British Energy stations may live on

BRITISH Energy, the troubled East Kilbride-based nuclear generator, yesterday said it was looking into the possibility of extending the life of its eight UK power plants.

The company, which operates nuclear plants at Hunterston, in Ayrshire, and Torness, in East Lothian, said prolonging the life of its plants was an "option for the company in the future" and was dependent on the success of government-backed (pounds) 5bn rescue.

John McNamara, a spokesman for British Energy, said the company needed to "hit a number of milestones," before such a move became possible.

"We still have to seek an agreement with our creditors at a meeting on September 30, and there is still an on-going EU investigation into the issue of state subsidies," he said.

"As long as we keep hitting our milestones, the company should complete the restructuring process by September next year. At that point, post-restructuring, we would seriously look at the option of extending the life of the plants."

Under current plans, British Energy's closure programme will start in 2008, with all but one due to close by 2023. The plants currently generate about 20% of the UK's electricity.

Mike Alexander, chief executive, in an interview with the Financial Times, yesterday said: "If we achieve all the things we want to, and can make the safety case, we will be able to put forward a case to extend the lives of the plants."

British Energy was kept afloat last year by a (pounds) 650m government loan, which it has since repaid.

However, in June, the company announced losses of (pounds) 4.3bn after slashing the value of its power plants and warned it could yet fall into insolvency.

Meanwhile, the European Commission is investigating whether or not five UK local authorities, including North Ayrshire and East Lothian councils, were acting illegally when they allowed British Energy to put off paying business rates from November 2002 until February this year.

Between them, the five councils agreed to temporary relief on (pounds) 4.3m of rates which British Energy could not pay.

The Herald