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Thursday, May 29, 2008

Shutdowns and plunging profits cast doubt on nuclear future

British Energy, the nuclear power group, reported a sharp fall in profits yesterday - the same day a series of mishaps at its stations left more than 60% of its capacity out of action.

An unexpected shutdown at Hunterston on Scotland's west coast yesterday followed the closure of its Sizewell B station on Tuesday which left thousands of homes without power. The shutdown at the Ayrshire plant meant 10 of the company's 16 units were out of action.

The nuclear generator, which is to be sold off after the government announced plans for a new generation of nuclear stations, has been dogged by problems in the past year. It blamed other, ongoing problems at two power plants, Hartlepool and Heysham 1, for the fall in underlying profits from £1.22bn to £882m.

Bill Coley, chief executive, said the figures were disappointing but insisted the company was making progress on technical problems. "We have made good operational progress ... We are well positioned to manage our existing fleet to best advantage and look ahead to playing a pivotal role in the new build programme." Sizewell B was expected to be back in production in a few days, he said.

The problems come as a report today into the failings of the UK nuclear industry casts doubt on British Energy's prospects and is likely to alarm foreign power firms preparing to launch multibillion-pound bids for it. The study, published by Friends of the Earth and written by former Guardian journalist Paul Brown, claims the company could be forced to shut down some plants because the reprocessing facility at Sellafield is running out of storage space.

Although Coley said the company was not experiencing any problems with waste storage, the report claims the financial legacy of Sellafield and failures of British Energy make it too dangerous for the government to embark on a new generation of nuclear plants.

Many of the companies considering a bid, such as EDF of France, want to use the UK company's sites for constructing a new generation of plants. They insist they do not need financial help to do so. But Brown concludes: "The economics of new nuclear power stations for the UK do not add up. It is not possible to achieve what the government says it will do - build a new generation of nuclear power stations in England without public subsidy."

Ministers had made many promises over the past 50 years that nuclear would pay its own way, Brown says, only to see huge new liabilities develop. The government had underwritten all the debts of British Energy when it collapsed in 2001 so the company can never go bankrupt, a commitment that dwarfs that made to the nationalised bank Northern Rock.

"Employing more than 10,000 people, the Sellafield nuclear complex is in crisis. Its reprocessing works and plutonium fuel plant are all failing at a massive cost - annually already £100 each for every taxpayer in this country - and this is rising," he says.

John Large, a nuclear industry consultant, believes British Energy might solve its storage problems but agrees it will be impossible to sell off the company without "massaging" the finances and handing financial liabilities to the public purse.

The doubts were underlined yesterday by an admission from the Nuclear Decommissioning Authority that the cost of cleaning up Britain's nuclear legacy would increase from the current estimate of £73bn. Director Jim Morse told the BBC: "I think it's a high probability that in the short term it will undoubtedly go up." The £73bn figure, published in January ,was an increase of £12bn on a 2003 estimate.

(Source: Guardian)


Rod Adams said...


I am sure that you realize that Friends of the Earth is an organization that has been working hard against nuclear power for at least three decades. One must take their dire predictions and cost analysis with many reservations and an understanding that there is mostly slant mixed in with some truth.

Both BE and the NDA have some real challenges ahead caused by decisions made long ago by people who were working under a different set of rules than the ones that have been imposed since. There have been many attempts to tie the ropes on the atomic Gulliver by the Lilliputians that control the established energy industry that prefers to sell coal, oil and natural gas.

I have met Bill Coley and spoken with him at some length about the operational state of the plants that his company operates. I think he has a wonderful understand of what needs to be done and has a proven track record from his time at Duke Power that leads me to believe that he will succeed.

I also believe that there is another Brown (Gordon) with an opinion that is a bit more valuable that the FOE activist that you quoted. Here is a quote from a recent article in timesonline:

But Mr Brown said after addressing yesterday’s board meeting of the industry body UK Oil and Gas in Banchory, Aberdeenshire: “We want to do more to diversify our supply of energy and that’s why I think we are pretty clear that we will have to do more than simply replace existing nuclear capability. We will be more ambitious for our plans for nuclear in the future.”

I wish I could have been there to see the reaction on the faces of the assembled representatives of the oil and gas industry. It would have been interesting to see how they reacted to announced competition from nuclear power to their power and wealth.

Anonymous said...

A nice thing about the world today is there is many advanced industrial nations, trying different things with different sets of regulations.

So if something is viable, it will work somewhere. South Korea is building and completing new nuclear generation for about 2400$ a kilowatt of capacity. Which is more then competitive.

Certain ideological or vest interest people are trying to stifle nuclear in some nations, with heavy regulations, mandatory shutdowns and so on.. Then weakly saying 'Ha! See its not cost effective.'

That might have worked back before the internet made it possible to see what was happening elsewhere.