8 May, 2002 – British Energy plc has confirmed that it is in discussions with British Nuclear Fuels Ltd (BNFL) about the possibility of taking over the running of some of its six Magnox nuclear power stations.
British Energy said “ongoing discussions” are taking place on a “wide range of issues” including fuel service arrangements, new nuclear build, and the possible operation of Magnox plant and transportation.
Press reports yesterday had suggested that the two companies were close to signing a deal in which British energy would take on responsibility for four of BNFL’s six Magnox power stations. According to reports, the plants are thought to be Oldbury, Wylfa, Dungeness and Sizewell.
The deal would allow British Energy to run the plants until they are decommissioned at about the end of this decade and to sell the power without taking on any of the financial risk.
With both companies struggling to cope with depressed electricity prices, driven down by the competitive structure introduced by New Electricity Trading Arrangements, speculation had arisen that British Energy had agreed to keep sending fuel to BNFL for reprocessing in return for getting an attractive fee for the management of the Magnox reactors to the end of their working life up to 2010.
The Magnox reactors are the oldest ones in the UK and were left with BNFL when the rest of the UK nuclear industry was privatized with the floating off of British Energy, which owns ten modern Advanced Gas-cooled Reactors as well as the Sizewell B Pressurized Water Reactor.
A deal to run the Magnox reactors would give British Energy a greater share of the market and enable it to leverage its trading expertise to boost its financial performance.