British Energy reviewing designs for new nuclear

British Energy Group Plc said it was looking at four designs for the next generation of nuclear power stations in Britain, as it posted a 4 percent fall in nine-month core earnings recently

"Negotiations with a number of potential partners are ongoing and we expect to provide a further update around the end of this financial year (end-March), the company said.

British Energy said it still expected four reactors at Hartlepool and Heysham 1 to return to service in the second half of 2008 after modifications costing no more than £50m in its 2008/09 year.

It said lower prices and higher unit operating costs meant its adjusted earnings before interest, tax, depreciation and amortisation fell to £745m in the nine months to end-December, meeting forecasts.

It announced an additional dividend of 14.5 pence, towards the top end of expectations. British Energy has a policy of paying an additional dividend after nine months to return all surplus capital to shareholders.

Cazenove analysts, who rate British Energy stock as "outperform", not least because of its dividend yield, said in a broker note: "In a risk averse market, sentiment towards British Energy remains exceptionally weak.

"However, the fundamentals of the investment case continue to improve with high electricity prices, lifetime extensions for plants and the ever growing likelihood of new nuclear build."

Green light for new nuclear
On January 10, Britain gave the go-ahead to a new generation of nuclear power stations, setting no limits on nuclear expansion and adding momentum to atomic energy's worldwide renaissance.

The ruling Labour government considered nuclear power unattractive as recently as 2003 but now says it will help Britain meet climate change goals and avoid overdependence on imported energy amid dwindling North Sea gas and oil supplies.

Nuclear power stations provide about 18 percent of Britain's electricity now, but many are nearing the end of their lives.

British Energy said eight sites its owns next to existing licensed nuclear facilities "rank among the best potential candidates for the construction of new nuclear power stations".

British Energy also said it had signed a deal with electricity network operator National Grid Plc to provide extra capacity from 2016 at four of its sites in the south of England -- Bradwell, Dungeness, Hinkley Point and Sizewell.