Shake-up at British Energy ousts nuclear chief

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British Energy parted company with its top nuclear executive yesterday as the company - which generates 20 per cent of Britain's electricity - admitted that cracks in boilers at two of its plants meant production would fall well short of forecasts.

The company will also spend £17m on cutting 100 senior jobs over the next 18 months. The chief nuclear officer, Roy Anderson, is set to receive a pay-off of close to £1m. Last year he earned a basic salary of £407,000 with a bonus of £405,000. Other benefits brought his total package to £1.26m.

Mr Anderson, a 56-year-old American, was brought in by the previous chief executive Mike Alexander, who was ousted when the company was being reconstructed following its emergence from bankruptcy.

He will not be replaced, with the three nuclear chiefs beneath him in future reporting to chief executive Bill Coley, who will take direct control of nuclear operations as part of an organisational shake-up.

Mr Coley said of the departure: "We didn't push Roy out. But Roy is a turnaround man, when he joined us in 2004 he joined to start change and turn around in the company.

"He brought in some excellent people and they will now report to me."

Analysts expressed concern at the sweeping management overhaul at a time when the company is grappling with difficulties at its ageing suite of nuclear plants.

Pre-tax profits for the six months to 1 October came in at £329m against £81m last time, due to high energy prices. Underlying profits more than doubled to £481m. The shares finished up 8.5p at 477p yesterday.

But production was disappointing and will be at least 8 per cent below forecasts over the next six months. Six of the sixteen reactors are currently shut to repair parts of the plants, some of which are now more than 30 years old.

The problems at plants may now force the Government to delay part of the sale of its stake in the company. In its results statement, the company said the Government would have to consider the state of the plants before taking any action.

Mr Coley made great play of the reliability of the company's pressurised water reactor at Sizewell B. However, at one point last month none of the other seven plants were operating.

Hunterston B in Scotland and Hinkley Point B in Somerset have been crippled by boiler cracks and are expected to operate at 70 per cent capacity over the next six months.

A review will be carried out to see whether the cost of dealing with the cracking, which would result from operating at 100 per cent, would be more cost effective than operating at 70 per cent.

Mr Coley said he did not "blame anyone" for the problems at the company's plants, saying they had suffered from "previous under-investment".

He added: "Britain needs nuclear energy if it wants to cut its emissions. We are ready for the challenge."