Executive Director: Graham Spall / Infrastructure Services Department
Guidance Consultation,
Nuclear Unit,
Department for Business,
Enterprise and Regulatory Reform,
Bay 125,
1 Victoria Street,
London
SW1H 0ET
Email: / Grantfield
Lerwick
Shetland
ZE1 0NT
Telephone: 01595 744800
Fax: 01595 744804
www.shetland.gov.uk
If calling please ask for
John Mouat
Direct Dial: 01595 744826
Our Ref: JM/MR/EL30 / Date: 16 May 2008
Your Ref:
Dear Sir/Madam,
Consultation on funded decommissioning programme guidance
for new nuclear power stations
Before responding in detail to this consultation it is important to state that the Council believes there is a fundamental misconception concerning the management of radioactive wastes that is encouraged by the terminology in general use. The Council does not believe radioactive wastes can be disposed of because of the vast timescales involved, with intermediate and high activity wastes in particular. Rather the Council believes radioactive wastes should be stored and managed safely and securely in suitable facilities. By using the term "disposal" this encourages the misconception that the problem is resolved, rather than it being an on-going issue for hundreds or thousands of years. However, in order to response to this consultation the Council reluctantly uses the terminology adopted by BERR. In addition in its Statement of Principles it states “The Council opposes any process or activity that involves new or additional radioactive discharges into the environment, as this is potentially harmful to the human and natural environment. “ and is therefore is against the building of a new generation on nuclear power stations in the UK.
Before detailing the Council's serious misgivings about the principles underlying the guidance, the financial proposals and the timetable the Government wants to adopt, there are aspects of the guidance programmes the Council believes are worthy of support.
The Council believes the establishment of a Nuclear Liabilities Financing Board and the proposed Decommissioning and Waste Management Plan (DWMP) for any new reactor are sensible proposals for dealing with such complex and hazardous developments. However there are a number of specific concerns:
· The DWMP must be regularly reviewed by the regulatory authorities so it can be updated to take account of new technologies, new safety concerns, changing environmental regulation and other issues. This will inevitably have implications for the funding arrangements for decommissioning and waste management.
· It is vital that the management and control of any funds for the decommissioning of a reactor or the management of higher level wastes must be totally independent of Government and the operator. This is vital to ensure any funds are not used by either the operator or Government for other purposes and to protect the interests of the public. Independent segregated funds will also protect against the failure of an operating company.
· It is also important that an operator invests sufficient monies into decommissioning and spent fuel funds as soon as a reactor begins operating. Company failure, or operational or safety problems could arise at any time in a reactor's life. It is vital therefore that there are sufficient funds available to decommission the plant and deal with the waste from 'Day One' otherwise the risks and costs may have to be met by the taxpayer.
· The Council is also unhappy about the suggestion that surpluses in a fund would be returned to the operator once its liabilities have been met. Instead the Council believes any surplus should be retained by the independent financial authority in case it is needed to meet unforeseen future issues. This will help protect the public from financial risk.
The Council rejects many of the general principles in the Government's proposals and believes they are likely to mean increased financial risk for the public and greater confusion, delays and uncertainties in the management of the country's radioactive wastes.
Providing operators with a fixed price and capping their potential costs may well encourage the building of new reactors, but only at the expense of greater financial risks to the public.
The Council finds it unbelievable that the Government can confidently propose a fixed unit price and capped costs when all the evidence points to huge uncertainties, the lack of vital information and the outstanding decisions that have still to be made.
· There is currently insufficient information and experience on the decommissioning of existing commercial reactors. Estimates of the cost of decommissioning existing reactors have been grossly underestimated. In 1989 the estimated cost of decommissioning a Magnox reactor was £250 million. By 2008 the estimated cost has increased to £1 billion, a four-fold increase.
