Thursday, 4 December 2008

EDF Makes New Bid of as Much as $6.5 Billion for Constellation Assets

Electricité de France SA said on Wednesday it is offering to buy as much as $6.5 billion of assets from Constellation Energy Group Inc., the U.S. utility that spurned an earlier offer from the French energy giant and instead agreed to be bought by Warren Buffett's MidAmerican Energy Holdings Co.

Warren Buffett
EDF, the world's largest nuclear utility, is attempting to wrest Constellation from MidAmerican, a unit of Berkshire Hathaway Inc., three weeks ahead of a vote by Baltimore-based Constellation's shareholders on the $4.7 billion MidAmerican deal. Many Constellation shareholders say that deal undervalues the company.
Trying to outflank Mr. Buffett is a bold move for EDF and its chairman, Pierre Gadonneix. But EDF has a lot at stake, including a 9.5% holding in Constellation on which it has suffered heavy losses and a plan to expand its nuclear-power empire in the U.S. that depends on an existing joint venture with Constellation.
The French company also believes that its offer is superior to that of MidAmerican, and would result in a standalone value for Constellation of $52 a share, nearly double what MidAmerican is offering.
As part of the three-pronged deal, EDF is offering to inject $1 billion into Constellation immediately in exchange for preferred shares. That would effectively be a down payment on EDF's offer to take a 50% stake in Constellation's nuclear-power generating and operating business for $4.5 billion. EDF said it will also offer to buy up to $2 billion in nonnuclear-generation assets from Constellation.
AFP/Getty Images
Logos of Electricite de France
Constellation agreed in September to sell itself to Mr. Buffett, after market turmoil hobbled its energy-trading business and forced the company to the brink of bankruptcy. Needing to move quickly, Constellation chose MidAmerican's offer of $26.50 a share, plus a cash infusion of $1 billion, over a $35-a-share deal with EDF, which had teamed up with private-equity firms Kohlberg Kravis Roberts & Co. and TPG to make its bid.
The French state-controlled company later indicated it might make a new offer. This time around, EDF isn't partnering with the buyout firms.
EDF is confident that it won't face significant regulatory hurdles and expects to be able to close the deal six to nine months after signing. Its proposal wouldn't require a new shareholder vote or approval from Maryland state regulators.
Another factor that could work in EDF's favor is the deal Mr. Buffett originally negotiated. Should EDF prevail, Mr. Buffett could walk away with more than $500 million in cash, including a $175 million breakup fee, a $1 billion note and a 10% stake in Constellation, all in exchange for the $1 billion MidAmerican already invested in the company.
The new deal would also ease EDF's concerns about what the MidAmerican deal would mean for UniStar Nuclear Energy, a joint venture between EDF and Constellation to build and operate new nuclear reactors in North America. Constellation also owns a regulated utility, Baltimore Gas and Electric Co.
EDF completed buying its stake in September, when Constellation shares were worth over $60, meaning the price of the Buffett deal represents a loss of hundreds of millions of dollars for the French company.
EDF's new offer isn't conditioned on its ability to raise funds, or due diligence, people familiar with the matter said. EDF plans to finance the transaction with its existing cash and credit.
In trading Wednesday in New York, Constellation's shares rose 10% to $27.70. In Paris, EDF's shares fell to €44.34 ($56.33), down 22 European cents.
Write to Dana Cimilluca at and David Gauthier-Villars at

Can a car be too quiet?

Everyone agrees that electric cars are the future. But they have one big problem - they don't make nearly enough noise. Patrick Barkham reports

