Thursday, September 15, 2005

Rothschild plans for private nuclear power Business - Energy & Utilities - Rothschild plans for private nuclear power


NM ROTHSCHILD, the merchant bank, is in talks with the UK's leading power utilities on a proposed jointly owned nuclear power company, dubbed 'New Nuclear plc', which could raise funds and manage a new generation of UK nuclear power stations.

Scotland on Sunday has learnt that Rothschild drew up the plan on the instigation of its client, state nuclear group BNFL, which is looking at ways in which a UK nuclear revival could be funded by the private sector. "Rothschild is very keen to get back into nuclear," said a source at one of the UK power utilities. "They were the advisers to [UK private nuclear generator] British Energy for what would have been Sizewell C."

Rothschild in 1994 led attempts to raise £3.5bn in funding for the plant, which was never built.

But after British Energy's financial crisis in 2002, it has been ruled out as a contender for funding any new build.

A power market source said: "British Energy may have some sort of role in it, but it couldn't do it by itself. You are in a much better position if you are integrated in supply and retail."

British Energy's lack of retail customers makes it extremely vulnerable to fluctuations in the power price, whereas in times of low power prices, the utilities can balance financial losses from their power generation with higher profits from their retail businesses.

Rothschild is proposing that a minimum of three of the UK's six utilities take stakes in New Nuclear plc.


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