More bad news for British Energy (BE), the UK's biggest nuclear electricity generator (when their creaking fleet of reactors actually happen to produce any power, that is). They've discovered that faults unearthed at two of their reactors pose more of a "complex issue" than previously thought and so the reactors are going to be offline for the foreseeable future. This news sent BE's shares tumbling by 10 per cent. Or as The Independent put it shares "went into meltdown".
A few weeks back BE announced that during a routine inspection "an issue related to a wire winding" was found in the boiler of the reactor unit at Hartlepool nuclear power station. This was rather unexpected and BE, as a Daniel come to judgement, took what it described as "a conservative decision" and shut the reactor at Hartlepool, as well as its sister unit at Heysham 1. Just as a precaution. Things were expected to be ship shape and bristol fashion very soon, so don't panic Mr Mainwaring. Indeed.
Until now, that is. This complex issue they stumbled upon was that a "wire had failed as a result of corrosion" in the casing of the reactors. On the face of it this might not sound too problematic, but the BE boffins have been scratching their heads for a while trying to work out how to fix it, and have decided it's going to take a very long time to do so. Industry analysts suspect this might mean the reactors are out of order for the rest of the financial year. According to The Times, "the problem was not an isolated one and would require further inspections, remedial work and many more months of closures to fix."
And these aren't the first problems of this nature BE have had. In fact, they have been described as "a grim echo" of the discovery in 2006 of cracks in the boilers at Hinkley Point B and Hunterston B reactors which caused them to be taken offline. Today these two are only operating at 60 per cent capacity. Despite all these problems, BE continues to talk up what a big role it plans to play in building new reactors in the UK. It has been giving the glad eye to any potential investor it chances upon, but as The Times rather dryly notes, these "repeated operational problems... have caused some to question whether it should be allowed to be involved in building new reactors". You don't say.
But perhaps the most galling thing about BE, though, is the fact that the taxpayer has been left to shoulder a multi-billion pound bill to cover the clean up of BE's nuclear liabilities. After the company ran in to major financial difficulties in 2002 the government effectively handed over £5bn from the public purse to cover the expected costs of clean up and decommissioning of its reactors. However, as noted by the Parliamentary Public Accounts Committee in July this year, this means the "public had been left to underwrite a 'large and uncertain liability', estimated at £5.3bn." It went on to say that because "the company had little incentive to reduce its liabilities... British Energy now poses a significant risk to the taxpayer."
So we're in a position where a practically penniless company like BE, that cannot afford to pay to clean up its own mess and whose hoary reactors are falling apart at the seams, is angling for a large slice of the new nuclear pie that Gordon Brown seems so keen on dishing out. You couldn't make it up. All this whilst the UK has the biggest potential for renewable energy in Europe. Put simply, the government's fixation with nuclear power is proving to be one of the biggest stumbling blocks to tackling climate change and setting us on the path to a clean energy future. And companies like BE, who would frankly struggle to run a bath, are set to make a killing.
The mind boggles.
