1. Possible shake out scenarios for the UK electricity supply industry Prepared by Utility Consultants www.utilityconsultants.co.nz © Utility Consultants Ltd 2002

2. Disclaimer

3. This report contains material that is speculative and which may or may not occur in practice Proceeding beyond this page is your acceptance of the following statement Utility Consultants, its directors and shareholders shall not be liable for any loss or damage arising from action or inaction based on this report

4. Introduction

5. This report considers two possible shake-out scenarios based on ScottishPower and S&SE being the only two independent companies left in the industry The report considers market share analyses for each of three scenarios

6. The scenarios

7. The three scenarios are as follows… Scenario 1 ScottishPower and S&SE amalgamate to form Company Q Scenario 2(a) Eon acquires ScottishPower and integrates with Powergen Scenario 2(b) RWE acquires S&SE and integrates with Innogy in retaliation to 2(a)

8. Present industry structure

11. Scenario 1

14. Scenario 2(a)

17. Scenario 2(b)

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