British Energy Share Discussion Threads

[waldron] 26/4/2005 05:55

'Dismantling costs should be part of nuclear-project feasibilities'
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International rating agency, Fitch Ratings, said in a special report published yesterday that future nuclear dismantling costs must be taken into account when assessing the profitability of nuclear power producers.

However, it warns that disparities in assumptions, funding and regulation make comparisons difficult between countries.

"Where most of the cash requirements for thermal installations are incurred as the plant operates, a nuclear installation requires a larger original investment, has lower operating costs, and then much higher closure costs," says senior director in its Energy team Laurence Monnier.

With about a third of the current 155 operational nuclear reactors needing to be decommissioned by 2025, these closure costs are looming ever larger on the operators' agenda.

The report highlights the different strategies that have emerged to deal with the future costs and compares the liabilities of the major operators of nuclear plants across Europe, such as EdF S.A. ('AA-'(AA minus)/'F1+'/Negative Outlook), RWE A.G. ('A+'/'F1'/Stable Outlook), E.ON A.G. ('AA-'(AA minus)/'F1+'/Stable Outlook) and Slovenske Elektrarne A.S. ('BB+'/Positive Watch).

"Nuclear provisions or liabilities may be long-term but their sheer size - in excess of €10-billion for large European players, representing between 50% and 150% of net debt - requires an adequate funding strategy to be in place well ahead of time," notes an Energy team analyst David Shnaps.

Dedicated funds available today represent only a fraction of these costs' present value, but Fitch notes that, depending on each country's regulations, the operators may be able to defer these costs after closure.

The report, entitled "Assessing the Risk of Nuclear Liabilities", is available on Fitch's website at www.fitchratings.com.

[pc4900074200] 26/4/2005 04:25

Telegraph. 26-04-2005.

British Energy's 2020 vision

TO be nuclear or to pollute the atmosphere, that is the question for Britain's energy industry. It's a problem equal to anything the troubled Danish prince faced, which might explain why Prime Minister Tony Blair is said to want a national debate on the issue - beginning this summer. Labour wants to cut CO2 emissions by 20pc by 2020 but there simply isn't the capacity in renewables to keep the nation's nightlights twinkling. Nuclear, for all its environmental complications, is the best option. And, in Britain, British Energy is the nuclear industry.

But carbon emissions are only the start of the problem. Five of the company's eight plants are due to be decommissioned by 2014, removing over 10pc of the country's total power generation. Little wonder, then, that both the Tories and senior Government advisers are itchy for new ones.

British Energy looks set to be stuck right at the centre of a fierce debate after May 5.

The company only returned to the stock market in January after its rescue restructuring. Shareholders took a bath last time, when creditors seized 97.5pc of the equity after electricity prices fell to £15 a megawatt hour, but memories seem to be short. The shares have risen from 286p to 325p, valuing it at 12 times 2005 earnings on Deutsche's bullish forecasts, with no dividend before 2008.

Bears cite the company's dying assets (although the plants are likely to get five year life extensions), and high costs (it needs electricity prices to stay above £20).

So what's the pull? In the short term: high energy prices (currently around £35) and productivity improvements from a £500m investment programme. Long term, though, British Energy will be critical to providing the Government security of power supply and lower carbon emissions. And nimbyism will ensure new plants are built on the company's existing sites.

Political companies are always risky bets, but there will have to be support for this one. Those with the stomach for a long, bumpy ride may want to get on now.

pc

[teej] 25/4/2005 10:13

BGYered, thank very much. So they don't even want to tell us ? This all stinks so much, enough to make one just a tad cynical!! What a surprise that BGY is doing so well now!

regards

[wildchild] 22/4/2005 21:11

Anyone any idea what we should be expecting on Monday. On a technical basis it closed at a new high so I imagine the city think the results will be good.

[maywillow] 22/4/2005 15:27

British Energy to issue trading update Monday

LONDON (AFX) - British Energy Group PLC said it intends to issue a
post-year-end update at 7.00 am Monday to include an update of output for the
financial year ended March 31 and the the fixed contract book for the financial
year ending March 2006.
[e-mail]
hjp/

[bgyered] 21/4/2005 20:29

Teej - you'll find details of the reward scheme in the 900 page "deforestation" document sent out last year. See pages 482 - 499. Their bonuses are 10% dependent on an (unspecified) increase in BGY market capitalisation this year under an Interim Bonus scheme which covers the current financial year up to 31st March 2005 (so we'll be hearing within 60 days how much they've snouted from the trough) and a Long Term Bonus scheme which runs from 1st April, where the targets can be varied every year (to ensure they get the max no doubt...)

