United Kingdom (part2)31 March 1998
With the privatisation of the electricity supply industry, including some of the nuclear reactors, a new competitive climate has been introduced. The nuclear operators have responded well to the challenge and last year nuclear accounted for over 28% of electricity supplied.
AEA Technology plc began as the commercial division the UKAEA. It was legally separated from the UKAEA in March 1996 as a publicly-owned company AEA Technology plc and was floated on the London Stock Exchange in September 1996. The transfer involved the negotiation of some 100 leases for sites owned by the UKAEA. The activities of the company are now almost equally split between nuclear and non-nuclear work. It employs some 3700 people at 26 locations, with the UK, the United States and Japan being the most important centres. Some 84% are shareholders.
In the year to the end of March 1997, AEA Technology had a turnover of £264.1 million and produced an operating profit of £24.1 million. The contribution to turnover of different customer groups was UK government 38%, UK public sector 9%, UK private sector 26%, and overseas 27%. AEA Technology states that it is seeking to expand in markets it knows well “by developing long-term partnerships with customers and suppliers, by acquisitions and by bringing new technologies to the market – turning science into profit”.
NNC Ltd was set up in 1973 as a private limited company whose shareholders were the UKAEA, GEC, and British Nuclear Associates (representing companies engaged in the nuclear construction industry). It was involved in the design and construction of most of the UK’s operating nuclear power plants. It became a wholly-owned subsidiary of the GEC in 1988 and is now a project management and technical consultancy company, within the GEC Marine group of companies, operating in both the nuclear and non-nuclear sectors. It is part of the European Nuclear Assistance Corporation and has helped set up project management units (PMUs) at several Russian nuclear power stations. It employs some 1000 staff at its headquarters at Knutsford, Cheshire, and at its manufacturing and technology centre at Risley, Cheshire.
Rolls-Royce Nuclear Engineering Services Ltd, which supplies high-integrity nuclear plant and outage, refurbishment and decommissioning services, is part of Rolls-Royce Nuclear Engineering and a sister company of Rolls-Royce and Associates, the design authority for the UK’s naval PWR programme. Among the other 75 members of the British Nuclear Industry Forum are such international names as Darchem Engineering Ltd, GEC Althsom Engineering Services Ltd, Gravatom Engineering Systems Ltd, Hopkinson’s Ltd, Simon Carves Ltd, Strachan & Henshaw Ltd, and The RTZ Corporation plc, etc.
No single authority has overall responsibility for nuclear energy in the UK. The government departments principally involved are the Department of Trade and Industry (DTI) and the Department of the Environment, Transport and the Regions (DETR), but they share their powers with other departments, such as the Ministry of Agriculture, Fisheries and Food and the Scottish Office, where appropriate.
Legislation on nuclear energy goes back to 1946. Today the construction and operation of nuclear installations in the UK is governed by the Nuclear Installations Act 1965 and the Nuclear Installation Regulations 1971 made under the Act, while the protection of those working in such installations is covered by the Health and Safety at Work etc Act 1974. The legal regime is complemented by the Ionising Radiation Regulations 1985, which provide protection from ionising radiations for workers in all industries. The main principle behind UK safety law is that risks to workers and the public should be reduced as far as reasonably practicable.
A site licence is needed before a commercial nuclear installation can be built and operated. It may be granted only to a corporate body. The licensing authority is the Health and Safety Executive (HSE), an independent body, which is the executive arm of the Health and Safety Commission (HSC). The HSC/HSE advise mainly the Secretary of State for the Environment, Transport and the Regions on health and safety matters generally, but on nuclear safety matters they also advise the Secretary of State for Trade and Industry (England and Wales) and the Secretary of State for Scotland. The HSC consists of a chairman and not less than six members, all appointed by the Secretary of State for the Environment, Transport and the Regions. The HSE is managed by a director general, who is appointed by the Commission with the approval of the Secretary of State, and two members, who are similarly appointed after consultation with the director general.
The Nuclear Safety Advisory Committee (NuSAC), formerly the Advisory Committee on the Safety of Nuclear Installations (ACSNI), is an independent body formed in 1977 that advises the HSC and appropriate Secretaries of State on major matters of nuclear safety policy. It consists of a chairman and 20 members drawn from academic, scientific and industrial circles, who are assisted by expert assessors from the nuclear industry. The secretariat for NuSAC is provided from the HSE’s Safety Policy Directorate (STD).
