July 1999

British Environment Minister announces further public consultation (11 June 1999)

SELLAFIELD'S MOX PLANT

Responses requested by 23 July 1999

[Posted 09/07/1999]

John Prescott, Britain’s Deputy Prime Minister -who is also responsible for environment policy-has told the British Parliament that he and the Minister for Agriculture, Fisheries and Food, Nick Brown are inviting comments on further information about the economic case for BNFL's Mixed Oxide Reprocessing Plant (MOX) at Sellafield.

Their provisional view, at present, is that full operation of BNFL's Mixed Oxide Plant would be justified, but a final decision will depend on the outcome of further consultation. On that basis they have also approved the testing of the plant with uranium.

DETR and MAFF are also publishing a report prepared by PA Consulting on the economic case for the plant. This is a fuller version of the report published in January 1998 by the Environment Agency. An up-dated assessment of the market for MOX fuel prepared by BNFL is also published.

In their joint decision, Mr Prescott and Mr Brown have accepted the view of the Environment Agency's-the primary regulator -that the testing of the MOX plant with uranium is justified. Both are satisfied the environmental effects would be negligible.

A final decision on further testing with plutonium and the full operation of the plant will be made in the light of the responses to the consultations on the economic case for the plant.

In Answer to a Parliamentary Question from Labour Eric Clarke,

Mr Prescott said:

"The Minister of Agriculture, Fisheries and Food (MAFF) and I have looked very carefully at the recommendations made by the Environment Agency about the justification for the MOX plant. We have also examined the representations made to us about the plant. Our provisional conclusion is that the balance of the argument so far is in favour of justification.

"However, we have also come to the conclusion that there should be further consultations on the economic case for the plant. We were concerned that the version of the report by PA Consulting on the economic case for the plant, which had been published by the Agency in January last year, did not contain as much information as the public could reasonably expect to see. We have, therefore decided to publish a fuller version of the report. We accept, however, that somematerial contained in the report is commercially confidential and cannot be published without potentially harming BNFL's commercial interests. This information has been omitted from the version we are publishing.

"In view of the time that has passed since PA Consulting completed their report, we decided to commission from BNFL an up-to-date -assessment of the market for MOX fuel. This assessment is also being published. Comments are being invited on this material by 23 July after which we shall take a final decision on the full operation of the plant.

"While this consultation is under way, and given our view that the balance of the argument currently favours justification we have concluded that it would be right for BNFL to be allowed to proceed with the uranium commissioning of the plant. We concluded that it would be right to allow this before final conclusions are reached about whether to give the go-ahead for the full operation of the plant. This would enable BNFL to begin testing the plant before the introduction of plutonium.

"In this way, if the plant is eventually given the go-ahead, the delays in running the plant commercially would be minimised. If, after the consultation exercise we decide that full operation is not justified, the process would be halted and uranium removed from the plant. The costs of removal, estimated at #2 million, would be met by BNFL.

Copies of the MOX documents being issued by DETR are available on the web site at:

http://www.defra.gov.uk/environment/consult/mox/

 Further Information Note

The MOX plant at Sellafield has been built at a cost of #300 million.

Its purpose is to manufacture a mixed oxide fuel for use in nuclear power stations. The fuel is to be made from material separated from spent fuel reprocessed at the THORP plant at Sellafield.Before the plant can start operations it needs to pass a test of "justification" required by European law:

that is the economic benefits of operating the plant need to outweigh any environmental orother detriments. BNFL initially applied to the Environment Agency inNovember 1996 for approval to operate the plant. The Environment Agency, after two rounds of public consultations, concluded their consideration of the application in October 1998.

They published draft decisions at that time that uranium commissioning, plutonium commissioning and the full operation of the plant should be given the go-ahead. The matters were referred to the Deputy Prime Minister and the Minister of Agriculture, Fisheries and Food in November 1998 because of their statutory responsibility to consider requests that had been made to them to decide the application themselves.

DETR and MAFF made available on their web site on 25 June the following documents:

A version of a report by PA Consulting of December 1997 setting out their views on the economic case for the plant. This version has a limited amount of commercially confidential information omitted, but is a fuller version of the report than that included as part of the Environment Agency's consultations in January 1998.

A statement by BNFL giving an up-to-date assessment of the market for MOX fuel.

A document setting out the Deputy Prime Minister's and the Minister of Agriculture, Fisheries and Food's decision on the uranium commissioning of the MOX plant. This essentially is that the two Ministers have decided not to exercise their statutory powers in relation to uranium commissioning. The Agency will be free, therefore, to implement their draft decision of October 1998.

