British Energy shares slide on output concerns

Shares in British Energy dived 8 per cent yesterday as problems at two of its nuclear power stations threatened to slash output a year after boiler cracks forced two of its other plants to close all winter.

British Energy shares led the FTSE 100 index down after the UK's biggest power generator said it had shut two more reactors after finding an "issue related to a wire winding" in the boiler closure unit at its Hartlepool-1 plant.

The weekend closures left almost half of British Energy's nuclear reactors offline yesterday morning and revived memories of its Hinkley Point and Hunterston nuclear power stations being closed throughout last winter.

The problem at Hartlepool-1 prompted the company to close the other reactor at the plant in north-east England and a similar reactor at Heysham in north-west England over the weekend to check their boiler closure units.

British Energy said the boiler closure unit design was unique to Hartlepool and Heysham, so any problems with them should not mean closing any of its other plants.

But the company also shut its Torness-1 reactor over the weekend because of an electrical fault, two days after stopping the other reactor at the plant in eastern Scotland because of a similar problem in the conventional part of the unit.

A spokeswoman for the generator said the Torness electrical faults would not keep the plant closed for long and that preparations for restart of the 625-megawatt units were being made.

But she said the timing of the restarts of Hartlepool and Heysham was unknown.

"We believe that this is an emergent issue, and so too early to say how serious it could be," Cazenove analysts said in a note.

"We would expect British Energy's share price to be off materially today, especially given how strongly it has performed over the last month," they added.

Power prices rose on the news of the latest outages as the closure of seven of British Energy's 16 reactors contributed to supply tightness and revived fears that a big chunk of nuclear power generation capacity may be unavailable this winter.