The HSE’s nuclear licensing function is administered by its Nuclear Safety Directorate (NSD), which has offices in London and Bootle, Merseyside. The director of the NSD is also designated HM Chief Inspector of Nuclear Installations. The NSD has three divisions, each headed by a deputy chief inspector. One deals with strategy and administration and works closely on nuclear policy with the STD; the other two deal with operational assessment and inspection. The Nuclear Installations Inspectorate (NII), which is now part of the NSD, was set up in April 1960 under the then Ministry of Power, but it has been within the HSE since January 1975. It is responsible for enforcing nuclear licensing at nuclear sites operating commercially in the UK. The NSD has a staff of around 250. Some 60% are qualified technically to honours degree level, and most of these will have had 10 or more years experience in the nuclear industry before joining NSD.
The NII, acting for the HSE independently of any government department, decides what safety standards are acceptable to deal with the potential risks at nuclear sites, but it does not prescribe detailed standards or codes of practices, nor does it formally approve those it expects licensees to use. Under the legislation, the responsibility and liability for the safe operation of a nuclear installation is placed squarely on the operator. A site licence is therefore, in general, enabling rather than prescriptive. The NII has, however, developed and published Safety Assessment Principles for Nuclear Installations (1992) for the use of its staff and for the guidance of operators. These principles give NII’s views on what is achievable and set out the requirements for assessing the safety of designs proposed by operators. They reflect the views of the HSE given in Tolerability of risks from nuclear plants (1992).
Applicants for a nuclear site licence are therefore required to formulate their own design safety criteria and standards, and the arrangements that will be used in the construction, commissioning and operation of the proposed plant. Applicants have to demonstrate that they have gone “as far as is reasonably practicable” in the interests of safety and they must show that they have the resources to manage the site and deal with any liabilities remaining when the site is finally shut down. The onus is always on the applicant to do better by taking account of experience and developments in technology and analysis techniques, and the safety case must include a risk analysis. This self-regulating regime requires strong and semi-independent safety teams to be maintained by the licensees.
The NII has developed a standard form of licence for all nuclear sites, but each licence is specific to one site and licensee. The NII grants a licence when it is satisfied with the licensee’s viability and organisational arrangements, the design concept and the safety principles. However, the safety case remains under review during the time the plant is being built. Attached to the licence are two schedules: the first describes the site and the installation; the second contains a number of conditions (typically 35) which enable the NNI to regulate safety on the site during construction, operation and decommissioning, while also ensuring that responsibility for safety rests entirely with the licensee.
The licence conditions can be amended or revoked at any time. The NII can call in for approval any of the arrangements that the licensee makes to meet the conditions of the licence and, once approved, the arrangements cannot be changed without further approval from the NII. In addition, the NII takes powers through the licence conditions to specify “hold-points”, such as pouring concrete for the foundations, stages in commissioning, and startup after a statutory shutdown, at which consent from the Inspectorate is needed to proceed. The NII can also direct a licensee to take certain actions.
The licensee is required to establish an advisory Nuclear Safety Committee, including independent members, and is encouraged to set up a local liaison committee, including members of the public. The HSE’s power to revoke a licence at an operating site has not so far been used. Inspectors have, however, initiated prosecutions (eg, following the dropped grab event at Wylfa power station in 1993) and issued improvement notices. In practice, the NII’s main sanction is its ability to withhold consent to start up or restart up after an outage until it is satisfied that its requirements for remedial action have been met.
In the late 1970s the NII requested licensees to embark on a phased programme of comprehensive safety reviews of the first Magnox reactors, which had been designed for a life of 20 to 25 years. These Long-term Safety Reviews (LTSRs), aimed at justifying an operational life up to 30 years (33 years in the case of Wylfa), have been completed for all the operating Magnox units. In the meantime, the standard site licence introduced in 1990 included a formal requirement “to carry out a periodic and systematic review and assessment of safety cases”. The period between reviews is not specified in the licence but, in practice, the parties have agreed that, in line with good international practice, the Periodic Safety Reviews (PSRs) should be performed at roughly 10-year intervals. All the operating Magnox units have now been cleared for operation beyond 30 years and the two oldest, Chapelcross and Calder Hall, have been cleared for operation beyond 40 years. The oldest AGRs, at Hinkley Point B and Hunterston B, have been cleared for operation beyond 20 years.
In the run up to privatisation in April 1996, the nuclear companies had to re-apply for site licences, and where sites, such as Hinkley Point and Sizewell, are now shared between two companies, physical segregation of the site has been required by the NII. The integration of Magnox Electric into BNFL will also involve BNFL reapplying for licences for the former Magnox Electric sites.