A document explaining Ministers"reasons for undertaking a round of public consultations on the economic case for the plant and giving information about where comments should be sent.

This package of material has been sent to all those who made representations about the plant either to the two Ministers or to theEnvironment Agency.

The two Ministers will carefully consider all representations made tothem and will aim to reach a decision on the full operation of the plant as soon as possible after the conclusion of the consultation period.

Submissions made from outside Britain will be given particular attention

BNFL have submitted applications to vary some of the radioactive discharge limits at Sellafield. The Environment Agency published draft decisions at the same time as the ones about the MOX plant and these applications were also referred to the two Ministers. They are still considering these issues.

# = pounds sterling

Some further details
Department of the Environment,
Transport and the Regions
MOX

Consultation On The Economic Case For The Sellafield MOX Plant

Consultation by the Secretary of State for the Environment, Transport and the Regions and the Minister of Agriculture, Fisheries and Food (the Ministers) on the PA Consulting Group report on the economic case for the MOX plant, and updated assessment of the market for MOX fuel

Introduction

  1. This document forms part of the further consultation package issued by the Ministers on the economic case for the Sellafield MOX plant along with:

    - a full version of the PA Consulting report on the economic case for the plant, subject only to exclusion of information in it that would harm BNFL's wider commercial interests or the economic case for the MOX plant itself; and
    - an updated assessment of the market for MOX fuel from BNF

  2. Views on these documents are invited by no later than 23 July 1999.

  3. Respondents should send their comments to:

    The Sellafield MOX Plant Consultation
    Radioactive Substances Division
    Department of the Environment, Transport and the Regions
    4th Floor
    Ashdown House
    Victoria Street
    London SW1E 6DE

  4. The Departments may wish to publish responses to the consultation paper, or to deposit them in the Libraries of the Houses of Parliament or in the Departments' own Libraries, unless specifically requested to treat a response as confidential. Confidential responses may nevertheless be included in any statistical summary of numbers of comments received and views expressed.

  5. Copies of these documents will also be made available on the internet at www.defra.gov.uk/environment/radioactivity/ras/index.htm

    Background

    BNFL's applications

  6. In November 1996 BNFL applied to the Environment Agency (the Agency) for variations to the gaseous and liquid authorisations for the Sellafield site. These applications included information relating to the MOX plant. The Agency requested BNFL to provide the information specifically relating to the MOX plant in a separate package, thereby enabling a public consultation to take place focused on the issues associated with the justification of the MOX plant. BNFL repeated the information already provided, together with further supporting data, in a submission supplied in January 1997.

    Public consultations

  7. To assist in the consideration of the MOX plant application, the Agency undertook a period of consultation over eight weeks in early 1997. Relevant local authorities and public bodies and the wider public were invited to comment on BNFL's proposals. Respondents raised a number of environmental issues and, in addition, some expressed concern about the lack of information provided by BNFL on the economic case for the MOX plant. The Agency agreed with this concern over a lack of information on the economic case. Consequently, the Agency engaged a firm of financial consultants, PA Consulting Group (PA), to carry out an independent assessment of BNFL's economic case for the plant.

  8. PA completed the assessment of BNFL's Reference Economic Case and produced a report of its findings in December 1997. PA's report concluded that the operation of the MOX plant would produce a strong level of operational profit. The Agency then carried out a second round of consultation in early 1998, based on a public domain version of the PA report - which excluded certain material on the grounds of commercial confidentiality - in order to inform the public about the Reference Economic Case. A total of around 100 responses were received for each consultation.
    The Environment Agency's proposed decisions

  9. In October 1998, the Environment Agency notified proposed decisions on the justification of the uranium commissioning, and on the full commissioning and operation of the Sellafield MOX plant; and on the discharge variation applications made by BNFL. These proposed decisions by the Environment Agency have been forwarded to the Secretary of State for the Environment, Transport & the Regions and the Minister of Agriculture, Fisheries and Food for consideration as to whether the Ministers wish to exercise any of their powers of direction under the Radioactive Substances Act 1993 or the Environment Act 1995.

  10. In their proposed decision document the Agency stated that it was:

    "...satisfied that the gaseous, liquid and solid wastes arising from the operation of the MOX plant can be disposed of within the constraints of the existing Sellafield authorisations under RSA93. It is also satisfied that these authorisations meet all national and international standards and legal requirements. The Agency is proposing to apply more restrictive limits for specific radionuclides as a result of variations to the existing authorisations. It is satisfied that the MOX plant can be operated in accordance with these more restrictive limits.

