UK Market Report
Page 2 of 10
At the time of the sale of Innogy to RWE, Innogy CEO, Brian Count, commented that the fragmentation of British utilities when electricity was privatised, far from being the best approach, would have been much better if it had been organised into five vertically integrated businesses. His prediction is that this will be the end-result in the UK anyway. We shall see if that occurs. We already have Centrica, Innogy and Powergen which have established nationally-recognised brands. TXU is travelling down the same route with its TXU Energi brand combining its Eastern Electricity base with its Norweb Energi acquisition to which it has added the retail supply business of Amerada in the last couple of months. That gives four companies all of which are involved to a greater or lesser extent in retail energy, power generation and energy trading. The fifth company to be added to this list would be EDF-owned London Electricity which has the supply businesses of London as well as SWEB from the South West and newcomer Virgin Energy. This scenario would raise question marks about the future of Scottish Power and Scottish & Southern Energy if Count's view is to become reality. He considers that the fragmentation of electricity has allowed the large integrated European companies to enter the market and take control of the British companies thus preventing the emergence of a national champion.
