City to be asked to dig deep for nuclear power: Private finance sought for Sizewell C reactor

NUCLEAR Electric has appointed Price Waterhouse, the accountancy firm, to help raise private finance for new nuclear power stations. The state-owned generator is also understood to be seeking advice on privatisation, pending the Government's review of the nuclear industry, expected later this year.

The company's chairman, John Collier, has said that privatisation is the only way forward for the nuclear industry. However, Nuclear Electric needs private finance irrespective of privatisation as it hopes for approval to build a second pressurised water reactor at Sizewell in Suffolk.

Sizewell Cwould be similar to its Sizewell B reactor, which is due to come on stream next year, but twice as big. It is expected to cost pounds 3.45bn in 1992 prices. The company accepts that the Government would not pay for it.

Price Waterhouse will assess the commercial viability of new plant and advise the company on a business strategy ahead of the nuclear review.

Nuclear Electric accounts for more than one fifth of the electricity generated in England and Wales, and is expected to overtake PowerGen as the second-largest generator within a few years.

The company benefits from a pounds 1bn annual subsidy raised through a levy on electricity bills, although this is expected to be reduced and abolished by 1998.

The main problem in privatising Nuclear Electric is historic liabilities estimated at pounds 8.5bn related to the nuclear activities of the old Central Electricity Generating Board.

Scottish Nuclear, which has two plants north of the border, also said yesterday that private finance was needed for new power stations, but was less enthusiastic about privatisation. The Scottish company announced a fivefold increase to pounds 65.8m in its net profits last year on sales of pounds 523.5m.

It is the second year of profitability for Scottish Nuclear, which increased its output by 13 per cent and now supplies just under half of all Scotland's electricity.

James Hann, the chairman, said the company was on track to reduce generating costs to its target level of 2.5p per kilowatt hour within the next couple of years.