[teej] 14/4/2005 08:30

Hello,
If i remember rightly, at the restructuring time the board put together a reward package, where the directors were rewarded if the share price reached a certain level at a future date. I have been looking at the RNS's and can't find this, does anyone know where I can find it or have any details on this agreement?

Many thanks

[bgyered] 12/4/2005 21:24

How far does BGY have to rise before the press has something to say about why this is happenning?

[luckygit] 12/4/2005 15:51

More big buys after close. Looking positive for tomorrow.
LC

[giovannina] 11/4/2005 15:11

a lots of buy today...is it a red hot hot tip..???

[mangal] 11/4/2005 08:43

I've today added the warrants, BGYw, to the "Equity Warrants List(Wt)" thread:

call-logger, thanks a lot for your input.

[call-logger] 07/4/2005 11:26

Cheers WildChild :-)

You too.

[wildchild] 07/4/2005 08:32

call-logger : I can only sympathize with your average price but wish you good luck anyway.

[call-logger] 07/4/2005 08:17

Wildchild

As I have these shares at an effective purchase price of 30 quid (if I take up the warrants, £85 if I don't) I am yet to count this rise as fantastic.

Still, as a much better-run company says, every little helps

[wildchild] 07/4/2005 07:57

I'm surprised no-ones mentioned our fantastic rise of late to touch 300p. There should be more to come with energy prices the way they are. I bought some at 290.25p yesterday after they finally broke through that level. Good luck everybody.
Mr. Cawkwell : You seem to be very quiet on here lately....Hope you are just as keen on these as you were.

[daithedeath] 27/3/2005 21:24

What about the experteez at the magnox division they have inhereted their experts from the former CEGB .The return perhaps ???? ho ho ho !!!

[pc4900074200] 27/3/2005 09:49

Scotand on Sunday. 27-03-2005.

Hitting the nuclear button.

Iain Dey. [e-mail]

IN THE bowels of British Energy's new Livingston headquarters last weekend, an emergency board meeting took place which decided the fate of Mike Alexander, the nuclear power firm's chief executive. It was decided that Alexander was to be replaced by Bill Coley - a veteran US nuclear power guru who has sat on BE's board for the past two years. When the news broke on Monday morning, traders and analysts - many of whom had met Alexander only two weeks ago - were spluttering over their lattes in disbelief.

Officially, Alexander had "decided to seek new challenges elsewhere" - a curious move from a man who had just completed the biggest financial restructuring in Britain's corporate history - a deal that embroiled the Treasury, the European Union and a string of banks and creditors in a complex bureaucratic muddle. Unofficially, sources close to the group claim that Alexander simply didn't have the skills to run British Energy's nuclear fleet to the standards the firm now demands.

While this may seem a fairly benign reason for a leadership coup, British Energy's ability to generate nuclear power with supreme efficiency is now of greater importance than it has ever been before.

No matter who wins the forthcoming general election, the prospect of the UK building new nuclear power stations will be back on the agenda within a matter of months. Inside the corridors of power, the question is not if we should build new nuclear plants, but how long the politicians can hold off before informing the public of an inevitable reality. The real debate is no longer one that separates the pro and anti-nuclear lobbies, but one that divides the realists from the fanatics.

Fears of the lights going out as the UK's oil and gas reserves become depleted are forcing the government's hand. But concerns about global warming are urging the debate further in favour of nuclear plants - which emit no greenhouse gases into the atmosphere at any stage in their life cycle.

Assuming new plants are built, there is only really one company with the expertise to run them - British Energy. Having tested the faith of both the government and the general public in its recent travails, Coley will have to develop an impeccable safety and performance record at British Energy's eight existing plants to make this idea palatable.

"The reality is that whatever the history or whatever doubts historically people had of nuclear power, it generates more than 20% of the UK's electricity - and something more like 40% of Scotland's electricity," one energy expert said last week.

"If we simply proceed to wish away nuclear power, over the next 10 or 15 years, then you would have to replace that with new gas stations. That would leave us 70% dependent on gas by 2020, with 90% of that gas imported. Then, if you replace nuclear energy with more fossil fuel plants you simply make our emissions problems worse."

