July 7 (Bloomberg) -- Vattenfall AB, the Nordic region’s biggest utility, said its Kruemmel nuclear reactor in Germany won’t start for “several months” and that the plant’s head resigned.

Vattenfall will replace the 1,346-megawatt facility’s two tranformers, the Stockholm-based company said today in an e- mailed statement. Hans-Dieter Lucht, the head of the plant near Hamburg, resigned after two automatic halts this month.

The 25-year-old Kruemmel reactor stopped on July 4 for the second time in a week following a short circuit in one of the transformers. In June, the plant returned from a two-year outage caused by a fault in the other transformer, which led to a fire.

“It’s not disastrous for Vattenfall, but nuclear is a low cost generation where they would expect to make a good margin,” Neil Beddall, director of utility credit research at Barclays Capital, said today in a telephone interview from London.

E.ON AG, Germany’s largest utility, owns a 50 percent stake in Kruemmel. Vattenfall’s 771-megawatt Brunsbuettel reactor, also co-owned with E.ON, has been shut for two years following a short circuit in the power grid nearby. The outages, which prompted an initial “exodus” of clients, cut first-quarter earnings by 135 million euros ($188 million), Vattenfall CEO Lars Josefsson said in April.

“With the decision to switch the machine transformers we are consequently taking the path of the highest safety,” Tuomo Hatakka, head of Vattenfall’s Central Europe division, said in today’s statement.

Initial Investigations

Initial investigations have shown that the incident occurred because an appliance used to measure partial discharges at the transformer hadn’t been installed before the plant restarted, Vattenfall said.

Walther Stubbe will replace Lucht as head of Kruemmel, the company said, without providing details of his background.

Since Kruemmel’s 2007 halt, Vattenfall has carried out work to avoid short circuits and eliminate any “serious impact” should such an event occur, the company said in a separate statement on July 5.

To contact the reporter on this story: Lars Paulsson in London at lpaulsson@bloomberg.net

Last Updated: July 7, 2009 06:31 EDT