Power failure for BE as profits fall by half

Published on Wednesday 13 August 2008 10:49

BRITISH Energy has seen profits nearly halved in the last three months after output from some of its power stations slowed.

The company, which owns Torness Power Station in East Lothian and Hunterston in Ayrshire, said adjusted earnings dropped to 129 million in the three months to March 31, compared to 253m in the same period last year.

It warned that the return to service of its power stations at Hartlepool and Heysham 1 is to cost much more than originally forecast. And it said talks are continuing in connection with a takeover of the group, after it rebuffed two bids by French giant EDF for being too low.

Bill Coley, the company's chief executive, said: "We have continued to make good progress towards resolving the plant issues that have significantly impacted our performance in the year to date.

"Two of the four units at Hinkley Point B and Hunterston B have already achieved operation at 70 per cent load as planned, and we expect to raise load on the remaining two units to this level in due course.

"In addition, we remain on track to deliver the return to service of Hartlepool and Heysham 1 in the third quarter of this financial year."

BE said that costs for getting Hartlepool and Heysham 1 back online will be around 115m, compared with previous hopes of 50m.

More than 1.2 million man hours have been spent on work at the two stations, which have been out of action since last autumn after wire corrosion issues were identified within boiler units.

The loss of power from the two stations meant BE's nuclear output fell to 9.5 terawatt hours (TWh) in the three months to June 29, compared with 13 TWh a year earlier.

The British government, which owns about 35 per cent of BE, gave the green light in January to a new estate of nuclear power stations to help cut carbon emissions and reduce reliance on energy imports.

"The role for nuclear new build as an integral part of UK energy policy is now firmly established," said Mr Coley.

As well as the two bids by EDF, British Gas owner Centrica is also said to be lining up a bid for BE.