Competition Policy Newsletter

EdF/BE: Yin and Yang — why complementarity can be problematic MERGER CONTROL

Miriam Driessen Reilly, Polyvios Panayides and Raphaël De Coninck (1)

I. Introduction(1 in France, EdF and its subsidiaries are active globally in all segments of the electricity markets: generation On 24 September 2008, following ongoing talks and wholesale trading, transmission, distribution with , EdF announced that it had and retail supply of electricity to all groups of cus- agreed a takeover of the company for the sum of tomers. (2) In particular, EdF prides itself on being £12.5 billion. On 3 November 2008, given that the the world’s leading nuclear power utility, operating a transaction had a Community dimension within the French nuclear fleet consisting of 58 reactors across meaning of the Merger Regulation, EdF notified to 19 different sites. Within the UK, however, in terms the Commission its intention to take sole control of generation of electricity, prior to the transaction of the company, having made a public offer to pur- EdF UK had no nuclear assets. Rather its generation chase its entire issued share capital. portfolio was comprised of gas and coal fossil fuel plants. The parties’ activities would overlap in several areas of the British electricity markets. The deal would British Energy is a plc limited by shares, incorpo- also strengthen the vertical integration of the com- rated under the laws of and listed on the bined post-merger entity. On examination, it was London Stock Exchange. It was established in 1995 found that even though the combined shares of the to operate the eight most modern nuclear power two companies were not extremely high, there were plants in the UK (3) and privatised in 1996. Oper- some aspects of concern specific to the electricity ating exclusively in the UK, it is active in the Brit- markets under investigation. These concerns were ish markets for generation and wholesale trading of to a large extent linked to the fact that the combined electricity and retail supply of electricity to industrial post-merger entity would in many respects be high- and commercial customers. ly complementary. In particular it would combine EdF’s flexible UK fossil fuel plants with British En- The company had been in financial difficulties for ergy’s almost exclusively nuclear fleet, a source for some time in 2002, when it first approached the baseload electricity, leading to concerns about a pos- British Government for financial aid. In the run-up sible withdrawal strategy. Secondly, the deal would to the takeover, notwithstanding financial assistance, combine two strong players on the British wholesale British Energy faced challenges due, among other electricity market, one with a “short” position and things, to its plants’ ageing technology and sched- the other with a “long” one, thereby potentially fa- uled closures of its AGR fleet. In the context of cilitating a reduction in liquidity on the wholesale the HM Government White Paper on New Nuclear market. Finally, the deal would give EdF access not Build, the company took the decision to seek a busi- only to nuclear capacity but also to a high propor- ness partner. The British Government supported tion of sites most likely to be suitable for a first this and consequently the decision by the Board of wave of new nuclear build with the consequence of British Energy to recommend British Energy share- removing many possibilities for competitors to ac- holders to approve a takeover by EdF. quire such sites. Following a substantive analysis including an in- III. Market definition depth first-phase market investigation and coop- eration with the UK regulator for gas and electricity The parties’ activities were found to overlap on the (Ofgem), the Commission decided to clear the case, markets for generation and wholesale supply of subject to substantial remedies. electricity, retail supply of electricity to industrial and commercial customers, sites for new nuclear II. The parties and the transaction build, carbon trading, procurement of nuclear fuel and financial electricity trading. No particular issues Electricité de France (EdF) is a mainly state-owned were found to exist in relation to carbon trading, French energy company listed in Paris. While based (2) EdF is also active in other energy-related activities. (1) The content of this article does not necessarily reflect the (3) Taking two AGRs from Scottish Nuclear and five AGRs official position of the European Commission. Responsi- and a PWR from . The assets of bility for the information and views expressed lies entirely these two companies were transferred to Magnox Electric, with the authors. which later became part of British Nuclear Fuels.

Number 1 — 2009 77 Merger control procurement of nuclear fuel or financial electricity commercial (“I&C”) customers which do use half trading. hourly rates. (9)

