Over the weekend, senior nuclear executives set out an enthusiastic sales pitch to a meeting of industrialists, civil servants, and City financial analysts. Privatisation has suddenly leapt to the top of the nuclear industry's agenda.
Nuclear Electric, which owns and operates all the nuclear power stations in England and Wales, believes it will get the finance to build a new generation of nuclear stations only from the private sector and that, to attract private investment, it must be privatised.
Market analysts believe that, provided the liabilities for decommissioning old reactors are sorted out, Nuclear Electric could be privatised as it stands and could be a lucrative investment. Because of the way the company was set up, it could be sold without requiring new legislation.
Nuclear Electric needs to build new stations to replace the output from the ageing first-generation Magnox reactors which are coming to the end of their economic lives. At the beginning of this month, the company applied for planning permission to build a twin-reactor station, Sizewell C, adjacent to the new pressurised water reactor nearing completion in Suffolk.
But Sizewell C, even if granted planning permission, could not go ahead because the Government has placed a moratorium on building new reactors. Its previous attempts to privatise nuclear power, along with the rest of the electricity supply industry, foundered in 1989 on the issue of the cost of demolishing old reactors and reprocessing their fuel. It promised to review the moratorium in 1994.
Since 1989, the Treasury has become more willing to underwrite historical liabilities in nationalised industries such as British Coal and British Rail in order to ease privatisation, opening the way for a rethink on how to deal with the nuclear industry's liabilities.
A separate development means it may be possible for the state to take over these liabilities through the agency of the UK Atomic Energy Authority (AEA).
The authority has already split itself into two divisions: one strongly commercial, which the Government is keen to privatise, and a second that will remain in the public sector responsible for the authority's own nuclear sites. Thus the privatisation of the AEA, which is being done for reasons unconnected with nuclear power generation, could open a route for handling historical liabilities from Magnox reactors, a route which would satisfy private investors interested in nuclear power.
Mark Baker, executive director of Nuclear Electric, said: 'We have given the Government the option of privatising us. Whether they take it up is up to them. We have made no secret of the fact that we hope they will.'
However, Scottish Nuclear, which owns the nuclear stations north of the border, appears more wary. James Hann, chairman of Scottish Nuclear, agreed that 'privatisation would be a better way to run the industry' but he believes there are major obstacles relating to waste disposal, decommissioning, and safety regulations to be sorted out first.