Patrick Barkham
The Guardian, Thursday December 4 2008

The noise of an electric vehicle used to be unmistakable - a loud whining crescendo followed the clank of milk bottles. Now, however, virtually silent mass-produced electric cars will soon be creeping down our streets. They eradicate noise pollution, and air pollution, but raise a new problem - for pedestrians, cyclists, and particularly for the blind and partially sighted.
Back when electric cars looked like golf buggies and tootled along at 20mph, the absence of a throaty combustion engine was no great danger. But electric vehicles are now matching ordinary cars in speed, with trials of a 95mph electric Mini beginning next year in the US, and electric sports cars, such as the forthcoming 130mph Lightning, which, it is claimed, do 0-60mph in less than four seconds.
Road safety groups are worried about children and cyclists, who are dependent on listening when changing lanes. Charities for blind people are also concerned. "We're not saying we shouldn't have electric vehicles, but we need to consider the safety implications for partially sighted people and other vulnerable pedestrians," says Clive Wood of Guide Dogs for the Blind. "It would be better to do this now, rather than wait until we have a high number of quiet vehicles on the street."
Andy de Sallis, managing director of Gem electric vehicles, points out that its cars still make a noise through their tyres, and an electric purr. Gem, which supplies vehicles to local governments, businesses and police forces, also fits a warning button to its machines which is less intrusive than a horn but makes a noise like a truck reversing. Wood, however, says that is not sufficient. "It puts the onus on the driver to recognise someone who is visually impaired, and partially sighted people are not always easy to identify. They don't all have guide dogs or white canes."
Wood wants the Department for Transport to investigate the issue and establish a set of minimum requirements for vehicle noise in the UK. In California, where more than 350,000 electric or hybrid vehicles cruise the boulevards, a committee will next year make recommendations about noise-making safety features for electric vehicles which could then be introduced as law by the governor, Arnold Schwarzenegger.
Dan Kysor of California's Council of the Blind, who uses a guide dog, reported several near misses with hybrids. He found them particularly dangerous when they were stationary in traffic because the engine shuts down. "I can sense there's a big object nearby, but because it's not making any noise, I can't tell what it is," he says.
A University of California study found that a petrol/diesel car could be heard 36ft (11 metres) away, but an electric Toyota Prius was not heard until it was 11ft from blindfolded volunteers. "If you're going at 30mph and you've only got 11ft to stop, there is a real danger," says Matthew Reed of Lotus Engineering. He became aware of safety concerns when Lotus made its first electric car. As it was driven around its factory, there were a couple of occasions when engineering staff nearly had accidents because they didn't hear it coming.
So Lotus engineers have re-created external noise by playing a recording of a Toyota petrol engine through waterproof speakers tucked under the car's radiator. The faster it goes, the more sound is emitted. This "external sound synthesis" is not yet in production but Reed says there has been "massive interest" from electric car companies.
It sounds bizarre but according to Lotus's chief noise engineer, Colin Peachey, synthetic noise is far less intrusive than an ordinary engine. In normal cars, engine noise is projected in all directions, particularly upwards. With this system, sound mapping shows it is beamed forwards, delivering noise to the relevant areas ahead of the car's direction - and not into bedroom windows for instance.
But why recreate an engine noise? Why not project birdsong or heavy metal? "Making a noise like a conventional car is the only answer for someone who is partially sighted," says Peachey, who explains that the visually impaired can tell from the level and pitch of an engine sound not only how close a vehicle is, but how fast it is travelling. Until all cars are electric, he says, they need to emit a commonly recognised and predictable sound that won't get drowned out by other engines.
It seems that the purr of the petrol engine - or something that sounds very like it - will probably echo along our streets for a while yet.

Electric shock as sales of green cars go into reverse

The Times
December 4, 2008
Ben Webster

Sales of electric cars have fallen by more than half this year, according to figures released two days after the Government’s climate change advisory body predicted a huge increase.
Only 156 electric cars were sold from January to October, compared with 374 for the same period last year.
Nice Car Company, one of the two main British distributors of electric cars, went into administration yesterday. Set up in 2006, the company had been selling an all-electric version of the French-made Aixam Mega. It had also planned to bring a range of new models to market by the end of the year. However, sales dropped to fewer than one car a week.
Richard Bremner, editor of, which specialises in green motoring, said: “While volumes are still tiny, any drop in electric car sales will come as a shock. Buyers could be holding off for cars from mainstream manufacturers, although they may still have years to wait.”
The Committee on Climate Change said on Monday it expected electric and hybrid vehicles to form up to 40 per cent of cars on the road by 2020.
There are about 1,100 all-electric cars currently on British roads — 0.004 per cent of the total. Most are owned by Londoners and are quadricycles, not fully type-approved cars.
Congestion-charge concessions for all-electric vehicles helped to create the market, but drivers have since opted for new small diesel cars with very low carbon emissions.