The ACSNI, as NuSAC then was, had serious concerns about the impact on safety of the changes in the structure of the privatised nuclear power companies, and it took until the end of 1996 before it was content that “the new licensees remained committed to safety and had adequate arrangements in place to ensure they managed their operations safely”. The Committee says in its latest annual report that it “will continue to monitor closely how the arrangements have operated, particularly in the climate of continued pressure to make efficiency gains and cut costs”, and with the growing use of contractors. It is also monitoring the effect of new commercial pressures on the safety performance of BNFL and the UKAEA.
The direct cost of the NII’s work is fully funded by charges on the licensees. The Commission’s other activities are funded by the Treasury via the DETR. The nuclear licensees are charged a share of the cost of research programmes undertaken and the HSE and the licensees work together to identify which key research capabilities, such as those on gas reactors, need to be maintained within the UK.
The NII deals with health and safety matters only in so far as they arise from nuclear processes on the site, but it works closely with other government enforcement agencies, such as the Environment Agency, on such things as external discharges. In addition, the Secretary of State for Industry or the Secretary of State for Scotland must be informed within 24 hours of the occurrence of certain types of incidents at nuclear sites. A list of these incidents is published quarterly by the HSE. Normal planning laws apply to nuclear installations and the building of a power station above 50MWe requires the consent of the Secretary of State for Trade and Industry. The Secretary of State is obliged to hold a public inquiry if the local authority lodges an objection to the project. Public inquiries into nuclear power stations in the UK have been marathon events: that for Sizewell B lasted 336 days.
The National Radiological Protection Board was established under the Radiological Protection Act 1970 and its functions were extended in 1974 to cover the dangers of non-ionising as well as ionising radiation. It is based at Chilton, Didcot, Oxfordshire, and has centres in Leeds and Glasgow. The chairman and members of the board are appointed by the Secretary of State for Health. The board is financed by charges for its services and funds voted by parliament. The board has a statutory responsibility to provide advice on radiological protection, and it also offers technical services to users of radioactive materials and sponsors research.
Contracts for fuel
There are no commercially exploitable deposits of uranium ore in the UK. Each of the nuclear utilities now acts independently in meeting its requirements for uranium. Magnox Electric and Nuclear Electric buy on long-term contracts from uranium suppliers in several countries, and Nuclear Electric makes occasional purchases on the spot market. They maintain stocks which require purchases of 650 te/y by Magnox Electric and 1400 te/y by Nuclear Electric. Scottish Electric obtains its uranium from BNFL as part of a packaged deal on fuel supplies. The utilities also make use of depleted uranium they own as a by- product of reprocessing.
Following privatisation, the nuclear utilities withdrew from their previous involvement in overseas uranium exploration and mining operations. The interests that Nuclear Electric and Scottish Electric had in Power Resources Inc, which operates the Highland mine in Wyoming, USA, Central Electricity Generating Board Exploration (Canada) Ltd and Central Electricity Generating Board (America) Ltd were first transferred to Magnox Electric, who then sold the first two to Cameco Corporation for £62 million. Magnox Electric still owns CEGB Exploration (America), but the company is not active. The British Civil Uranium Procurement Organisation, which operated within the old CEGB, no longer exists.
With the exception of the supply of uranium and enrichment, fuel cycle services for the British nuclear programme have traditionally been provided by BNFL. Over recent years, earlier cost-plus contracts have been renegotiated as fixed-price contracts. In June 1997 British Energy concluded new fixed-price contracts (with RPI indexation) with BNFL that updated and extended those previously concluded by Nuclear Electric and Scottish Nuclear. British Energy now has contracts with BNFL for fuel fabrication services for its 14 AGRs up to 2006, with a facility for extension, and for reprocessing and storage services for all spent fuel arisings from these reactors for the remainder of their lives. Scottish Nuclear dropped plans to build its own dry store in 1995.
Where it is not tied to BNFL for technical reasons, as with the fabrication and reprocessing of AGR fuel, Nuclear Electric now seeks the best deals it can get on the world market. These includes enrichment services, obtained from Urenco and Russia, and fuel for the Sizewell PWR. The contract for the initial charge for Sizewell, which was put out to international tender, was won by BNFL. Last year Nuclear Electric, after announcing that it would exercise the option to buy the third reload from BNFL, concluded a contract with Siemens to supply three reloads, starting in 2000.
