BE crisis could spark a winter of discontent
 
Oct 26, 2006 - Daily Mail; London
Author(s): Sam Fleming

BRITISH industry could face enforced cuts in energy use for the first time since the early 1970s because of the crisis at the country's biggest nuclear generator.

 

Power cuts at struggling British Energy may mean one in four industrial customers could suffer interruptions if Britain shivers during an unusually cold snap, according to energy consultancy Wood Mackenzie.

 

The warning comes after BE shocked the markets earlier this month by revealing it is shutting down generating capacity to deal with faults.

 

It is closing four creaking reactors at Hunterston B and Hinkley Point after discovering cracks. There are also problems with the piping at its Hartlepool station and the Dungeness B refuelling system.

 

BE's Sizewell B in Suffolk has also been closed for maintenance, but reopened at the weekend WoodMac calculates that up to six gigawatts of British Energy's 9.6GW of nuclear capacity could be out of action in the coming months.

 

That could mean supplies of power and gas to industrial customers will have to be rationed to ensure households do not suffer blackouts.

 

The last time Britain saw mandatory cuts was during the miners' disputes of the early 1970s. BE provides the bulk of Britain's nuclear-generated energy, which accounts for 20pc of the country's total supply.

 

Even under WoodMac's most optimistic scenario, which assumes only 3GW of BE's capacity will be unavailable, power and gas prices are likely to be pushed higher. The news is a major setback to hopes that Britain will avoid a repeat of last winter's energy price spikes.

 

Gas prices have fallen recently on optimism that new pipelines from Norway and Belgium will provide ample supplies.

 

The report deals another hammer blow to the reputation of the nuclear industry and to Chancellor Gordon Brown's hopes of selling off the Government's 65pc stake in BE (flat at 422p).

 

Regulator Ofgem reckons additional gas-fired generation may have to be run to compensate for the reduced output.

 

A spokesman for the watchdog said: 'Even though there have been more positive developments on the gas market, Ofgem is still warning the industry against complacency for this winter.' British Energy did not comment.

 

 


© Copyright 2006 NetContent, Inc. Duplication and distribution restricted.

Visit http://www.powermarketers.com/index.shtml for excellent coverage on your energy news front.