    "Conditions of the authorisations require BNFL to apply best practicable means to limit discharges. The limitations and conditions of the authorisations will effectively protect human health, the safety of the food chain and the environment generally.

    "In reaching its proposed decision, the Agency has not taken any view on the wider policy issues and considers that major developments at Sellafield are national and international matters and that, given the significant political and economic issues, relevant government departments should be involved in considering the Agency's proposed decision.

    "The Agency has weighed the small radiological, and other detriments, against the economic benefit of operating the plant, based on an application made after the capital cost (£300 million) had been incurred. It is of the view that the plutonium commissioning, full operation and decommissioning of the MOX plant is justified for the purpose of manufacturing mixed oxide fuel from plutonium which has been separated from foreign customers' spent fuel in the Thermal Oxide Reprocessing Plant (THORP) and which belongs to them. The Agency's consideration of justification is based on using the MOX plant for this specific purpose only, and any other use would require separate consideration." (Environment Agency proposed decision document, paragraphs 3.1-3.4.)

    The Ministers' decisions

  11. Two particular issues have been raised which lead the Ministers to consider that further consultation would be beneficial:

    - the amount of information excluded from the public domain version of the PA report on the grounds of commercial confidentiality was, the Ministers consider, more than strictly necessary;
    - there have been developments in the potential market for MOX fuel which lead the Ministers to consider that there should be further public examination of BNFL's case as to the business that the plant will attract. BNFL have produced an up-to-date assessment, which has been endorsed by the DTI as BNFL's shareholder, but the views of the public on this will be invited.

  12. The Ministers consider that, in common with all significant decisions in respect of the nuclear industry, the decisions on the MOX plant are contentious and of wide public interest and concern. It is in the interests of all parties that there should be public confidence in the robustness of BNFL's economic case for the MOX plant and in the way that decisions about it are reached.

  13. The Ministers are therefore of the view that it is very much in the public interest that the full PA report should be published, excluding only that material, such as contract prices, whose publication would cause unreasonable damage to BNFL's commercial operations or to the economic case for the MOX plant itself.

  14. The Ministers are concerned that if BNFL fail to win enough business, the costs of commissioning, operating and decommissioning the MOX plant will fall to the taxpayer. In addition to these concerns, since the Environment Agency's recommendation was forwarded to the Ministers, there have been changes abroad which may limit the market for MOX fuel; in particular, the new German Government's policy is to withdraw from nuclear power generation. It now seems uncertain whether the German utilities will enter into any contracts for MOX fuel - although the Ministers note that PA Consulting has re-examined its original business model for the MOX plant and concluded that even complete and uncompensated removal of the forecast demand from Germany would not affect the overall viability of the plant.

  15. Before coming to a final decision on the issue of justification of plutonium commissioning and full operation, the Ministers have required BNFL to provide an up-to date assessment of the market for MOX fuel, including their assurance that they can acquire sufficient business to cover at least the plant's commissioning, operating and decommissioning costs. The Ministers propose that this assessment (and the Department of Trade and Industry's endorsement of it) should be made available for comment in the renewed consultation process.

    Uranium Commissioning

  16. The Ministers have noted that the Agency consider a separate decision can be made on uranium commissioning of the MOX plant because:

    "...unlike plutonium commissioning, (it) is a reversible process because uranium can, if necessary, be removed from the plant at relatively low cost and the detriments associated with plutonium are irrelevant to this phase." (Environment Agency proposed decision document, paragraph 12)

  17. The Ministers agree that this distinction is appropriate, and their decision on uranium commissioning is contained in a separate document.

    Conclusions

  18. The Ministers invite further public consultation on:

    - a fuller version of the PA report, (1) excluding only that information which would harm BNFL's wider commercial interests or the market for the MOX plant itself; and

    - the up to date assessment (by BNFL, endorsed by the DTI) of the market for MOX fuel, which includes an assurance that sufficient business can be secured for the MOX plant to cover its commissioning, operating and decommissioning costs.

1: Details of BNFL's contractual position with the different countries included in the Reference Case have bben excluded from the paragraphs 2.4 and 2.5 of the PA Report on the grounds of commercial confidentiality. However, Ministers are publishing this information below, in the form of totals for all countries, expressed in percentage terms of the BNFL Reference Case:

  Contracted Letter of Intent /
Reservation of Capacity		 Under Offer Forecast Total
% of BNFL
Reference Case
Total		 6.7 11.0 25.7 56.6 100

Published 25 June 1999

Back to contents