Go-ahead for giant wind farm

By Alan Jones, PAWednesday, 3 December 2008

One of the biggest offshore wind farms in the world is to be built off the UK coast after being given the go-ahead by the Government, it was announced today.
Npower said between 150 and 250 turbines will be built eight miles off the North Wales coast, close to a current windfarm and the site of another development near the resort of Rhyl.
The Gwynt y Mor wind farm will be the second biggest in the UK and the world and will start to produce power from 2012, subject to consent for onshore electricity works.
The new development will be capable of generating enough power for half a million homes.
Paul Cowling, managing director of npower renewables, welcomed Government approval for the scheme, adding: "This is an important step towards realising this ambitious project.
"The decision underlines the Government's commitment to massively expanding renewable energy generation in the UK to help tackle climate change and improve security of energy supply."
Npower, owned by energy giant RWE, already operates the North Hoyle wind farm off the North Wales coast, the UK's first major offshore wind farm.
Its second offshore wind farm, Rhyl Flats, is now under construction and is expected to be operational next year.

Go-ahead for wind farm puts Wales on track to meet clean energy targets

• Offshore array will power 700,000 homes a year• Project will be world's second largest by 2014
Alok Jha, green technology correspondent
The Guardian, Thursday December 4 2008

The Burbo Bank offshore wind farm in the mouth of the river Mersey, a smaller cousin of the proposed Gwynt y Mor project off the north Wales coast. Photograph: Christopher Furlong/Getty Images
Wales took the biggest step yet towards its target to become the UK's leader in renewable energy yesterday when the government granted permission for a 750MW wind farm off the north coast which, when finished in 2014, will be the second largest in the world.
The Gwynt y Môr wind farm, to be built by the energy company Npower Renewables, will be eight miles off the coast of north Wales and, at maximum capacity, will be capable of generating enough power for the annual needs of more than 700,000 homes; it will be second only to the proposed 1GW London Array wind farm.
In February the Welsh assembly's environment and energy minister, Jane Davidson, announced a target to source all of Wales' electricity from clean sources by 2025. More than 30% of the carbon emissions from Wales come from electricity generation and, in a report on how to maintain supply while reducing greenhouse gas emissions, the Welsh government said it wanted at least 1GW each of onshore and offshore wind farms (possibly rising to 2GW of onshore wind) as well as biomass plants. Further clean power could come from the proposed Severn barrage, a scheme to harness tidal energy that could generate up to 5% of the UK's electricity needs.
Ed Miliband, the energy and climate change secretary, said the North Wales coast could become a powerhouse for renewable energy. "The UK must clean up its energy supply to fight the damaging effects of climate change and more wind power will help us do this. The UK is leading the world in offshore wind, and the developments off the coast of North Wales will help keep us frontrunners."
In October the UK overtook Denmark as the world's leader in generating power from offshore wind farms. Energy company Centrica's completion of the 194MW wind farm off the coast at Skegness, Lincolnshire, brought the UK's total built offshore capacity to 590MW, compared with Denmark's 423MW.
Neil Crumpton, energy campaigner for Friends of the Earth, said Gwynt y Môr was an important step for Wales. "Projects like this are urgently needed to help tackle the immense threat of climate change and create new jobs. Gwynt y Môr will boost the green energy revolution, and cut carbon dioxide emissions by around 2m tonnes a year."
A spokesman for the British Wind Energy Association said Gwynt y Môr brought the total offshore wind projects in planning stages to 4.5GW. "It will also set us well on our way towards reaching our 2020 renewable energy targets. The offshore sector remains vibrant."
Npower Renewables, owned by energy giant RWE Innogy, already operates the UK's first big wind farm, the 60MW North Hoyle array, off the coast of Rhyl in north Wales. This feeds 40,000 households with 30 turbines. The company is also constructing a second wind farm, Rhyl Flats, which is rated at 90MW and will become operational next year.
The Gwynt y Môr farm will consist of an array of 3MW and 5MW turbines with rotor blades of up to 130m. Construction will begin in 2011 and last for three years.
Greenpeace's chief scientist, Doug Parr, said: "Our country has some of the best engineers in the world, a highly skilled manufacturing sector as well as the most powerful renewable resources in Europe. This is a big step forward, and it now needs to be followed up by an ambitious government strategy to unlock the massive potential of offshore wind to secure our energy supplies, fight climate change and create thousands of new British jobs."
Paul Cowling, managing director of Npower Renewables, said: "The decision underlines the government's commitment to massively expanding renewable energy generation in the UK to help tackle climate change and improve security of energy supply. We are equally dedicated to these aims, with RWE Innogy committed to spending around €1bn across Europe on renewables every year until 2012."

Scientist warns against overselling climate change

Climate change forecasters should admit that they cannot predict how global warming will affect individual countries, a leading physicist has said.