Wholesale electricity markets In this case, the parties submitted that the relevant product market is the broader market for the sup- Both parties were active in the wholesale electricity ply of electricity to all industrial and commercial markets in Great Britain. The parties agreed with the (“I&C”) customers, encompassing supply at both approach taken by the Commission in previous cas- half hourly (HH) and non-half hourly (nHH) rates. es, according to which there is a single product mar- This was not supported by the market investigation, ket for both electricity generation and wholesale sup- which clearly favoured the subdivision of the retail ply. Furthermore, in line with the Iberdrola/Scottish electricity market into the three categories men- Power (4) decision, no distinction was made between tioned above. (10) the different sources of electric energy (5) within the wholesale electricity market for the purpose of As for the wholesale market, the Commission found market definition. (6) However, the Commission did the relevant geographic market to be Great Britain investigate whether the various sub-segments of the (England, Scotland and Wales, excluding Northern 11 wholesale market (non-standard non-brokered, OTC Ireland). ( ) brokered, Power Exchange and Balancing Mecha- nism) could comprise separate markets. It also ex- Sites for new nuclear build amined whether, within the OTC brokered segment, the various products traded (such as baseload and The definition of a market for sites for new nuclear peakload) constitute separate markets. This was not 7 build is set against a background of the need for the supported by the market investigation. ( ) UK to address the renewal of the large number of Geographically, the Commission, as supported by power stations due to close over the next 15 years the market investigation, considered that the rele- and the adoption of policies on energy and climate change, which support the building of new nuclear vant market comprises the whole of Great Britain. 12 This area is regulated by BETTA (8) and therefore power stations. ( ) In particular, there is an ongoing subject to similar conditions of competition. Strategic Siting Assessment (SSA) procedure which is to establish a list of suitable sites to be included in the National Policy Statement (NPS), expected to be Retail supply of electricity to industrial published in early 2010. and commercial customers The Commission made no distinction between the In the past, the Commission had identified separate different sources of electric energy for the whole- product markets for large and small industrial cus- sale market. However, it considered in the light of tomers. In relation to the British market, it had dif- the particularities of the ongoing SSA and of the ferentiated between customers on the basis of kW special characteristics of such sites (13) that there is a demand. However, following liberalisation of the separate product market akin to a real estate market electricity markets, there were findings that the re- for sites considered suitable for building new nu- tail electricity market could be subdivided between clear power stations. At least in the first wave of three categories: domestic customers, smaller indus- new nuclear development, expected over the next trial and commercial customers (SMEs) which do ten to fifteen years, this market can be expected to not use “half hourly rates” and large industrial and include a limited number of sites. According to the 2008 White Paper (14) these are expected to be in the (4) Case M.4517 — Iberdrola/. vicinity of existing nuclear facilities. This position (5) Gas fired, coal fired, nuclear, hydroelectric power stations, was strongly supported by the results of the market wind farms or others. (6) The technology portfolio of each generator played a cen- investigation. tral role in the competitive assessment, however, as de- tailed in section IV. (9) Half-hourly rates are used for consumers whose consump- (7) Rather, the market investigation favoured the retention tion can effectively be metered on a half-hourly basis. of the definition of one wholesale electricity market com- (10) Market division also supported by the market investiga- prised of different segments. This can also be said for the tion in case M.2890 — EdF/Seeboard. various products sold (weekday, weekend, baseload, peak (11) This is in line with the market definition in case M.4517 hours, etc). The majority of respondents indicated that — Iberdrola/Scottish Power. splitting these products into separate markets would not (12) The 2008 White Paper on Nuclear Power states that new be appropriate, as different products simply represent dif- nuclear stations should have a role to play in the country’s ferent groupings of the same basic trading units, which future energy mix alongside other low carbon sources. are half-hourly quantities. (13) See the Jackson Report. (8) British Electricity Trading and Transmission Arrange- (14) Meeting the Energy Challenge: A White Paper on Nuclear ments. Power, January 2008 CM 7296; see pages 127-129.

