Problems will hit results warning

Nov 14 2007 by Peter McCusker, The Journal

BRITISH Energy yesterday warned the remainder of its financial year will be “significantly impacted” by problems at two of its nuclear stations.

While the UK’s biggest power provider posted an increase in half-year earnings, its outlook has been clouded by the closure of its sites at Hartlepool and Heysham 1 in Lancashire. The boiler closure unit problems follow outages and subsequent load restrictions at Hinkley Point B and Hunterston B.

British Energy said it would consider an additional dividend to shareholders at the time of its third quarter results, although it added this would be determined by the current operating difficulties.

Half-year underlying earnings rose to £511m from £481m a year earlier, helped by higher power prices.

Total output for the period 30.7 terawatt hours (TWh), down from 31.9 TWh a year earlier following the boiler issues at Hinkley Point and Hunterston in Ayrshire.

The two stations are currently operating at around 60% load.

British Energy chief executive Bill Coley said: “The first half of the year has shown many operating metrics across the entire fleet at best ever recorded levels.

“That is a tribute to the operational focus of our employees and the investments made in improving the materiel condition of our plant. It is unfortunate that the output in the second half will be impacted by the boiler closure unit issue at Hartlepool and Heysham 1, which stems from the original design and construction of the stations. The team is in place to deal with this issue.”

Both Hartlepool and Heysham 1 are capable of supplying more than 1.5 million homes – enough electricity to keep three cities the size of Liverpool supplied during peak loading hours. Both started power generation in 1983 and have estimated decommissioning dates of 2014.

The company said its realised power price for the half-year was £38.4 per megawatt hour (MWh), up 8% on the comparable period. As of last week, fixed price contracts were in place for 60 TWh of output for the current financial year at an average contract price of £41 MWh.