British Energy says that delays in re-opening Heysham 1 and Sizewell B power stations have dealt another blow to the company’s finances. The delays mean that BE will have to buy 1.4TWh of electricity to replace lost generation, compared to the previous forecast of 0.8TWh. The cost of this step is now estimated at £40-50 million, rather than £25-30 million.
BE said that the extra cost would “have an adverse impact on the group’s cash position”, but that it would not derail financial restructuring plans. However Trade and Industry secretary Patricia Hewitt said the company could still be placed in administration if lenders fail to support a debt for equity swap, or if the European Union blocks the rescue because of unfair state aid. The UK government has increased its loan facility to British Energy from £200 million to £300 million.
Heysham 1 had been closed after the failure of one of its seawater cooling pipes. A separate investigation into a cooling system at Sizewell, triggered during routine maintenance, has not found any problems.
BE said that it would consider prolonging the lives of its eight UK nuclear plants if it can improve their operational performance. Currently, British Energy’s UK plants are operating at an average load factor of 77%. A closure programme is due to start in 2008.
