British Energy’s latest cash crisis
British Energy faces an uncertain future as talks begin over its dire financial situation. The nuclear power company is heading for insolvency with a £500 million loss recorded over the past year. The company is calling for immediate aid from the government, reports the BBC.
British Energy has been losing money steadily as the price of electricity on the wholesale market has dropped 40% over the past four years. It now costs more for the company to produce electricity than to sell it. Other electricity companies are also struggling in the current market – few are making money.
The nuclear power company is asking for a financial rescue package from the government. But Trade and Industry Secretary Patricia Hewitt told BBC News: “There’s no question at all of taxpayers writing a blank cheque to British Energy and its shareholders.” She said the only reason she was getting involved in discussions was because the government had a responsibility to ensure the safety of nuclear power.
As well as operating eight nuclear power stations in the UK, the company has a joint venture with a US energy group and is seeking a buyer for its share, which could generate £200-£300 million.