British Energy hit by nuclear shutdowns
The sorry state of British Energy?s operations were under-scored on Friday when the company reported a bigger than expected £234m pre-tax loss for the six months to the end of September.
The figure was almost four times the £60m loss incurred during the corresponding period last year. The nuclear generator, which produces about 20 per cent of the country?s electricity, is subject of a £5bn government backed rescue due to be completed early next year. Mike Alexander, chief executive, blamed the losses on a combination of volatile electricity wholesale prices and reduced electricity output due to the need to replace ageing cast iron pipework at its nuclear power stations at Hartlepool in Teeside and Heysham in Lancashire.
The group, which has ruled out restoring its dividend until at least 2007, said ?the outlook for the company?s financial and trading prospects for the remainder of the financial year will be challenging?.
The unplanned closure of the two power stations for repairs forced the group to buy higher priced power in the market to meet commitments to customers, adding to its losses.
Nuclear electricity output fell by 14 per cent compared with the corresponding period last year. The group as a result has reduced its forecast for output for the full year to 59.5 terrawatt hours (TWh) from its original target of 64.5 terrawatt hours. This compares with best ever annual output of 67TWh in 2002.
British Energy has contracted a group of leading US nuclear engineers to try to improve the reliability of its nuclear power stations all but one of which, Sizewell B in Suffolk, are due to close by 2023. The generator, if performance can be improved, would like to extend the life of its power station by at least five years.