Under the current nuclear phase-out plans, the UK will have only one nuclear station remaining in 15 years' time - Sizewell B Nuclear's share of the national grid's supply would fall from about 23% at the moment to nearer 4%.

While wind farms are popping up all over the country, they still account for only 1% of the energy we generate. Even if most of the country was to become swathed in turbines, wind energy would struggle to fill the gap left behind by the dying nuclear plants.

A model exists within Whitehall for the ideal structure of the power market. That shows nuclear power accounting for up to 35% of the UK's generation requirements, renewables up to 20% and gas and coal plants making up the remainder. If the nuclear portion of that target is to be met, a vast new-build programme will be required.

Although no one is likely to talk openly about nuclear expansion until the election is over, moves are already under way to soften public opinion on building new nuclear power stations. Last week, a report from the cross-party Commons Scottish Affairs Committee pointed to nuclear's "proven track record" and suggested that while it may be the most controversial option, it could also be the best one.

Prime Minister Tony Blair has recently reiterated that the 2003 Energy White Paper prepared by his former energy minister, Brian Wilson, "left the door open" to new nuclear plants. Blair has also claimed that he fought "long and hard to make sure the nuclear option was not closed off". Energy minister Mike O'Brien has also made positive noises about building new nuclear plants, tempered by cautions on the economics of such a project.

Conservative leader Michael Howard, who can see Dungeness power station from the bedroom window of his constituency home in Kent, is more cagey. He has said a Conservative government would have to consider the nuclear issue once it was in office. But his shadow energy minister Laurence Robertson has been actively voicing pro-nuclear views in the chamber itself and in various debates around Westminster.

Environmentalists including Professor James Lovelock are also beginning to speak out in favour of nuclear power, insisting that the dangers of global warming and the damage that would be done were we to rely more heavily on fossil fuels is greater than any threat posed by nuclear reactors. Lobby groups including the CBI are calling for the nuclear issue to be addressed.

Whitehall sources say this is all part of a strategy gradually to make the public warm to the concept of new nuclear reactors. "The government has done a very good job on this so far," said one insider. "By focusing on energy efficiency gains and renewables in this first phase, and then looking at how well or badly we are doing in terms of carbon dioxide emissions, we can hopefully take the public with us on the nuclear debate."

Of course, the biggest problem faced in swaying the public is the question of nuclear waste. There is still no definitive way of disposing with spent nuclear fuel. Most of the UK's nuclear waste is lying in underwater storage tanks on the sites of our nuclear power plants, awaiting a longer-term solution.

Scotland's First Minister, Jack McConnell, whose influence in this debate would be limited anyway, has recently said that he could not sanction a nuclear building programme until the waste issue was resolved. He's not alone in this view.

But the new nuclear plants being built in China, Canada and 26 other countries in the world are substantially more efficient than the existing generators in the UK. Over their 40 to 60-year lifetime, a new fleet of UK nuclear reactors would only increase the existing waste pile by about 10%.

Given that a solution to the waste problem needs to be found anyway, it is no longer being considered as a sufficient disincentive to build new plants. Companies such as AMEC are also developing new technologies to aid disposal - including modifications of a product called Geomelt, which is being used to vitrify liquid toxic waste at some of the biggest military bases in the US.

Progress is being made, but with the major nuclear switch-off programme kicking in just seven years from now, it seems unlikely that a decision on the role of nuclear power in the future can wait until the final solution to the waste problem is known. "We don't have time for this to turn it into a long-running planning debate like Heathrow Terminal 5," said one industry source.

Assuming the electorate can be satisfied that the nuclear option is the best way forward, the next major problem lies in how new nuclear plants would be financed. Nuclear plants cost less to run than conventional power stations, but the up-front capital cost is enormous.

After having its fingers burnt with both British Energy and its state-owned sister company BNFL, the Treasury has made it clear behind closed doors that there will be no more handouts for nuclear power.

British Energy, having been on the brink of going under just three years ago, is not in a position to go out and borrow a few billion pounds - and the financiers it has spoken to want guarantees about the prices it would get for its electricity over the 40 to 60 years of a nuclear plant's life. At the moment there is no liquidity in the wholesale energy markets for contracts that extend beyond 12 months.

These are serious concerns - British Energy's problems were caused largely by a slump in wholesale power prices, brought about by energy regulator Ofgem's moves to stimulate competition in the energy market. At £16 per megawatt hour, British Energy was viable, but when prices slipped to £12 per megawatt hour, it almost went bust.

