British Energy Share Discussion Threads

[banny3] 20/2/2007 08:16

British Energy Raised to `Buy/Cautious' at Goldman Sachs:BGY LN

By Sandro Bottoni

Princeton, New Jersey, Feb. 19 (Bloomberg Data) -- British Energy Group PLC (BGY LN) was raised to ``buy/cautious'' from ``neutral/cautious'' by analyst Andrew Mead at Goldman Sachs. The 12-month price target is 451 pence per share.

Last Updated: February 19, 2007 16:05 EST

[philjh] 20/2/2007 08:12

BRITISH ENERGY UPPED TO 'BUY' FROM 'NEUTRAL' BY GOLDMAN SACHS

[pinhead3] 19/2/2007 22:23

Don't bother they're all crooks.

[daniel333] 19/2/2007 22:10

There has been an online petition set up to challenge the unfair withholding of VAT repayments by HMRC. Please sign it and forward to as many people as possible.

[richardbroughton] 19/2/2007 20:23

Gramji,
We obviously agree and I do like a good ump myself!

[gramji] 19/2/2007 16:19

richard
absolutely spot on , nuclear energy is definately the longer term solution and self sustenance for western gov therefore ,bgy withits head start in the uk and also restrucuting out of the way should benefit immensly and also a stronger balance sheet than few years ago.also with the govt having an interest politically even after selling off their shares will always be positive.
i am in for the longer run and it will not BE LONG BEFORE OTHERS REALISE AND UMP ON THE GRAVY TRAIN.
RGDS
GR

[richardbroughton] 19/2/2007 15:49

gramji,
It seems to me that short of some new "Star Trek" type energy source being discovered nuclear is a no brainer! The technology and safety will improve and I believe that the Western world could quickly become ungovernable if energy supplies are seriously disrupted. I think Iraq was motivated by the last petrol shortage a few years ago when the country faced meltdown after a couple of days of blockaded fuel depots. I think it frightened the Gov't badly and they realise independent power supply is vital and as far as I can see nuclear is the only realistic option. The politics and greenies mean that they have to proceed carefully and be seen to consider all options. I believe the decisions have already been made and it's now a selling job! They slipped up with consultation but I think we'll still end up in the same place. The article in the Independent by Patrick Moore (a green) highlighted a few posts ago is very interesting. Owston's very good posts highlight the economic issues but also the political ones and as we know political considerations can outweigh economic ones, particularly at local level, i.e. GB.

[gramji] 19/2/2007 14:01

hi fellow bgy holders
i was trading bgy pre restructuring then left due to obvious reasons and recently got back in at 4.39 and 4.14 . my feeling is that nuclear energy is here to stay in one form or another, bgy is here to stay whether as a sole entity or in my opinion due to their geographycal site location a potential takeover target even by larger usa or european companies.
i believe like few of you that it is a relatively good entry for longterm holders ,could even surprise in the upside to higher than previous highs in time.
any opinions?
rgds
gr

[banny3] 18/2/2007 18:46

The saying goes " no news is good news " so lets hope this is the case with BGY

[chris79] 16/2/2007 18:57

Regularly read the bb, but don't often contribute. Anyway, loads of credit to Owston on his very well written recent posts. I think the posts list the negatives very well, but i think the future is more positive than implied by post 216, but nonetheless it is genuinely refreshing to read a constructive criticism of a company that the usual rubbish ramping/deramping we read so much of on these type of boards.

I currently have BGY open at an average of 430 and am nervously content - if such a thing is possible! I really do think on NAV, profits, nuclear as a realistic future energy solution not dying industry the shares offer good value. What is unusual i think is that it is a true 'balance of probabilities' view as there really are so many issues here.

Good luck to all holders.

[jeeves2] 16/2/2007 14:43

well spotted sat69,

[banny3] 16/2/2007 13:40

Sat 69

How do you know they were buys ?

[owston] 16/2/2007 11:32

Sat,

I have a small position, the majority was sold at 628p when I realised how fast the forward price was falling.

I don't really see any positive (of any real significance) coming from BGY but I have a feeling that good news from government about a restructure of the electricity market mechanisms is around the corner.

While I believe this will be "rigged" for new nuclear there would be a lot of sense in such a reconstruction. At present, the price is the be all and end all. There is no real "value" applied to security of supply. The cheapest at the moment is gas and that's why most of the current production is moving that way.

If you factor in energy diversity and security of supply issues into price then nuclear will look much more attractive.

Unless you government want to run loss making plants in the current market (which they don't) then change has to come to provide a cash value for diversity and indigenous supply (by that I mean nuclear fuel is not a short term supply and we have tens of years worth of usable fuel already in the UK)

So, from a BGY performance of its own bat position, yes I am negative, from a holistic approach of the governments statements (which seems to have cross party support) then some good news cannot be far away. The likelihood in the short term has now receded with the Greenpeace action but possibly only by 6 months or so.

[owston] 16/2/2007 10:36

Richard/Sat69

I think the Hinckley/Hunterston news is in the price and there is potential upside if the reactors can be returned to service at greater than 70% power. On a site by site basis, at current power prices (£40+) on forward contracts they are still going to make a profit and any uplift in power later deemed commercially viable on against possible loss of life extension will be positive for the share price.

