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After years of mergers and take-overs in Britain's energy market place, it would appear that to tide is about to turn on the energy giants when the conservatives win the 2010 general election.
Ownership of Britain's power plants has been reduced to six major players. Mainly German but also French and Spanish players have bought virtually all of Britain's electricity production capabilities in recent years. As many other so-called "crown-jewels" many state owned power production plants has been sold of to the highest bidders during the big energy race during the 2003-2008 period. Foreign companies saw some excellent opportunities when utilities where being sold off. After that period of acquire and conquer, we are now left with six energy giants:
1. Centrica
2. RWE - nPower (German)
3. E.on (German)
4. EDF (France)
5. Scottish Power (Spanish)
6. Scottish and Southern Energy
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Together they virtually hold all of Britain's energy production capacity. Entrance of new players into the market is therefore almost impossible unless they are willing to spend hundred's of millions on new electricity production plants. Sites to place any new electricity plants are few and far between due to a "not on my door step" attitude by the British public at large. Governmental interference forcing all six giants to sell of some of their assets seems to be the only way to achieve this more competitive environment.
On the flip side of this forced sell off the government realises that in the near future a £200 billion investment is required to update Britain's ageing energy infrastructure. Where is that money coming from ? Considering the financial state of Britain Plc., it would appear that the only people how are able to pay for such enormous projects are the big six energy producing companies as they are now.
Failure of the energy giants to pass on savings, as a result of the much lower gas prices in last 2009 and 2010, to the consumers, further fuels the debate to cut the giants down to size again. It would appear the big six are holding all the aces unless some severe legislation is to be handed down under a conservative government which is maybe not the most likely thing to happen.
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