£1.6bn shocker for Powergen parent

POWERGEN, the country's largest electricity supplier, has dealt its parent a £1.6bn blow thanks to falling wholesale prices in the UK. German utility E.ON has written off e2.4bn on its UK subsidiary, about 16% of what it paid for the business earlier this year. Further charges might be needed should markets fail to pick up, which could prevent E.On hitting its full-year profit targets.

Powergen warned last month that the British power market was 'bust'. Prices have fallen around 40% under Government reforms and all British generators are making big losses. Several power plants have been closed.