HomeCoal FiredBritish Energy shares tumble after Torness shutdown

British Energy shares tumble after Torness shutdown

14 August 2002 – UK nuclear power producer British Energy plc saw its share price lose a third of its value yesterday after it said that it was cutting forecasts for power production due to unplanned outages.

The company said in a statement it expected generation from its nuclear plants for the year 2002/03 to be about 63 TWh, compared to the 67.5 TWh originally expected. The loss of production would be partly off set by business interruption insurance cover.

British Energy was forced to shut down production at its operating unit at its Torness power plant in Scotland yesterday after vibration was discovered in the nuclear plant’s gas circulation units. A similar problem had forced the closure of the other unit in May.

The company said it was investigating its Heysham 2 reactor, which had similar gas circulation units, though it said they were operating safely.

Share in British Energy fell to 63p after announcing the five per cent fall in production. Its UK operation has been supported by profits from North American assets in the last year

Meanwhile, the European Commission is reportedly looking into allegations by British Energy that it is unfairly discriminated against in terms of the rates it pays to local authorities.

Non-Magnox nuclear generators in the UK pay an extra 47 per cent in rates compared to coal and gas generators. British Energy’s nuclear facilities currently pay some à‚£14 000/MW in rates, compared to à‚£9500 paid by coal stations and CCGTs.

The company could have a case when it is considered that the state owned BNFL only pays à‚£6,000/MW at its nuclear facilities.

British Energy is currently looking at ways that it can improve the profitability of its UK business, which has been suffering since the collapse of the wholesale price. One area British Energy is perusing is gaining exemption for its nuclear output from the Climate Change Levy, something already achieved by power generated from renewable sources and much CHP.