POWER STATIONS that supply electricity to more than 1m homes in Britain could soon fall into the hands of the Kremlin or the Chinese state.
Gazprom, the gas giant controlled by the Kremlin, plans to launch a bid for a plant that has been put up for sale by EDF Energy. The site at Sutton Bridge in Lincolnshire provides power to nearly 800,000 homes. The French utility has hired Rothschild, the investment bank, to run the auction.
Meanwhile, China Guodian Corporation, one of Beijing’s biggest state-owned utilities, has hired Goldman Sachs to bid for General Electric’s Baglan Bay plant in south Wales. It generates electricity for more than half a million households.
Gazprom is the biggest gas supplier to Europe, though it delivers none to Britain. The company is used as a political tool by President Vladimir Putin. He has cut gas supplies to Ukraine in the middle of winter and deepened ties with Germany through pipeline deals and supply contracts.
The possibility of Russia or China buying critical energy infrastructure in this country will be controversial. Politicians have, in the past, bristled at government-owned utilities from outside Europe eyeing British energy firms.
When Gazprom was rumoured to be looking at a bid for Centrica, owner of British Gas, in 2006, ministers met to examine the “possible consequences resulting from any takeover of a major UK energy supplier”.
Faced with a £200 billion bill to overhaul the sector, however, the government has changed its tune. David Cameron has thrown open the doors to Britain’s energy industry.
Charles Hendry, the energy minister, said last year he would not obstruct Gazprom from buying Npower, which had been put up for sale by RWE, its German parent. The government recently held an investment fair to entice China’s cash-rich companies to buy into the sector.
The Russians are understood to be particularly keen to increase their presence. Gazprom already operates a trading business here. Last year Hendry attended the gala opening of its new headquarters in London.
The interest comes at a critical time. Last month saw the publication of the Energy Bill, a package of subsidies meant to lure new investors to fund an ambitious low-carbon overhaul of the sector.