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In relation to the geographic market for new nuclear Beyond market shares, the impact of such a transac- MERGER CONTROL build, the Commission decided to leave the scope tion therefore critically depends, among other things, of the market open. (15) on the generation portfolio of the parties and their competitors. In this respect, the merger of EdF and IV. Competitive effects of the merger British Energy could be seen as a textbook example of a situation in which combining generators with As mentioned above, even though the combined complementary technology portfolios could lead shares of the two companies were not extremely to higher prices through capacity withholding. The high, the case raised issues quite specific to the elec- proposed transaction would bring under common tricity markets under investigation. control British Energy’s mostly baseload and pre- dominantly nuclear capacity with EdF’s flexible ca- Withholding in the wholesale market pacity (coal and gas). This led to the potential con- cern that the merged entity would have an incentive The parties’ market shares on the UK wholesale to withhold flexible capacity in order to increase the electricity market were not particularly high, and market price that it would receive on its infra-mar- would not necessarily appear, at first sight, to con- ginal units. This effect is a direct consequence of stitute a serious source of concern. The transaction the merger since, post-merger, the combined entity would lead to a combined market share in the UK could benefit from price increases on a larger pro- wholesale electricity market lower than 30%, with duction base and have more opportunities to with- an increment of less than 10%, while the parties hold flexible capacity. face a number of competitors in the UK, including E.ON, SSE, RWE, Iberdrola/Scottish Power, Inter- Ultimately however, the extent to which the pro- national Power, Drax and Centrica, each of them posed operation would be likely to lead to anticom- having a market share between 5% and 15%. (16) Yet petitive effects is an empirical question. In particular, the Commission found that the transaction, as ini- the effect of the merger on prices would depend, tially notified, would lead to significant competition among other things, on the slope of the supply concerns on the wholesale electricity market. This curve, the ranking of each plant in the merit order finding followed a detailed economic analysis of the and the level of demand, which typically varies hour effects of the transaction. by hour. In order to estimate the likely impact of the Given the specific characteristics of electricity mar- transaction, the parties submitted a model incorpo- kets, market shares only constitute a very crude rating the assumption that prices are set on the basis indicator of the likely effect of a merger between of the marginal cost of the most expensive plant on electricity generators. For example, one essential the merit curve that is called into production, and characteristic of electricity is that it cannot be stored. based on which the impact of different withdrawal In addition, demand for electricity is inelastic and is strategies was considered. characterised by a high degree of variation. (17) Giv- en these specificities, a mix of generation technolo- The Commission carried out a substantive sensitiv- gies is usually used so that supply can meet demand ity analysis of the model provided by the parties. at any point and market imbalance or rationing is In order to reflect more accurately the technical avoided. Technologies with a low marginal cost of constraints faced by the plant operator if it were production, also known as baseload technologies, to engage in a withdrawal strategy, the Commission tend to be used most of the time, while other, more also considered a wide range of possible withdrawal expensive, technologies may be used only when de- strategies, defined as the minimum period during mand is high. which a plant could be withdrawn, and incorporated in the model an estimate of the cost of withdrawal (15) In the first instance, nuclear power plants supply the for each plant. On the basis of this detailed empiri- wholesale market and as such it was considered that it cal analysis, the Commission found that the results could not be larger than national. The SSA is also theo- retically national. On the other hand, the Scottish authori- of the model provided by the parties were very sen- ties do not support new nuclear build and can prohibit it sitive to assumptions concerning demand, capacity in Scottish territory. Therefore it was left open whether as and other variables, such as the marginal cost of a minimum the market should be defined to include only certain plants, (18) and that the transaction would potential sites in England and Wales or whether it would lead to significant price increases under a number be national further to the issuance of the National Policy Statement. of plausible assumptions. (16) Figures on market shares are valid both for installed ca- pacity and for effective production. (18) The Large Combustion Plants Directive (LCPD) restricts (17) Part of this variation is predictable well in advance (as the running hours for opted-out coal plants to 20 000 be- it relates for example to differences between weekends/ tween 2008 and 2015 (8 years) before they must be retired. weekdays, seasons, time of the day), but part of it is not (as The marginal cost of the opted-out plants was increased e.g. it relates to weather conditions). in order to take this constraint into account in the model.