PricewaterhouseCoopers, which acted as an adviser on a nuclear plant built in Finland recently, using entirely private cash, has been working on models of how private money could be used to finance a UK nuclear building programme. It is understood that other consultancies are also working up hypothetical finance proposals.

Within government, plans are afoot to find fiscal incentives that would make financing nuclear plants attractive to the private sector.

As part of this, it is looking at restructuring the entire wholesale power market. That would effectively see three markets created - one for nuclear, one for renewables and one for fossil fuels. Tax breaks could then be targeted more specifically at different types of energy to tip the balance between the different breeds of generation towards the government model.

Regardless of how the new plants are financed, British Energy is in prime position to run such a fleet. Other utilities could decide to jump into the market, but the likes of ScottishPower and Scottish & Southern Energy are focusing their attentions on renewables. In any case, all the skills required to run nuclear plants rest with British Energy.

Under the terms of its rescue deal, British Energy is barred from running any more nuclear plants until 2010. But there is nothing stopping it from working towards building new reactors.

If British Energy is to have a viable business in 15 years' time, it needs new power stations to run. Were BE to slip up at any stage along the way, this would be placed in jeopardy - leaving the UK's entire future nuclear policy at risk.

Perhaps the decision to replace Alexander with Coley, the battle-hardened executive with a long track-record in America's nuclear power industry, was influenced by more than just the British Energy board.

pc

[pc4900074200] 27/3/2005 09:46

The Scotsman. 27-03-2005.

British Energy poised as government prepares go-ahead on nuclear power.

IAIN DEY AND TERRY MURDEN.

BRITISH Energy is in talks with City institutions to raise funds for a new generation of nuclear power stations in anticipation of ministers swinging their support behind a massive construction programme after the election.

The Livingston-based group, which last week ousted its chief executive Mike Alexander, has been sounding out potential private sector financial partners. The discussions are supported by the Treasury, which is understood to be working on potential tax breaks for private companies willing to support the building of nuclear power plants.

The latest development follows a report published last week by the House of Commons Scottish Affairs Committee, which suggested nuclear power may be the best way to solve the UK's looming energy crisis.

Following British Energy's previous financial troubles, the government is said to be unwilling to use public money to finance new nuclear stations.

But British Energy - the only firm likely to be tasked with running new nuclear power plants - would be unable to finance projects on its own.

A restructuring of the wholesale power market may be necessary to give private backers the stability they need to invest in nuclear power.

The CBI has also called on the government to embrace new technologies and face up to difficult decisions, such as the nuclear option, as it attempts to meet tough targets on cutting greenhouse gases.

The employers' group has offered its support to meeting the 2050 Kyoto target on reducing emissions, but wants individuals and other countries to match that commitment.

Michael Roberts, the CBI's director of business environment, said business was also looking for government to combine leadership on the issue with pragmatism.

His comments coincide with the publication today of the Commons environmental audit committee report into the challenge of climate change. Roberts said: "We support the government's goal for the world's developed economies to cut greenhouse gases by 60% by 2050, and for the UK to commit to such a path.

"But while there is action UK-based businesses can take now and in the future, we must combine leadership with pragmatism if we are to safeguard our competitiveness."

The CBI claims that while business emissions fell by nearly 17% in the past 15 years and are set to fall further, household emissions fell by less than 4%.

Roberts said: "Improved policies could help secure further gains in business energy efficiency, but the challenge of also cutting emissions from households and transport cannot be ducked. At best, action on all these fronts will probably only achieve half of what we need to by 2050.

"So government must also show renewed enthusiasm for promoting new technologies and serious political will when it comes to addressing difficult questions like the future role for nuclear power."

pc

[bgyered] 18/3/2005 10:48

So British Energy's sites are going to be worth far more than the company is....

Blackouts Warning Over Nuclear Power 'Shortage
March 11, 2005 11:47pm
Knight-Ridder / Tribune Business News


Mar. 11--The Government will have to commit to building nuclear power stations or leave the country under the threat of energy blackouts for years to come, the engineering industry is warning Downing Street.

Ahead of a general election in which the cost of electricity and security of supply could become an issue, the Institution of Civil Engineers is accusing the Government of sweeping the future of nuclear power under the carpet.

"It would be highly irresponsible for the Government to dismiss the option of nuclear power for future energy supplies," said ICE executive David Anderson.

