UPDATE - Brit Energy, BNFL look at replacing nuke reactors
Date: 28-Feb-02
Country: UK
Author: Matthew Jones
Announcing a joint working group to consider replacing British Energy's ageing stock of reactors with a new British Nuclear Fuels (BNFL) design, the two firms said public acceptance and government backing was needed if the nuclear industry was to prosper in the UK.
Earlier this month a government energy review pushed the responsibility of building new nuclear power stations firmly back into the private sector.
But British Energy's executive chairman Robin Jeffrey said a deregulated electricity market which has pushed down wholesale power prices makes such a move uneconomic.
"With current electricity (wholesale) prices at about 18-20 pounds per megawatt hour there is a gap with the 25-30 pounds per megawatt hour that replacement reactors would cost," he said.
Nuclear provides about a quarter of the country's electricity needs, but this figure is set to fall below five percent in 2020 as current reactors come to the end of their working lives.
State-owned BNFL's chief executive Norman Askew said moves to build new nuclear plants "must not get ahead of public opinion".
"We have to be realistic. There is a long way to go in policy terms and in pricing economics," he said.
Jeffrey said Tuesday's agreement with BNFL was similar to one signed last year with state-owned Atomic Energy of Canada Ltd (AECL), to assess using the latter's CANDU reactor design.
IMPROVED RELATIONS
The working group venture between British Energy and BNFL also signalled a thawing in relations between the two companies which have been soured by a dispute over reprocessing spent nuclear fuel.
Jeffrey said British Energy was now putting on hold a move to refer a reprocessing contract with BNFL, which British Energy claimed was unfair, to the Office of Fair Trading.
He also said it would probably take two to four years for his company to decide whether to opt for the Canadian design or for BNFL-owned Westinghouse's AP1000 model.
Speaking to Reuters at the sidelines of the briefing, he said he was looking the to bring down the estimated $1,000 per kilowatt cost of both the CANDU and the AP1000 designs which would put the price of replacing 9,000 megawatts of nuclear power due to be decommissioned at $9 billion.
"We want them to get it (the cost) nearer to $800 per kilowatt," he said.
Askew, keen to promote the AP1000, said up 5,000 manufacturing jobs could be created in the UK if British Energy opted to use the Westinghouse design in favour of CANDU.