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In addition to the quantitative analysis, a number of customer harm as a result of reduced liquidity (tak- qualitative arguments were considered since the UK ing into account the efficiencies brought by vertical market differs in many ways from this simplified integration), the Commission’s first-phase investiga- model representation. In particular, the UK market tion established serious concerns with respect to the structure is prominently characterised by bilateral ability and incentive for the merged entity to inter- and forward trading and a correspondingly small nalise trades and thereby affect trading possibilities spot market. However, the Commission concluded of competitors, including new entrants. In addition, that this specificity of the UK wholesale electricity the Commission estimated the possible reduction of market does not imply that the merged entity would liquidity that could result from the merger on the ba- lack the ability to increase prices. In fact, post-merg- sis of a series of market characteristics and assump- er, the merged entity could reflect its ability to with- tions (such as e.g. the merged entity’s future hedging hold capacity in the price of its forward contract strategies, the availability of power plant, the type of sales independently of whether it actually withholds product traded or the existence of long-term con- capacity in the short term. tracts), which was necessary to assess the likely im- pact of the remedies proposed by the parties. The discussion above only sketches some of the main findings of the very detailed analysis carried out by the Commission in this case, from both a Retail supply of electricity to industrial qualitative and a quantitative standpoint. The Com- and commercial customers mission’s investigation relied not only on a very de- The parties’ activities overlapped for industrial and tailed empirical analysis, but also on a full considera- commercial customers on both half hourly (I&C tion of the market’s specific characteristics, which HH) and non-half hourly (I&C nHH) rates. For included, among other things, the position of each customers on nHH rates, the increment of market market player by technology, the marginal cost of share was found to be very minor and the market production for each plant, the hourly variation of investigation did not identify any serious doubts for demand, the relationship between spot and forward this market. As regards I&C HH, the transaction prices, the presence of long-term contracts or the would lead to a combined market share of [30-40]% companies’ specific hedging strategies. Despite the by volume, with an increment of [10-20]%. As a re- relatively limited market shares of the merging par- sult of the deal, the combined entity would there- ties, the Commission concluded on the basis of this fore become the undisputed market leader in this comprehensive economic analysis that the transac- market. The investigation therefore focused on this tion could lead to anticompetitive effects on the segment of the retail market. wholesale electricity market. During its analysis, the Commission took into ac- Impact on liquidity: effects in the count data which indicated that there are sub- segments within the I&C markets with differing wholesale and supply markets customer characteristics based on expenditure, con- Another concern that was raised during the market sumption and number of sites within a portfolio. investigation is that the merger, as initially notified, However, the market investigation did not identify could lead to a reduction of liquidity in the whole- these segments as separate product markets. sale electricity market. British Energy has a long gen- The Commission found that the parties compete to eration position as it produces more electricity than a large extent on different segments of the customer it supplies to its final customers, while the opposite market. In particular it found that while EdF focuses is true for EdF, which buys part of the electricity it on multi-site customers consuming lower volumes, supplies to its final customers on the wholesale mar- British Energy focuses on very large high volume- ket. Respondents to the market investigation were consuming single-site customers. Although both concerned that the merger could lead to increased companies are active in the same market, they focus internal use of electricity that would otherwise have to a large extent on different types of customer, and been sold to the market. are therefore unlikely to exert a particularly strong competitive constraint on each other. Market test respondents indicated that there is cur- rently, and independently of the merger under re- The Commission also examined the substitutabil- view, a concern in the UK about relatively low levels ity of the products offered by the parties. Feed- of liquidity. Lower levels of liquidity may increase back from the market test indicated that the par- the cost of trading on the wholesale market and may ties’ products were not considered close substitutes possibly create barriers to entry on the retail mar- but that the products offered by EdF are similar to ket and/or wholesale market. Although further in- those offered by its main competitors. In this regard vestigation would be necessary to establish whether the Commission considered that the merged entity’s the proposed transaction would effectively lead to incentive to raise prices is more likely to be con-

80 Number 1 — 2009 Competition Policy Newsletter

strained when rival firms produce close substitutes of the merged entity a number of potentially suit- MERGER CONTROL to its products, as was the case at hand. able new build sites. (20)

