Head of Service: Iain McDiarmid
Executive Director: Graham Spall
Guidance Consultation,
Nuclear Unit,
Department for Business,
Enterprise and Regulatory Reform,
Bay 125,
1 Victoria Street,
London
SW1H 0ET
Planning
Infrastructure Services Department
Grantfield
Lerwick
Shetland
ZE1 0NT
Telephone: 01595 744800
Fax: 01595 744804
Infrastructure@shetland.gov.uk
www.shetland.gov.uk
If calling please ask for
John Mouat
Direct Dial: 01595 744826
Email: DecomGuidance@berr.gsi.gov.uk
Our Ref: JM/MR/EL30
Your Ref:
Date:
16 May 2008
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