By Louise Gray, Environment Correspondent Last Updated: 10:41PM GMT 03 Dec 2008
Lenny Smith, professor of statistics at the London School of Economics, said that scientists risk "blatantly overselling what we know. That could bring everything down and cost the world valuable time".
As the world gathers to decide a new way forward on climate change, he said the data produced by models used to project weather changes risks being over-interpreted by governments, organisations and individuals keen to make plans for a changing climate – with dangerous results.
"They are certainly right on the basic story of global warming. Man-made climate change is real.
"However, there is a risk that something important will happen that is not predicted by any of today's models – and they cannot give us trustworthy forecasts of climate for regions as small as most countries are. The bottom line is that the models help us understand pieces of the climate system, but that does not mean we can predict the details."
More than 192 countries have gathered at the UN Climate Change Conference in Poznan, Poland to decide a new Kyoto Protocol. The main issues will be whether developed countries like the US will commit to cutting emissions, paying developing countries to stop deforestation and an adaptation fund to help poorer people adapt to climate change.
Professor Smith, told the New Scientist magazine, said climate change negotiations should stick to the facts.
"Effective application of climate science hinges on clear communication of which results we believe are robust and which are not.
"Any discussion of such limits can be abused by those seeking only to confuse. But failing to discuss those limits can hinder society's ability to respond, and also compromise the future credibility of science.
"Let's forget the spurious certainties, and even the spurious possibilities and concentrate on what matters."

Foot-dragging as the ice melts

European leaders have claimed the moral high ground in fighting climate change, but the reality is less impressive

David Cronin, Wednesday December 3 2008 14.00 GMT

In one sense, George Bush has been a godsend for Europe's politicians. By allowing his chums in the oil industry to dictate his environment policy, he has helped decision-makers this side of the Atlantic claim they are world leaders in fighting climate change.
Stavros Dimas, the EU's environment commissioner, has exploited this opportunity to the full. Throughout 2008, he has repeatedly described a package of measures he unveiled in January as the most far-reaching legislation against global warming introduced anywhere.
Superficially, the boast may be accurate. Examine it a bit more closely, though, and it looks about as impressive as a schoolboy displaying his enormous collection of bubblegum cards in a windswept playground.
Being a leader by default rather than by conviction carries the risk of belly-flopping from the moral high ground. That is a risk to which EU figures are exposing themselves during the latest round of international climate change talks in Poznan, Poland.
While the sensible thing would have been to ensure that a robust position had been approved by all EU governments ahead of these talks, the union is going into them in something of a muddle. No agreement has yet been clinched on the final shape of the package which Dimas is trumpeting but it is almost certain that it will be diluted drastically. True to form, Silvio Berlusconi has been the most vociferous in advocating that the climate should be sacrificed to a myopic vision of economic expediency. Yet many of his fellow presidents and prime ministers are also eager to paint the EU's environmental agenda the palest shade of green they can find.
Nominally, the package put forward in January is based on the principle of "effort-sharing" between governments. The newest version of the proposals makes a mockery of that whole idea by allowing most of the reduction of greenhouse gases to which the EU has committed itself to be undertaken outside its borders by financing "clean development" schemes. So while the EU has pledged to slash its emissions by a minimum of 20% by 2020, as little as 3.5% of the reduction effort may take place at home.
This is a clever – and cowardly – ploy to avoid decisive action. The concept of offsetting that it invokes may have helped salve the conscience of frequent flyers in recent years but it is a flimsy basis on which to craft a policy for 27 countries.
Clean development is no longer an innovative idea. It has already been part of the Kyoto protocol since 1997 and in the words of India's science minister Kapil Sibal its application has been a total farce. The transfer of environmentally-benign technology to poor countries that it was supposed to usher in has occurred at a fraction of the required level. Ecologically dubious projects – such as the construction of vast dams – are also being funded in the name of clean development.
Another key component of the EU's package involves the revamping of its emissions trading system.
Earlier this year Dimas recommended that the allocation of free allowances for pollution licences – the standard practice since the system's launch in 2005 – would be "phased out progressively" from 2013 onwards.
France, the holder of the EU's presidency, is now smoothing the way for a capitulation to scaremongering by makers of chemicals, paper, glass, steel and cement. All of these industries have been warning that if they have to pay for licences they will be forced to quit Europe for countries with lower environmental standards. For the most part, their predictions of doom have not been backed up by evidence. A study by the research network, Climate Strategies, indicates that the risks of relocation are exaggerated, stating plainly that steel companies are unlikely to pack up and leave an area in which they have large capital investments, and that factors other than environmental laws are more likely to determine where a firm operates.
Nonetheless, the French are recommending that all allowances to sectors at a "high risk" of leaving the union should continue to be awarded free until 2020 at the earliest.
In September, Dimas cited reports of major ice loss in the Arctic as a reason why it is vital to move towards a low-carbon economy. More recently the environmental group WWF has published a study stating that the one degree Celsius of global warming that the planet has experienced until now may have been sufficient to completely clear the Arctic of ice. Climate change could be rapid and abrupt, rather than the gradual process that has so far been forecast, the report added.
Perhaps the most hackneyed expression in today's ecological discourse is that doing nothing is no longer an option. Doubtlessly, some of the EU's representatives will utter this phrase in Poznan. The tragedy is that they not willing to do very much themselves.