· None of the proposed new reactor designs have been built. There is therefore no experience of the actual building, operating or decommissioning costs and their operational reliability or safety issues. The only current example of any of the proposed designs is the first-ever European Pressurised Water Reactor under construction in Finland. This project is already two years behind schedule and 50 per cent over budget.
· There is no experience or information about spent fuel from any of the designs. The new designs involve the practice of high burn-up of fuel. More enriched uranium is used in the fuel and it is left longer in the reactor. This results in higher radioactivity, greater heat and higher fissile content and has significant implications for any waste repository.
· There is no detailed design and no site selected for a deep geological repository for the wastes concerned in this consultation. Any reasonable estimate of the construction and operating costs of a repository is impossible without this basic information. All financial estimating is based on computer modelling.
· There is uncertainty for communities considering 'volunteering' for possible siting of a waste repository. If only legacy waste was involved, then communities would know the size of the facility and its lifespan. But now communities will not know how much waste might be involved from an unknown number of new reactors - nor whether they might have to take wastes from another round of new builds might take place at some point in the future.
BERR quotes the White Paper on nuclear power, Meeting the Energy Challenge, (January 2008), where the Government stated that investors in new nuclear power station "need clarity on the maximum amount that they would be expected to pay for the Government to take responsibility for their future waste in a geological disposal facility. This cost certainty would enable them to take investment decisions and seek financing." (Paragraph 2.9).
Given the lack of information detailed above the Council cannot understand how the Government can have confidence in any fixed upper price that energy companies will have to pay for disposing of waste and spent fuel. With the uncertainties and the history of projected costs being gross underestimates, the Council believes it is no comfort for the public to know energy companies "would be prepared to pay a significant risk premium". The Government says this risk premium "should help to ensure that the operator bears the risks around uncertainty in waste costs" (Paragraph 2.10) and protect the public if the actual cost of geological disposal exceed projected costs.
The public cannot have confident in a proposal that can only offer something that "should help" to reduce the financial risk, particularly as many billions of pounds could be involved.
In addition the Government has ignored a number of crucial recommendations from the original Committee on Radioactive Waste Management. It has adopted deep geological disposal without the additional work the committee recommended.
The Government also ignored CoRWM's strong recommendations that any additional wastes from a programme of new builds should be subject to a new process, not just dumped onto its proposals for dealing with only the legacy wastes from existing sites. CoRWM said there were significant practical issues including the size of any facility, whether more than one might be needed, and how these issues might effect the site location.
Members of the newly reformed CoRWM have also expressed concerns about the Government's proposals to add new wastes to the plans for dealing with legacy wastes and have supported the recommendations of their predecessors.
There would be the time to answer some of the outstanding issues if the Government had either begun planning earlier, or was not in such a haste to encourage energy companies to build new reactors. The Government says it plans to give operators a fixed unit price possibly as early as the end of 2009. In that timetable there is no chance of the Government or the Nuclear Decommissioning Authority being able to answer the outstanding issues detailed above
The uncertainties surrounding the provision of a geological waste repository create another potential financial burden for the public. If the Government fails to provide a repository by the date agreed with the operators of any new reactors then it agrees to take over ownership and liability for the spent fuel stored on-site by operators. We have the prospect, therefore, of the public having to maintain waste stores at reactor sites.
A study of the BERR proposals leads the Council to the conclusion that public finances are being put at risk in order to provide a fixed upper price those operators will be expected to pay. Despite the promises that no subsidies will be given for new reactors, it seems the only way the Government can persuade energy companies to support its policy is by shifting the burden of financial risk from reactor operators to the public purse.
The Council believes it is the public that needs fixed assurances about its liabilities - not the operators - and any risks should be borne by the commercial interests - not the public.
On top of all the doubts and uncertainties already presented in this submission, there is in addition the whole issue of the UK's waste management policy. The Council does not believe the waste problem has been 'solved' - a Government prerequisite before any new builds could be considered.
Finally the Council has no objection to this response being published.
Yours faithfully,
John Mouat
Environmental Liaison Officer