November 2001

British Energy to End Reprocessing at Sellafield

Three articles from Sunday Time, The Observer and Independent on Sunday, November 11, 2001

[Posted 12/11/2001]

  1. British Energy calls end to nuclear waste reprocessing, by Mark McSherry, Scottish Financial Editor
  2. OFT threat in nuclear reprocessing dispute, by Oliver Morgan, Industrial Editor
  3. Nuclear chiefs risk Sellafield's future, by Geoffrey Lean, Environment Correspondent

British Energy calls end to nuclear waste reprocessing

Sunday Times, November 11, 2001 (SCOTLAND)
By Mark McSherry, Scottish Financial Editor

BRITAIN'S biggest nuclear power generator has told the government it intends to stop sending its nuclear waste for reprocessing.

British Energy says it wants to dispose of its spent nuclear fuel by storing it at its nuclear power stations around the UK for 20 years, while radioactivity decreases, before sending it to an underground repository.

The East Kilbride-based company produces about 25% of the UK's electricity, and its British nuclear plants are at Torness and Hunterston in Scotland and Hartlepool, Sizewell, Bradwell, Dungeness and Hinkley Point in England. It also runs plants in the US and Canada.

Despite having reprocessing contracts with BNFL until 2006, British Energy revealed it has already stopped sending fuel from Sizewell B nuclear power station.

Robin Jeffrey, British Energy's executive chairman, warned the company could move from Scotland to the US if its UK activities could not become profitable. The move is a major challenge to the government's waste disposal policy.

Westminster and the nuclear industry face enormous problems convincing the public that long-term storage is safe. Four years ago a plan to build a depository at Sellafield in Cumbria was rejected, and the announcement of other potential dumps around the country created uproar.

British Energy's plan will add to the pressure on Michael Meacher, the environment minister, to come up with a solution. Last week The Sunday Times revealed that a government review of energy policy concluded up to 15 new nuclear power stations were required.

Jeffrey said on-site storage methods were already used at its North American nuclear stations as they are seven times cheaper than reprocessing.

"It is our view that reprocessing is a very, very expensive method of dealing with spent fuel," said Jeffrey. "The cost of reprocessing in the UK is £5 per megawatt hour, compared with 70p for direct disposal in the United States. When we were government-owned, we signed a contract with BNFL [to reprocess at Sellafield]. Now what we are saying is we can't afford it."

The company says since it signed its BNFL contracts, electricity prices for consumers had fallen by 30% and the cost of spent fuel management had risen 11%.

Jeffrey claimed direct disposal was environmentally superior to reprocessing because it did not result in plutonium stockpiles.

The British Energy chairman said the main reason the UK previously chose the reprocessing option was an earlier intention by the nuclear industry to create "fast-breeder" reactors which could use the plutonium, a plan that had now been largely abandoned by the industry.

Roger Higman, energy campaigner at pressure group Friends of the Earth, said, "Robin Jeffery is right to say reprocessing is an expensive waste of money, but he is wrong to say you could stick it in a dump. This shows the nuclear industry doesn't have a strategy to deal with its waste."


OFT threat in nuclear reprocessing dispute

The Observer, November 11, 2001
By Oliver Morgan, Industrial Editor

Nuclear generator British Energy plans to take atomic services group British Nuclear Fuels to the Office of Fair Trading in a dispute over £300-million-a-year reprocessing contracts. The companies have been wrangling over the contracts for the past year; they involve BE paying BNFL upfront for future costs of reprocessing spent uranium fuel from its eight UK nuclear power stations in the Thorp plant at Sellafield in Cumbria.

Executive Chairman Robin Jeffrey told The Observer that BE saw reprocessing the fuel as unnecessary, and that the system used in the US, where fuel is stored in readiness for disposal in a purpose-built site, would be a cheaper, more suitable option for the UK.

Such a move would be fatal to BNFL's reprocessing operations. BE is among its major customers, but its victory would have a knock-on effect on others, particularly in Japan, where confidence in BNFL was damaged after a scandal over falsification of quality-control records on reprocessed plutonium fuel.

Under the US system, nuclear generators pay the US government a fixed charge - $1 for every megawatt hour of electricity they produce - and this money is used to fund the construction of a long-term storage facility.

Jeffrey calculates that such a system in Britain would save his company £250m a year and convert its lossmaking position into profit. Last week BE unveiled a half-year loss of £110m on its UK operations, due mainly to the fall in wholesale electricity prices.

Jeffrey said BE had raised the issue of the US alternative with BNFL in negotiations over the current contracts, which date back to when BE was privatised in 1996.

He said: 'BNFL are not interested in negotiation. [OFT referral] would be a last resort, but it is something we would be forced to do. We would go to the OFT and ask why we should have to pay these huge costs when there is an alternative approach?'

BE is hoping that measures to restructure the contracts will be addressed in the Government's energy review.


Nuclear chiefs risk Sellafield's future

Independent on Sunday, November 11, 2001
By Geoffrey Lean, Environment Correspondent

11 November 2001 Britain's nuclear industry is preparing a devastating triple blow against the Government-owned firm that runs Sellafield, endangering its future.

British Energy, which generates most of the country's nuclear power, is deeply frustrated by the incompetence, intransigence and notoriety of British Nuclear Fuels Ltd. The energy firm is also angry at the high prices it is forced to pay BNFL.

Now it is preparing to develop Canadian nuclear reactors for Britain, to try to safeguard the future of atomic power in this country and to free itself from BNFL, which owns the controversial nuclear complex in Cumbria.

In a little-noticed move earlier this month, it signed a joint agreement with a firm owned by the Canadian government, to examine its Candu nuclear reactor as a potential for Britain. British Energy chiefs are enthusiastic about the reactors, which they are convinced are cheaper, safer and produce less nuclear waste than the three designs in use in Britain - and would create thousands of jobs. If, as seems increasingly likely, British Energy opts for these reactors, it will land a potentially fatal double blow to BNFL's already dubious financial viability and to the Government's plans to privatise it.

First, BNFL owns the only other reactor design - a pressurised water reactor - that British Energy believes could be viable for UK power stations. A deal on Candu reactors would be bound to damage BNFL sales. Second, it would not be able to sell British Energy fuel for the new reactors, as it does for its present ones; this would come from Canada. Finally, British Energy would not send used fuel from the new reactors to be reprocessed at Sellafield.

British Energy despairs at the price it has to pay BNFL to reprocess fuel - said to be six times as much as demanded for disposal of the fuel in other countries, and at an extra cost of £250m a year.

Robin Jeffrey, British Energy's executive chairman, told The Independent on Sunday that its UK nuclear power stations were operating at a loss because they were "crippled by reprocessing costs".

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