Prices in the forward trading market for annual contracts starting this month shot up 28 percent between March and September in a rally sparked by soaring fuel prices.

"The overriding concern of British Energy was to reduce the group's exposure to potential falls in the market prices of electricity," the firm said in a statement. "Therefore the company sought to sell forward virtually all of our planned generation. As a result the company has not fully benefited from the more recent rises in market prices."

BE BGY.L , which is restructuring after nearly going bust in 2002 due to slumping power prices, last week reported a first-quarter loss of 115 million pounds.

The company, which operates a fleet of eight nuclear stations, said it may shorten the lifespan of half the capacity at its only coal-fired station at Eggborough in Northern England.

The firm said it had conditionally chosen not to invest in anti-pollution technology at two 485-megawatt units at Eggborough. This meant the units would not comply with emissions limits imposed under the European Union's Large Combustion Directive and would have to close by the end of 2015 at the latest.

However, the government had advised BE that it had until June next year to possibly reverse this decision and opt to install the necessary equipment to make the two units comply with the Directive, which starts in 2008.