UK's Network Rail awards EDF Energy 10-year power supply deal

Fri Jan 11, 2013 4:56am EST

* EDF Energy to supply 3.2 TWh a year

* Network Rail is UK's biggest single electricity user

* Share of electric rail network to rise to 54 from 40 pct

By Henning Gloystein

LONDON, Jan 11 (Reuters) - British railway operator Network Rail has awarded EDF Energy a 10-year contract to provide the power needed to boost the electric railway network by the end of the decade, the companies said on Friday.

They said in a joint statement the agreement would see EDF Energy supply around 3.2 terawatt-hours (TWh) of electricity a year, powering a network which carries 3 million passengers and tens of thousands of tonnes of freight a day.

"Currently only 40 percent of the rail network is electrified. By 2020, 54 percent of the network will be electrified," the statement said.

"Our work to electrify hundreds of miles of railway represents the biggest programme of rail electrification in a generation and will provide faster, quieter and more reliable journeys for millions of passengers while cutting the cost of the railway," Network Rail's chief executive David Higgins said.

The statement did not give a monetary value of the contract, but at current wholesale spot market prices of around 50 pounds ($80.53) per megawatt-hour the 32 TWh to be delivered over 10 years would be worth about 1.6 billion pounds.

EDF Energy, a subsidiary of French government-controlled EDF, said the deal was a vote of confidence in its plans to build new nuclear power stations.

"Network Rail is the biggest single electricity customer in the UK so this long term deal is a massive vote of confidence in our nuclear-backed energy," EDF Energy's chief executive Vincent de Rivaz said.

EDF Energy is Britain's largest nuclear operator and plans to build four new nuclear power stations in the next decade to replace the company's ageing existing fleet in the country.