Nuclear-power generator British Energy is reviewing its procurement strategy in the face of increasing competition in the UK, writes David Arminas.

“It’s a review of how we provide services, in particular for our core business,” said British Energy procurement manager Maurice Masters. As well as procurement, the generator is scrutinising human resources and financial services - all the major non-critical services outside generation. “We can be as radical as we like,” Masters added. The group is considering outsourcing supplies and moving away from arm’s-length contracts towards partnership-orientated arrangements. The review will be completed by the end of the year. BE could be preparing for a more competitive market, according to Don McGarrigle, chairman of the electricity group for the Major Energy Users Council, which represents 200 large energy users. By autumn 2000, the government will have completed its revised electricity trading arrangements to replace the electricity pool. “I think BE is setting itself up for market share,” McGarrigle said. “It is becoming increasingly competitive.” For years the company was considered to be a niche player because its nuclear plants needed large 24-hour consumers of power. “BE wants to expand now, and is quoting and getting plants with two-shift operations, with maybe a 50 per cent base-load factor,” he added. “The market is definitely tightening,” said Martin Williams, contracts manager at energy consultancy John Hall Associates. When the electricity pool is gone, BE must turn more often to securing individual contracts. “This is good news for customers with large base-load needs,” he said.