British consumers could see their energy bills rise dramatically as a result of the takeover of British Energy by French company EDF, which industry experts fear will lead to the demise of competition in the UK energy market.
The takeover of British Energy by EDF – 80 per cent of which is owned by the French government – will see control of the UK's eight nuclear power plants fall into the hands of a foreign country, thus handing EDF 30 per cent of the country's electricity production and giving it the power to set future fuel prices.
In return for selling its 35 per cent share in British Energy, the UK government will get £4billion, but critics of the sale are concerned about the impact this could have on British households that are already struggling to keep up with the rising cost of living.
Energywatch, the official consumer body, has voiced concern that the purchase of British Energy by EDF will "concentrate more power in the hands of the big six energy companies" which will, in turn, "have an impact on the level of competition within the market".
As the world's largest nuclear power provider, EDF is estimated to be worth £73billion, with 58 reactors on 19 sites. Previous to the takeover, it already provided six per cent of electricity to nearly eight million British homes.
As a result of the deal with British Energy, which generates 20 per cent of the UK's electricity,it will take a much larger chunk of the market, and plans to expand, building four new giant nuclear reactors.
It is expected that the costs involved in replacing power connections and constructing new nuclear power plants will be passed onto British households through higher fuel bills
There are also fears that the UK is seen by foreign energy companies as a 'treasure island', and that the French company might be quick to impose higher costs on British consumers while protecting those in their own country from price rises.
In a statement, Energywatch
warned that "The security of supply issues and the competition issues must both be covered if we are to ensure that consumers are to be beneficiaries from the deal."
British households have already had to suffer several hikes in energy costs this year from a number of gas and electricity providers
as a result of the soaring price of oil.
© Fair Investment