As a consequence, while the combined entity would Third parties pointed out to the Commission that as be a market leader in the supply of electricity to I&C a result of the merger and because of the conditions HH customers, the Commission considered that contained in the Sites Undertaking for the release of EdF and British Energy are not particularly close sites by EdF, new entrants could be put at a time competitors. Remaining competitors active in the disadvantage and face higher risks. In particular, market, particularly E.ON, RWE and SSE, would be the conditions contained in the Sites Undertaking sufficient to ensure that competition is maintained. could delay the development of the Bradwell and Therefore the transaction did not give rise to serious Dungeness/Heysham sites as the release of land by doubts on this market. EdF was contingent on EdF obtaining the necessary consents and planning permission on other devel- opments. It was argued that this could clearly have Market for sites for new nuclear build the effect of preventing or delaying entry by other parties. Another concern raised during the market investiga- tion related to the fact that the merger, as initially In terms of the counterfactual (absent the merger), notified, would lead to a high concentration in the considering the high number of sites in the hands ownership of sites most likely to be suitable for a of British Energy and given the fact that it lacked first wave of new nuclear build. The merged entity the resources to develop at least a majority of these would hold or have some influence on the develop- sites on its own, it was likely that British Energy ment of seven out of nine (or seven out of ten) would have opted for a joint venture approach to such sites. This was of particular significance to the develop its sites jointly with competitors. As a con- transaction given that the British Government had sequence the market for sites for new nuclear build recently adopted new policies on energy and climate could be significantly altered by the merger in so far change which clearly support investments in nuclear as it removed many possibilities for competitors of new build as part of the UK’s electricity mix. (19) the merged entity to acquire such sites. Additionally, as the market investigation indicated, The market investigation carried out by the Com- the inherent uncertainty about the scope and timing mission identified nine to ten sites that are most of the release of sites (and which sites would be fi- likely to be part of the National Policy Statement nally released following the Sites Undertaking) could (NPS) and thus suitable for a first wave of new nu- act as a disincentive for competitors to invest in the clear build in the foreseeable future. At the time of considerable up-front planning work involved. the Commission’s market investigation, out of these potential sites for a first wave of new nuclear build, Finally, it was also considered relevant that the par- five belonged to British Energy while three be- ties to the transaction appeared to be in a very good longed to the Nuclear Decommissioning Authority position to compete with each other in new nuclear (NDA) and land at one site belonged partly to the build in the UK in the absence of the merger. EdF NDA and partly to British Energy. EdF had further- had already acquired land potentially suitable for nu- more already purchased land next to the NDA’s land clear generation in the UK at Wylfa and at Hinkley; at Wylfa and British Energy’s Hinkley site. There- it already held connection agreements which could fore, the merger, as initially notified, increased the support a nuclear reactor at each of these two sites control by the combined entity over the market for and is an experienced nuclear operator. sites most likely to be used for a first wave of new nuclear build. On the basis of the above considerations, the Com- mission expressed serious doubts as to the compat- Most of the respondents to the market investigation ibility of the transaction, as initially notified, with voiced concerns in relation to the potential domi- the common market. nance of the merged entity in the market for new build nuclear sites. On the other hand, the Commis- sion also took into account the Sites Undertaking which EdF had entered into with the British Gov- (20) The Sites Undertaking required EdF, in certain circum- ernment, as well as the Simultaneous Marketing stances, to dispose of specified areas of land adjacent to or Agreement (SMA) signed by EdF with the NDA, near existing nuclear sites, including land currently owned by BE. EdF had furthermore entered into a marketing both of which could make available to competitors agreement with the NDA, under which the NDA will of- fer through a competitive auction land at Bradwell, Old- (19) See the UK Government’s January 2008 White Paper on bury and Wylfa and at the same time EdF will offer its Nuclear Power. own land at Wylfa.

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Overlap in connection agreements ment (one coal-fired plant) in flexible technology for the merged entity compared to British Energy’s A further concern related to the number of con- pre-merger portfolio. Second, the baseload produc- nection agreements held by EdF and British Energy tion that would mostly benefit from a price asso- respectively, at specific locations, which could po- ciated with a withholding strategy is unaffected by tentially foreclose the opportunity for competitors the merger. Third, the merged entity would incur a to connect new power plants to the grid. It was spe- similar marginal cost for withdrawing flexible plants cifically claimed by third parties that the combined to that currently incurred by British Energy, since entity would hold a large portfolio of connection both the merged entity and pre-merger British En- agreements for gaining access to the transmission ergy only have coal-fired plants to withhold. This network, which could hinder other generators’ abil- conclusion was also confirmed by the Commission’s ity to develop new power plants. With respect to calculations on the basis of the model presented the merger-specific elements regarding connection above. agreements, the Commission identified an overlap between EdF and British Energy at Hinkley, allow- Impact on liquidity: effects in the ing the merged entity to hold connections for three nuclear reactors at that location, when in fact the wholesale and supply markets intention of the merged entity was to only develop In order to address the serious doubts raised by the two nuclear reactors at that location. Commission with respect to liquidity, the parties first proposed to commit to sell determined quanti- V. Remedies ties through auctions. The results of the market test In order to address the serious doubts identified by with respect to this proposal were in general rather the Commission, EdF submitted a remedy pack- negative. Not only were the proposed volumes gen- age consisting in (a) the unconditional divestment erally considered insufficient, but concerns were also raised with respect to the auction mechanism it- of the Eggborough Power Plant and an auction of 21 baseload electricity, (b) the unconditional divest- self. ( ) The parties subsequently revised their initial ment of a site at either Heysham or Dungeness and commitment, and instead committed to sell signifi- (c) the termination of one of the combined entity’s cantly higher volumes in the same way as the parties grid connections at Hinkley Point. Following a rela- currently sell electricity on the wholesale market, i.e. tively negative market test, EdF submitted a revised through OTC trades and/or structured trades agree- proposal, which was found to address the serious ments. The revised commitments also include provi- sions to ensure that the volumes are not purchased doubts identified by the Commission in relation to 22 (a) withholding, (b) liquidity reduction, (c) access to back by the merged entity. ( ) nuclear new build sites and (d) potential barriers to Considered in conjunction with the power plant entry caused by the holding of grid connections. divestitures, the proposed remedies significantly re- Whereas in line with the Notice on Remedies the duce the ability of the merged entity to internalise Commission clearly favours structural remedies, in British Energy’s long position and consequently any exceptional circumstances it may also consider be- possible negative impact on liquidity in the whole- havioural promises. In this case, in order to fully sale market. address the problems identified for liquidity in the wholesale market, behavioural remedies were ac- Commitments for access to sites for new cepted in addition to the plant divestitures. nuclear build The remedies, as described below, form an integral In order to address the serious doubts established and conditional part of the decision. by the Commission regarding access to nuclear sites most likely to be used for a first wave of new nu- Withholding clear build, EdF offered to dispose of land owned by British Energy either at Dungeness or at Hey- In order to address the withholding concerns identi- sham to an independent operator on terms of sale fied by the Commission, the parties proposed to di- approved by the Commission. The purchaser must vest one coal-fired plant from British Energy (Egg- elect which land to acquire within a specific period borough) and one gas-fired plant from EdF (Sutton Bridge). (21) Some market respondents indicated that the proposed The Commission concluded that the merger, con- auction mechanism, and in particular the proposed liquid- sidered together with this remedy package, does not ity test and the reserve price for the auction, could distort trading incentives and limit the effectiveness of the rem- bring any significant additional scope for withhold- edy. ing. This is for several reasons. First, the transac- (22) The traded amounts will be assigned to a separate trading tion would then lead to a relatively limited incre- book under the supervision of a trustee.

