The deal brokered by the government saw its Department of Trade and Industry agree to shoulder the decommissioning costs for a number of BE’s nuclear plats, thought to amount to some GBP5.1 billion.
The move effectively saved the company from collapse at a time of extremely low power prices. However the government’s bail-out has subsequently proved highly controversial given that wholesale power prices have surged in the months since the deal.
A spokesman for the NAO said that power prices were inherently volatile and difficult to predict, meaning the government’s actions in 2002 were valid. The NAO also cautioned that any fall in power prices risks placing further costs upon the taxpayer, and that the government must be vigilant as to this risk.
