British Energy extends life of two nuclear reactors

British Energy has decided to extend the life of two of its nuclear reactors for a further five years in a move that will aid government targets on CO2 emissions and ease the impending energy squeeze.

The chief executive, Bill Coley, said that after an extensive technical and economic evaluation the Hinkley Point B and Hunterston B reactors would operate through 2016, as opposed to previous plans that would have seem them close in 2011.

To do so, British Energy will need to invest an additional 90m beyond the currently planned investment programmes, to get the reactors to operate at 70 per cent capacity. This is the level at which they are economically viable, producing electricity at a cost of 27 per megawatt hour. The ageing reactors are currently running at 60 per cent capacity, hobbled by cracks on the boiler units.

The new lease of life, which will push the company's capital expenditure for the year to as much as 300m, means that the reactors will have been in operation for 35 years. The move will also keep 37 million tonnes of CO2 out of the atmosphere that would have been emitted by non-nuclear electricity generation necessary to make up for the lost power.

Referring to the closure of a pair of reactors that were shut down last year by BNFL, and additional sites set for decommissioning by 2010, Mr Coley said that extending the lives of the reactors was necessary. "Frankly there is not enough capacity in the UK. Reactors are being retired and demand is increasing with the growth of the economy," he said.

The producer of about a fifth of the UK's energy is on track to give a full update to investors on the state of the four reactors that it shut down recently at Heysham and Hartlepool, after corroded wires on the boilers were found, Mr Coley added.

The closure sent the company's shares into a nosedive and raised fresh doubts about the wisdom of the Government's expected approval of a new generation of nuclear power stations.

Last month the Prime Minister postponed the Government's decision on the building of new reactors until January. A package of bills unveiled in the recent Queen's Speech that set tough new carbon emissions targets and provided funding for nuclear decommissioning was widely interpreted as a green light for the next generation of new nuclear power stations.

The extension for the two reactors also came a day after the Business and Enterprise Secretary, John Hutton, unveiled the Government's ambitious plan to line the coast with enough wind turbines to power every UK home by 2020. The 33gw wind power targets were dismissed however as unattainable by energy industry groups.

Mr Coley declined to criticise the plan, but highlighted the inherent limitations of wind. "We've consistently said wind has a role to play. How much of a role to play I don't know," he said. "It is no easier to permit a windmill than it is to permit gas storage. It is very difficult. The characteristics of nuclear energy are that it generates huge volumes of electricity 24 hours a day, seven days a week, regardless of whether the wind blows or not."