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)