British Energy shares plunge as nuclear reactors closed

British Energy has revealed it is to close down 4 nuclear reactors and shut off a quarter of generating capacity for the immediate future.

The revelation came after corrosion was discovered during routine inspections at the weekend at its Reactor 1 Hartlepool nuclear power station. The corrosion was discovered in wire-winding in the steel and concrete encasement around the reactor’s boiler closure units.

The company provided no indication as to the seriousness of the corrosion or how long the plants will be closed.

British Energy said it took a ‘conservative decision’ to shut down the second reactor at Hartlepool and the similarly designed reactors at Heysham 1 in the North West, where one of the reactors was not working due to refuelling.

Together, Hartlepool and Heysham 1 have the capacity to produce 2360 megawatts, able to provide the majority of the electricity required for London. The announcement of the closure sent the spot price for electricity rocketing.

Furthermore, shares in British Energy plunged 13% following the announcement. This was a setback for investors who had bid up the shares by over 35% since August on expectations that the company had put its problems behind them.

Just a year ago, shareholders were affected by the company’s decision to shut another 2 of its 8 nuclear power stations - the even older Hunterston B in Scotland and Hinckley Point B in Somerset due to cracks in the boiler. These power stations are back in action but only running at just over half of capacity.

Discuss this in the Finance Markets forums

Story link: British Energy shares plunge as nuclear reactors closed