footed. Then, this blog's predictions about Labour giving the Conservative a harder time than they expected might edge closer to reality.

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