We Need a Global Carbon Tax

The cap-and-trade approach won't stop global warming.

If President Barack Obama wants to stop the descent toward dangerous global climate change, and avoid the trade anarchy that current approaches to this problem will invite, he should take Al Gore's proposal for a carbon tax and make it global. A tax on CO2 emissions -- not a cap-and-trade system -- offers the best prospect of meaningfully engaging China and the U.S., while avoiding the prospect of unhinged environmental protectionism.
David Gothard
China emphatically opposes a hard emissions cap on its economy. Yet China must be part of any climate deal or within 25 years, notes Fatih Birol, chief economist at the International Energy Agency, its emissions of CO2 could amount to twice the combined emissions of the world's richest nations, including the United States, Japan and members of the European Union.
According to the world authority on the subject, the Intergovernmental Panel on Climate Change (IPCC), it will cost $1.375 trillion per year to beat back climate change and keep global temperature increases to less than two degrees Celsius (3.6 degrees Fahrenheit).
Cap-and-traders assume, without much justification, that one country can put a price on carbon emissions while another doesn't without affecting trade or investment decisions. This is a bad assumption, given false comfort by the Montreal Protocol treaty, which took this approach to successfully rein in ozone-depleting gases. Chlorofluorocarbons are not pervasive like greenhouse gases (GHGs); nor was the economy of 1987 hyperglobalized like ours today.
Good intentions to limit big polluters in some countries but not others will turn any meaningful cap into Swiss cheese. It can be avoided by relocating existing and new production of various kinds of CO2-emitting industries to jurisdictions with no or virtually no limits. This is known as carbon leakage, and it leads to trade anarchy.
How? The most advanced piece of climate legislation at the moment, the Lieberman-Warner Climate Security Act, contains provisions for retaliatory action to be taken against imports from carbon free-riding nations. Married with the current economic malaise, the temptation to slide into a righteous but runaway environmental protectionism -- which Washington's K Street lobbyists would be only too happy to grease -- would almost certainly lead to a collapse of the multilateral trading system. This scenario was presented to the world's trade ministers last December at the United Nations climate talks in Bali by David Runnalls of the International Institute for Sustainable Development.
True, trade anarchy might reduce emissions via a massive global depression. But there would be a lot of collateral damage. Because of the sheer scale of the challenge and the state of the hyperglobalized economy, we will need the same price on carbon everywhere, or it won't work anywhere.
President Obama can define his legacy in the first 100 days by laying the groundwork for a global tax on carbon dioxide emissions that is effective, efficient, equitable and enforceable. An effective, harmonized tax on C02 emissions must stabilize the growth of atmospheric concentrations of GHGs by no later than 2020. The tax must also be adjusted annually, by a global body, according to this objective.
The IPCC has crunched the numbers and says this means a tax of about $50 levied on every metric ton of GHGs, or carbon dioxide equivalent (CO2e to use their terminology). In the short-term, consumers would feel the pinch. But the tax would pave the way for cheaper, cleaner energy and ways of getting around.
The most efficient way to apply a carbon tax is at a relatively small number of major carbon bottlenecks, which cover the lion's share of GHGs. The key points where flows of carbon are the most concentrated include: trunk pipelines for gas, refineries for oil, railroad heads for coal, liquid natural gas (LNG) terminals, cement, steel, aluminum and GHG-intensive chemical plants.
Collecting and spending the bulk of revenues from a carbon tax must remain the sovereign right of participating nations. For instance, nations could decide to make the tax revenue-neutral by reducing taxes on income or helping finance industrial retooling for a green economy.
However, we in the rich world must recognize our culpability for creating three-quarters of this global warming mess, as well as our greater capacity to finance industrial retooling. Thus, there could be a carrot for developing-world nations which commit to applying the phased-in carbon tax: Access to a portion of the carbon tax levies from rich countries to help preserve forests and to prepare for climate change through flood walls, improved irrigation, drought resistant crops, desalination facilities, and the like. This is no small change: 10% of $50/metric ton CO2e carbon tax levied in all rich countries would be $100 billion per year. The stick for carbon free-riding countries would come in the form of incrementally severe penalties, leading up to countervailing duties on carbon-intensive imports.
A global carbon tax levied on a relatively small number of large sources can be monitored by satellite and checked against the annual surveillance of fiscal and economic polices already carried out by IMF staff. Thus, the accounting involved is much more precise and much less subject to the vagaries of corruption and conflict over which industries and companies get their free handouts of carbon credits -- carbon pork -- than in a cap-and-trade system.
There are three reasons why countries, such as China and India, that have traditionally resisted any notion of a common responsibility to make current polluters pay would do well to enlist in this effort.
First, while there is no limit on the downside for missing a hard cap, with a carbon tax you just pay as you go. If a fast-growing country like China accepted an emissions cap and then overshot it, they would have to purchase carbon credits on the international market. If they missed their target by a lot, carbon credits would be scarce, and purchasing them would suck dry their foreign exchange reserves in one slurp. That's why a carbon tax is much easier to swallow and, anyway, through the power of the price signal, it would produce the same desired result as a hard cap.
Second, administering billions of dollars of carbon credits in a cap-and-trade system in an already chaotic regulatory environment would invite a civil war between interest groups seeking billions in carbon credit handouts and the regulator holding the kitty. By contrast, a uniform tax on CO2 emissions levied at a small number of large sites would be relatively clear-cut. During the Montreal Protocol talks in the 1980s, India smartly balked at a suggestion to phase out CFCs in certain products and not in others because of the chaos that would result from the ambiguity.
Third, key people in China read our newspapers. They see the ominous clouds of protectionism under the guise of environmentalism in bills like Lieberman-Warner and they don't want to be harmed; neither should we, given the trillions of dollars of Treasury bills they hold. Showing compliance with a harmonized carbon tax at a small number of large bottleneck points would be child's play compared to the chaos of cap-and-trade.
If President Obama hits the ground running fast in the direction of a global carbon tax, he can usher in a new dawn that might finally make peace between man and climate.
Mr. Nader is a consumer advocate and three-time presidential candidate. Toby Heaps is the coordinator of Option 13, a campaign to help broker a successor to the Kyoto Protocol that includes all major nations.

