Double blow rains down on nuclear energy

Britain's beleaguered nuclear industry is to be delivered a double blow as British Energy declares a £3bn loss and the Norwegian government takes action over the dumping of nuclear waste in the sea off Sellafield.

On Tuesday British Energy, which the Government saved from collapse earlier this year, will reveal its full-year figures. They include an operating loss of around £500m and a writedown of over £2.5bn on the value of its eight nuclear, and one coal-fired, power stations.

Only a year ago, British Energy valued the power stations at £4.4bn. But even then they were losing money because of the collapse in energy prices, and the company is writing down the value to what it considers a more reasonable level.

The group still has liabilities of £1.3bn and an industry source said: "British Energy is only one hiccup away from going into administration."

The British Energy figures are likely to be overshadowed by a row between Norway and Britain over discharges of a nuclear by-product, Technetium-99, into the sea.

BNFL has 240 tera-bequerels (TBq, or 2,000 cubic metres) of Tc-99 in ageing tanks at Sellafield. The Nuclear Industries Inspectorate has said they must be emptied by July 2007. BNFL proposes to discharge the Tc-99 into the sea in about four lots, starting with a 70Tbq discharge this September. The Norwegian government has objected, saying the Tc-99 will be carried towards the Norwegian coast, harming the country's fishing industry.

Last month Børge Brende, the Norwegian environment minister, met his UK counterpart Michael Meacher to propose a moratorium on the discharges while another way is found to dispose of the Tc-99. However, despite a two- hour meeting in Whitehall, this proposal was rejected. Mr Brende told The Independent on Sunday he was disappointed with the UK position and went on to issue a warning to Mr Meacher.

"We said we had to do something unusual, something we do not like to do, as Britain is our friend, and pass a diplomatic note to Britain," Mr Brende said. A diplomatic note is the equivalent of a "yellow card" shown by one government to another.

This is not all. Norway is now studying the potential impact on its fishing industry and may try either to stop the discharges or win compensation from the UK Government and BNFL. "We can't exclude the possibility of taking legal action," said Mr Brende.

The UK Government and BNFL are already being sued over discharges from Sella-field by the Irish government. A ruling is believed to be imminent and may even emerge during the Ospar conference of environment ministers in Bremen later this month. Officials at the Department for Environment, Food and Rural Affairs (Defra) admit the Norwegian row could dominate the Ospar meeting, but Mr Meacher is holding firm.

"Over the last 10 years we have dramatically cut emissions from Sellafield," said a spokesman. "The emissions that reach Norwegian fisheries are unlikely to pose a health risk. If there was a scientifically responsible alternative we would embrace it."

BNFL has investigated an alternative form of storage that would take Tc-99 out of the water and mix it with a compound called TPP. However, Defra is unwilling to allow the BNFL to test this as it believes the product would be more dangerous than liquid Tc-99.