Environment Minister announces further public consultation (11 June
SELLAFIELD'S MOX PLANT
Responses requested by 23 July 1999
John Prescott, Britains 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
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
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
Copies of the MOX documents being issued by DETR
are available on the web site at:
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
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
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
Consultation On The Economic Case For The Sellafield
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
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
Views on these documents are invited by no later
than 23 July 1999.
Respondents should send their comments to:
The Sellafield MOX Plant Consultation
Radioactive Substances Division
Department of the Environment, Transport and the Regions
London SW1E 6DE
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.
- Copies of these documents will also be
made available on the internet at www.defra.gov.uk/environment/radioactivity/ras/index.htm
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.
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.
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
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.
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
"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
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
- 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.
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
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
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.
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
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)
The Ministers agree that this distinction
is appropriate, and their decision on uranium commissioning is contained
in a separate document.
The Ministers invite further public consultation
- 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:
||Letter of Intent /
Reservation of Capacity
|% of BNFL
Published 25 June 1999