By Claire West

The announcement earlier this week that Gaz de France (GdF) is to effectively purchase International Power will see more of the UK’s energy infrastructure in foreign hands, however this could be good news for the consumer.

That’s according to M&C Energy Group, the UK’s largest energy consultancy.

David Hunter, Energy Analyst from M&C Energy Group, explains:

“While the sale of International Power represents further consolidation of power station ownership in the UK, the good news is that it has not fallen into the hands of one of the ‘big 6’ suppliers that currently have a stranglehold of the UK energy market.

“This recent GDF acquisition may well strengthen the combined company’s ability to compete in the UK market. Currently they are marginal players in the business market and not involved in domestic. It would seem they have their sights on the UK’s lucrative big business and consumer marketplace and if so this could increase competition.”

M&C Energy Group, which warned that energy pricing for homes could well increase in the coming months, believes that more competition is needed if consumers are to see price reductions.

Mr Hunter added: ”Despite some of the energy providers announcing record financial results, supplier margins have fallen from recent high levels and therefore price increases could well be on the way.

“This will be exacerbated by reports that France could see a power shortfall by as soon as 2013 putting greater pressure on the UK’s dwindling supply.”

M&C Energy Group has renewed calls for the government to stop talking and take action.

Mr Hunter added: ”The new government are re-consulting on the UK’s energy policy with an announcement on the way forward not due until the autumn and ratification of our nuclear policy not expected until April 2011.

“With nuclear new build, reshaping the markets to deliver investment, a robust planning system and cleaning up fossil fuel power to be considered, the real issue is that £200 billion of investment needs to be found in the next decade to secure Britain’s energy future. The state of the public finances means that the funding will have to come largely from the private sector and for this to be attractive the government needs to provide the right incentives without further eroding our once envied energy marketplace.”