British Energy powerless to stop profit slump

BE lost a quarter of its capacity last year - and judging by yesterday's blackouts, its problems continue...

Last Updated: 31 Aug 2010

British Energy, our biggest nuclear power producer, said today that its profits dropped by 28% last year to £882m. And there are no prizes for guessing why: the various shut-downs and maintenance jobs at its power plants meant that its energy production was almost a quarter less than expected. It’s a timely reminder – as if we needed it – of just how dodgy our power infrastructure really is in the UK.

Just to really hammer the point home, yesterday no fewer than seven big power stations all shut down in the space of a few hours, leaving thousands of homes and businesses without electricity. The power cuts (which affected Lincolnshire, Buckinghamshire, Cheshire, Cleveland and London, amongst others) were the worst in a decade, according to some observers – operations were cancelled, trains were delayed and half a million people were left in the dark.

And guess where it all started? Sizewell B, British Energy’s flagship nuclear power station, which shut down unexpectedly at midday. So it was an unfortunate time for BE’s chief exec Bill Coley to be protesting that Sizewell was operating at ‘world-class standards’, as he did today. Admittedly Sizewell hasn’t shut down like this for more than three years (BE’s recent problems have come at the Hartlepool and Heysham 1 plants) but it doesn’t exactly bode well if this is supposed to be BE’s best-performing plant...

Coley insisted today that the plant will be up and running again quickly, suggesting the problem was just an instrument failure rather than anything more serious. Then again, he would say that – BE is currently up for sale (EDF, Iberdrola and RWE have all been linked with potential bids), so he won’t want to risk pushing the price down.

However in general terms, nobody seems to know what caused all these power stations to fall over in such a short space of time. The energy producers are refusing to divulge details, claiming that it might distort the wholesale price of electricity – and given that the price shot up by a third to record levels even without an announcement, we dread to think what might have happened if they’d come clean.

As British Energy knows as well as anyone, the simple fact is that much of our energy infrastructure is old, creaky and unreliable. That’s precisely why we need to get building more power stations – and why this BE sale needs to be completed as quickly as possible. Otherwise we might end up with a lot more than an escalating wholesale cost to worry about...

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