He cited its own report which claims the British public have been hoodwinked into believing green energy from wind farms will be capable of replacing the volume of power being lost by closing down nuclear stations.

"Failure to consider nuclear power could lead to over-dependency on imported energy supplies. Politically, nuclear is not a vote winner -- but nor is the constant threat of blackouts in the future," said Anderson. "Nuclear power stations currently produce 22 percent of the UK's electricity but are closing down at a rapid rate.

"By 2023, 11 will have shut down, leaving just one [Sizewell B in Suffolk] generating electricity. With no current plan for replacements and a five-to-10-year wait from drawing board to completion, the Institution of Civil Engineers is asking how the gap in generating electricity will be filled. The public overestimate the contribution renewable sources, such as wind, can make.

"By 2020, the public reckons renewables would contribute nearly a third of electricity generation. In fact, it is likely to be less than half that -- at its very best 15 percent." There has effectively been a moratorium on the building of nuclear power stations since the beginning of the decade after Tony Blair's major review of the energy industry.

This status quo undoubtedly played a role in destabilising British Energy, the country's major nuclear operator which has only just come back to the stock market after a Government-led rescue and major restructuring.

British Energy is forecasting that its portfolio of nuclear stations will start closing from the end of the decade -- beginning with Dungeness in Kent -- and has only limited hope of five-year life extensions.

The ICE believes nuclear stations can easily be built on current sites which benefit from being geographically remote and from having existing connections to the country's transmission network.

[southmifti] 17/3/2005 21:24

SASKATCHEWAN--(CCNMatthews - March 16, 2005) - Cameco Corporation (TSX:CCO) (NYSE:CCJ) announced today that it has signed a toll-conversion agreement with British Nuclear Fuels plc (BNFL) to acquire uranium conversion services (UF6) from BNFL's Springfields plant in Lancashire, United Kingdom. Under the 10-year agreement, BNFL will annually convert a base quantity of 5 million kilograms of uranium (kgU) as UO3 to UF6 for Cameco.

In 2001, BNFL announced that the Springfields facility would close in 2006. This new agreement will keep the plant operating for the duration of the agreement.

Cameco currently refines uranium concentrates to UO3 at the Blind River refinery and ships this material to the Port Hope conversion facility. Both facilities are located in Ontario. Under the agreement with BNFL, Cameco will also ship UO3 from its Blind River refinery to BNFL's conversion plant where it will be toll converted to UF6. Cameco will then deliver the UF6 to its utility customers who ultimately use it for fuel in nuclear reactors after further processing. Cameco currently has more than a quarter of the western world's UF6 conversion capacity from its Port Hope plant.

Cameco will invest about $6 million to expand production and drum-filling facilities at its Blind River refinery and $4 million to construct drum tipping and washing facilities at BNFL's Springfields plant. UO3 shipments from Blind River are expected to begin later this year with UF6 conversion shipments from BNFL starting in mid-2006. Cameco expects this agreement will be accretive to operating cash flow and earnings beginning in 2006.

"This agreement allows us to effectively achieve a significant increase in UF6 production capacity, sales and market share by investing a small amount of capital," said Jerry Grandey, Cameco's president and CEO. "At the same time, it preserves Springfields' production capacity at a critical time in the industry and enables us to lower our unit costs by utilizing Blind River's unused capacity."

Historically, the Blind River refinery has not operated anywhere near full capacity since it has been limited by the capacity of Cameco's conversion facility at Port Hope which receives essentially all of Blind River's UO3 production.

Cameco has already secured long-term commitments for a significant volume of contracts for conversion services with utility customers to baseload this new agreement.

"Today Cameco has taken another step toward its vision to be a dominant nuclear energy company producing uranium fuel and generating clean electricity," Grandey said.

BNFL is an international nuclear energy company based in the United Kingdom. In April 2005, ownership of the Springfields plant is scheduled to be transferred to Britain's Nuclear Decommissioning Authority (NDA), a government agency established to take responsibility for the majority of the United Kingdom's civil nuclear assets and liabilities.

Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest uranium producer. The company's uranium products are used to generate electricity in nuclear energy plants around the world, providing one of the cleanest sources of energy available today. Cameco's shares trade on the Toronto and New York stock exchanges.

[rlockyer] 17/3/2005 11:38

more nuclear power pls.
will be the call soon as oil keeps rising.

oh how times have changed.