EDF stymies Warren Buffett with $4.5bn Constellation deal

December 4, 2008
Robin Pagnamenta, Energy and Environment Editor

EDF, the nuclear power operator, has bid $4.5 billion (£3 billion) for a half-share in Constellation Energy of America, in an attempt to frustrate a takeover offer by Warren Buffett, the bil-lionaire investor.
The French state-controlled energy group has offered the cash in exchange for a 50 per cent stake in Constellation’s nuclear operations, having backed down from a full takeover bid in October.
Constellation is a leading operator in the nuclear power market in the United States and is viewed by EDF, the world’s biggest nuclear power operator, as a high strategic priority for its international expansion plans.
EDF, which already owns 9.5 per cent of the shares in Constellation, is already committed to a £12.5 billion takeover of British Energy, the UK nuclear generator.

EDF has offered $52 a share for the Constellation stake, representing a 96 per cent premium to an earlier $26.50-per-share offer tabled by Mr Buffett’s MidAmerican Energy Holdings.
Shares in EDF fell by 6 per cent after the announcement, amid fears that the French company was overextending itself with two large international investment plans at the same time. However, the stock recovered to close almost unchanged at €44.54.
Constellation operates three nuclear power plants containing five reactors in Maryland and New York, as well as other conventional power stations. Nuclear power represents 61 per cent of its total generating capacity of 8,700 megawatts. However, Constellation is in financial difficulties and needs a $1 billion cash injection to avoid bankruptcy.
EDF, which pulled out of its $35-a-share offer for the whole of Constellation, has offered this infusion as part of its bid. EDF is already in business with Constellation, after an agreement in July 2007 to help it to build two French-designed nuclear reactors.