Nuclear closures threaten winter supply

The discovery of more cracks in boiler tubes forced British Energy to shut down two plants, Hunterston B in Scotland and Hinkley Point B in Gloucestershire. The company also disclosed that only one of its eight plants - Torness in Scotland - is operating at full output.

The closure of the aging 30-year-old plants and the extent of the supply cutbacks sent British Energy shares into free fall and raised renewed fears about winter supply shortages. It also dealt a further blow to government hopes of selling its 65 per cent holding in the company.

The shares slumped almost 24 per cent, slashing the company's market capitalization by 800 million pounds to 2.44 billion pounds in the process.

Nuclear power accounts for around 20 per cent of electricity output but the catalogue of problems listed by British Energy posed fresh questions over the reliability of the plants at a time when the Government is planning an expansion of atomic power.

British Energy has told investors and the Trade and Industry Department it is unable to provide a firm timetable about when its plants will be making a bigger contribution to power supplies.

Stephen Billingham, the finance director, said the unplanned shutdowns meant the company would have to buy supplies from the wholesale market to meet contracts. The market duly responded by pushing up the price of baseload electricity.

The nuclear setback overshadowed the opening ceremony of the Norwegian Langeled pipeline which is capable of providing 20 per cent of Britain's winter gas needs. The 700-mile long pipeline, the world's longest undersea link, brings gas from Norwegian fields to feed into the gas network at Easington, East Yorkshire.