British Energy (BE) announced plans to invite partners to build new nuclear reactors in the UK, as it announced increased earnings despite lower electricity output over the past nine months.
Bill Coley, chief executive, said that BE was interested in receiving proposals for new nuclear facilities, including possible joint ventures, during the presentation of Quarter 3 financial results. Potential new build partners will be asked to indicate the nature and scale of their interest and how they wish to work with BE in developing, building and operating new nuclear power plants, or their interest in the electrical output of any new project. BE would only pursue partnerships that would maximise value for shareholders.
The company stated that the land it owns next to its stations and a further site (Bradwell, adjacent to the decommissioning Magnox nuclear plant) may be well-suited to new nuclear generation due to the physical site characteristics, established relations with local communities and existing access to electrical grid connections and to cooling water.
The invitation came ahead of the publication of the UK government's Energy White Paper - which will include a 'statement of need' for nuclear - expected this spring.
Coley said that further work by would be required by industry, government and regulators to address long term arrangements for carbon emissions reductions and making arrangements for waste, decommissioning, planning and regulatory approvals. The UK government will address planning concerns with a separate White Paper, also to be published in the spring.
In addition, preparations for the pre-licensing of more than one reactor type are underway at the Health and Safety Executive.
Generation down, profits up
BE announced increased earnings, with EBITDA (earnings before interest, tax,depreciation and amortization) up to £775 million ($1.5 billion) from£462 million ($900 million) in the same nine-month period in 2005.
Total electricity output for the period was 44.0TWh (nuclear: 38.9 TWh; coal: 5.1 TWh), down from 48.7 TWh for the comparable period in 2005 (nuclear: 43.9 TWh; coal 4.8 TWh).
Nuclear output was lower primarily due to losses incurred in connection with boiler issues at Hinkley Point B and Hunterston B and repairs to cast iron pipework at Hartlepool.
The two Hinkley Point B units will return to service in March, with the Hunterston B units returning to service in April. All four units would return to service with a 70% load factor, which will reduce operating temperatures to reduce the risk of boiler tube cracking. BE intends to increase load factors later after further studies.
Earnings were higher, despite this drop in output, because the realised price for the period was £40.8 ($79.3) per MWh, compared with a realised price of £29.0 ($56.4) per MWh for the comparable period ln 2005. Unit operating costs rose to £26.8 ($52.1) per MWh from £22.6 ($49.3) per MWh.
Nuclear fuel costs for the period were £5.6 ($10.9) per MWh of nuclear output, coal fuel costs for BE's Eggborough plant were £22.2 ($43.9) per MWh.
Health and Safety Executive