However, if prices move to, and possibly move below £25/MWH then I think the economic case may be much much harder. Having said that Dungeness B has defied grim reaper for more years than I care to mention. Dungeness B may have escaped the chop for many years because the decommissioning costs would have been more expensive in the short term than repair and BGY would have born the cost pre reconstruction in 2003, however, that's not the case now with the NDF. If any of the stations look as if they are long term uneconomic then they can be handed over to the NDF who pay the costs from there on.

For those looking for good news (sat69!) the capital spend on plant improvement should improve plant reliability and technically increase output. However, much of this money is cash that should have been spent years ago. On the negative side (sorry Sat69) the number of "surprises" that regularly jump out of the woodwork still don't look good.

I believe that this is basically down to the design of the AGR's. If you buy a Lada with lots of gadgets how long would you expect to be on the road for?

Ultimately the biggest factor in the near term will be the forward price of electricity. If this keeps falling and increased output does not compensate then something is going to have to give. They will either have to dump the loss makers (potentially Hinckley/Hunterston/Dungeness) and cut back on internal investment in the plant.

On the positive side (keep reading sat69...) as mentioned in the previous post the electricity market must be rigged by either guaranteed prices to nuclear or it simply won't get off the ground with private finance. If they want nuclear build then this has to be sorted first to get the finance to come forward. On that basis a rigged market for nuclear could be with us within 2 years.

I would be very surprised if the current BGY management were not in regular discussions with government. A further financial debacle at BGY when trying to get a new wave of nuclear power station built would be a dream come true for Greenpeace and the government will be very keen to avoid that.

A further positive must be the governments current 2/3rds share holding. If BGY is not in the new build programme then the company will simply wither away as its plants close and the government will loose heavily with it.

I think what I'm saying is that the government has too many fingers in BGY's pie to simply "let the market decide". It will of course let the market decide after the market has been rigged to ensure that the market gets the right answer.

When, where and more importantly how, I just don't know. But if something very major has not happened within the next 12 months on this front for BGY I would be very worried for the share price given the points I made in the previous post.

Happier now Sat69?

[h4rsh2] 16/2/2007 09:36

On the road to £4.50????

[richardbroughton] 16/2/2007 08:24

Owston,
Interesting, thought provoking piece, thanks. Do you think a lot of this is already in the price? Or is the near 50% price drop in 6 months mainly down to the shutdowns?
Regards
Richard

[banny3] 15/2/2007 19:26

Greenpeace Wins Review of U.K. Nuclear Energy Plans (Update5)

By Megan Murphy and Paul Dobson

Feb. 15 (Bloomberg) -- The British government will need to conduct a fuller review of plans to build new nuclear energy facilities, after a U.K. court ruled that the initial consultation process was ``seriously flawed.''

The High Court in London today backed claims brought by environmentalist group Greenpeace that ministers didn't present clear information on key issues such as the disposal of radioactive waste and the costs of new plants before publishing a report on its energy review last year.

``There was procedural unfairness and a breach of the applicant's legitimate expectation that there would be the fullest consultation,'' Justice Jeremy Sullivan told the court. ``It was not merely inadequate, but it was also misleading.''

The decision is a blow to the Labour government's efforts to replace older power plants with new ones that can cut emissions of gases blamed for climate change. Prime Minister Tony Blair advocates using nuclear energy as part of those efforts.

``We're in a race against time here,'' Trade and Industry Secretary Alistair Darling said in an interview about the ruling on British Broadcasting Corp.'s Radio 4 in London. ``Climate change is a major threat for us. The best thing to do is to learn from the judge's verdict, to consult and to get things back on track.''

The government, which received permission to appeal today's decision, will still press forward with plans to publish draft proposals about its energy policy next month. Ministers have argued that its program to encourage more nuclear and wind- powered electricity will cut carbon emissions by millions of tons.

`Sham'

Sarah North, the head of Greenpeace's anti-nuclear campaign, said today's judgment vindicated their stance that the consultation process before that decision was a ``sham.''

``The government completely failed to consult adequately and even kept relevant documents to themselves,'' she said. ``They've now been forced back to the drawing board to conduct a proper and lengthy review.''

Today's ruling was also hailed by opposition politicians from the Conservative and Liberal Democrats parties.

``You cannot perform a U-turn on nuclear power, as Tony Blair did between the last two government statements on energy policy, without a proper debate and a full discussion of the options,'' Chris Huhne, who is responsible for environmental issues for the Liberal Democrats, said in a statement.

Nuclear Needs

The Confederation of British Industry, the country's largest business group, said the government couldn't afford any more delays to its overhaul of energy policy.

``The last thing we need is further hold ups,'' CBI Director-General Richard Lambert said in a statement. ``Anything that delays the government in providing a clear framework for potential investors risks causing energy shortages that could cost the economy dear.''

British Energy Group Plc, the U.K.'s biggest power generator, said it was disappointed with the ruling and would continue to push for new nuclear facilities.

``This does not detract from the fact that there is a clear and obvious need for new generation capacity and nuclear power needs to be a part of that,'' said Sue Fletcher, a spokeswoman for British Energy. ``We will continue to make the case for new nuclear power.''

Justice Sullivan, Britain's top judge on planning law, has challenged the government before over procedural issues. Last year, he ruled that the U.K.'s use of ``control orders'' to monitor terror suspects violated human rights laws, threatening key parts of the government's anti-terrorism legislation.

To contact the reporter on this story: Megan Murphy in London at [e-mail] ; Paul Dobson in London at [e-mail]