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of time from the date of the conclusion of the sale Commitment to terminate one grid MERGER CONTROL and purchase agreement. This commitment for the connection agreement at Hinkley Point unconditional release of land at either Heysham or Dungeness did not affect the obligations of EdF to EdF also offered a commitment to terminate one of sell certain sites, subject to conditions, following the the three connection agreements between National Sites Undertaking and the SMA agreed with the UK Grid on the one hand and EdF or British Energy Government. (23) on the other hand at Hinkley Point. The Commis- sion considered that this commitment removed any The Commission considered that Heysham and overlaps identified regarding connection agreements Dungeness can be regarded as viable options for new in the hands of the merged entity. nuclear build. It took the view that the envisaged ability of the successful purchaser to elect which land to acquire within a set period of time as part of V. Conclusion this commitment brought a significant advantage as Despite the relatively limited market shares of the this can allow the successful bidder to undertake the merging parties, the Commission concluded on the necessary verifications before deciding which site to basis of a comprehensive economic analysis that the acquire. This ability can be considered as being high- transaction was likely to lead to anticompetitive ef- ly advantageous given the lack of absolute certainty fects on the wholesale electricity market. The Com- for developing any site potentially suitable for new mission’s first-phase investigation also established nuclear build. The Commission also found that the serious concerns with respect to the ability and in- commitment offered by EdF for an unconditional centive for the merged entity to internalise trades, divestiture of land at either Heysham or Dungeness with consequent implications for a reduction in ensures that at least one of the merged entity’s sites liquidity on the wholesale market. In addition, the will be divested unconditionally. Commission had doubts in relation to the market Taking into account the land release obligations for sites for new nuclear build. which EdF is to abide by in view of the SMA and This was a complicated case, which could have gone the Sites Undertaking with the UK Government, the to a second-phase review were it not for the fact Commission concluded that the commitment of- that the parties were prepared to submit adequate fered by EdF regarding sites for a first wave of new remedies for each of these issues. It illustrates that nuclear build constituted a clear-cut remedy that di- while the combination of complementary opposites rectly and fully addressed the serious doubts identi- may be strategically good from a business perspec- fied by the Commission with regard to the market tive, it may, in specific circumstances, also raise is- for nuclear new build sites. sues from a regulatory point of view.

(23) Under the Sites Undertaking and the SMA, following the satisfaction of the relevant conditions, EdF’s land at Wyl- fa, British Energy’s land at Bradwell and any land acquired by the merged entity at the Bradwell NDA auction can also be made available to competitors.

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