British Energy warned yesterday that it could not build a new generation of nuclear power stations unless it was allowed to offload £3bn of its current nuclear liabilities onto the taxpayer.
The nuclear electricity generator also called on the Government to impose a new "carbon-free" obligation on electricity suppliers, requiring them to take 25 per cent of their requirements from nuclear stations.
It estimated that this would make nuclear-generated power around 50 per cent more expensive than current wholesale prices – a cost increase that ultimately must be borne by the consumer, as the price for security and diversity of supply.
In its submission to Downing Street's energy policy review, the company said the Government needed to give the green light now to a £10bn programme to construct 10 new nuclear stations or face the prospect of having to rely on foreign gas for more than half of Britain's electricity needs by 2025.
British Energy is proposing that £2bn worth of liabilities on its balance sheet, which pre-date its privatisation in 1996, should be transferred to the Government's proposed UK Liabilities Management Agency.
It also wants to renegotiate its fuel reprocessing contracts with the state-owned British Nuclear Fuels so that British Energy's annual bill comes down from £300m a year to £50m. This would make the group's UK nuclear stations profitable once again. "Restoring UK profitability will be a prerequisite to British Energy playing a major role in any future new build programme," the submission added.
Robin Jeffrey, British Energy's executive chairman, said that to make a new generation of nuclear stations financially viable would mean bridging the "economic gap" between current wholesale prices of £18-£20 a megawatt hour and the £25-£30 that the new generation of nuclear reactors would have to charge.
Constructing 10 new 1,000-1,200 megawatt stations would increase the UK's stockpile of nuclear waste by 10 per cent, which could be addressed either through surface storage or burial in deep underground repositories, he said.
British Energy also said the new generation of reactors would help the country meet its Kyoto targets. If no new nuclear stations were built it would result in an increase in greenhouse gas emissions equivalent to half the total emissions currently produced by motor vehicles.
Greenpeace urged the Government to resist the nuclear industry's lobbying and opt for a "50:50" strategy – a 50 per cent reduction in energy usage and 50 per cent of Britain's energy needs met from renewable sources.Reuse content