British Energy heralds new nuclear age

Generator in talks with rivals to build new reactors

British Energy, the nuclear generator, has held talks with Europe's largest power companies about building a new generation of nuclear reactors in the UK.

The company has had meetings with executives from the French group EDF and German group RWE, which owns npower in the UK, ahead of next month's publication of the Government's White Paper on energy. E.ON is also understood to be involved.

The White Paper will pave the way for a renaissance of nuclear power in this country. The Government is expected to make it financially viable for the UK's ageing reactors to be replaced, for example by guaranteeing a minimum electricity tariff for nuclear power.

Most experts believe British Energy, which operates eight nuclear reactors, owns the sites that are most suitable to host new ones. But EDF and RWE, and probably E.ON, have also sent inspection teams to visit older Magnox reactors, owned by the Nuclear Decommissioning Authority, to assess their suitability as sites for new reactors. Building on existing sites would make planning permission easier to obtain.

The chief executive of British Energy, Bill Coley, will face questions from analysts concerning the company's possible role in a reactor-building programme when it reports third-quarter results on Tuesday.

Negotiations with the German and French companies are at a preliminary stage. A consortium of several companies will probably be needed to lead the new-build programme. British Energy could offer the use of its sites on condition that it is involved in a consortium, but is thought to be reluctant to sell them outright.

The Government took a 65 per cent stake in British Energy in 2002 to prevent it going into administration. Electricity prices have since risen, helping the company to stage a recovery. But it continues to be dogged by technical problems.

Last autumn, two of its reactors, Hinkley Point B and Hunterston B, had to be shut down; British Energy now says they should restart the end of March. When all its reactors are operating as normal, the company produces around a fifth of the UK's electricity.