As indicated by the above contracts, British Energy’s policy for the AGRs is to send the spent fuel for reprocessing and/or long-term storage, with eventual disposal of the resulting waste products. With the Sizewell PWR the policy is to store the spent fuel in the station ponds (there is capacity for 18 years), followed by dry storage and direct disposal of the fuel. Magnox Electric sends spent fuel to BNFL for reprocessing and long-term storage and disposal of the resulting waste. It has a dry store for Magnox spent fuel at Wylfa power station.
British Nuclear Fuels Ltd (BNFL) was created out of the former Production Group of the UKAEA in 1971 and it became a public company in 1984. It is responsible to the Secretary of State for Trade and Industry, who holds all the shares. In 1996/97 the company had a turnover of £1262 million compared with a record £1549 million in the previous year. The shortfall was mainly due to the temporary closure of the Magnox reprocessing plant for refurbishing. It was largely made up by an on-going cost-reduction programme and the pursuit of new commercial opportunities. The result was a pre-tax profit of £216 million and a dividend of £46 million was paid to the single shareholder. BNFL is the UK’s fastest growing major exporter. Export earnings were £422 million in 1996/97 and the company aims to double this figure in the years ahead. The company finances its expansion and investment programmes from profits and advance payments from customers. Additional funding is obtained on the money market. BNFL loans are guaranteed by the government. The company has recently been enlarged by integration with Magnox Electric (see above).
The company is managed by a board of 11 directors, the chairman and chief executive being appointed by the Secretary of State for Trade and Industry. It provides a full range of nuclear fuel cycle services from uranium procurement to decommissioning to customers in the UK and abroad. In the past six years it has invested nearly £6000 million at its six sites and it spends some £76 million a year on research and technology. It employs some 13 000 people. In 1996 the board initiated a fundamental strategic review called “Beyond 2000”, aimed at “setting a clear context for future decision making throughout the company”.
An initial result of the review has been the reorganisation of the company. It now consists of a small head office, including central service departments, at Risley, Cheshire, four business groups (Thorp (spent fuel management), Magnox, Fuel, and Waste Management and Decommissioning), and BNFL Inc, a wholly-owned subsidiary operating in the USA. There are overseas offices in Brussels, Tokyo, Seoul and Beijing and subsidiary companies in Frankfurt, Germany (BNFL Deutschland), and Paris, France (BNFL SA) and Washington DC (BNFL Inc). One of the central service departments is Research and Technology, which in support of the business groups has set up a Development Centre at Springfields, the Product Development Centre at Capenhurst and the Technology Centre at Sellafield.
The main function of the Thorp Business Group is the operation of the £1.8 billion Thorp reprocessing plant at Sellafield and the marketing of its services. The plant, which received final regulatory consent to operate in August 1997, reprocessed over 800 t of fuel while being commissioning. The expectation is that it will achieve a throughput of 900 t/y from next year and meet its target to reproduce 7000 t of fuel in its first 10 years of operation. Thorp has over 15 years’ worth of orders valued at £12 billion, two thirds from overseas, and it is expected to make a profit of at least £500 million in its first 10 years. The Thorp Group is responsible for the Sellafield Mixed Oxide (MOX) Fuel Plant (SMP) situated alongside Thorp. This is now ready to operate and is awaiting final regulatory approval. In the meantime the MOX Demonstration Facility, also at Sellafield, which has supplied fuel to reactors in Switzerland and Germany, continues in operation.
The Thorp Group is responsible for the transport of spent fuel and the products of reprocessing, including vitrified waste. The work is performed by the wholly-own subsidiaries BNFL SA (formerly Nuclear Transport Ltd) and Direct Rail Services, which operates between Sellafield and BNFL’s purpose-built terminal at Barrow-in-Furness in Cumbria; and by Pacific Nuclear Transport Ltd (in which BNFL has a 62.5% shareholding through its wholly-owned subsidiary International Nuclear Fuels Ltd (INFL)). BNFL Interim Storage Ltd markets flasks for the interim storage of spent fuel and high level waste.
The Magnox Business Group embodies the Magnox reprocessing plants at Sellafield, the Calder Hall and Chapelcross reactors and the provision of services to the entire Sellafield site. The Magnox reprocessing plant is now back in operation after an eight months shutdown last year for a major refurbishment. A new plutonium oxide store has been commissioned. BNFL has joined with Scottish Hydro Electric in Fellside Heat and Power, which operates a 168 MWe combined heat and power plant at Sellafield to provide steam and electricity to the site and electricity to the grid. With the integration of Magnox Electric into BNFL, the Magnox Business Group will later this year become the Magnox Generation Group (see above).
The Fuel Business Group’s activities are concentrated on the Springfields site, near Preston northwest England. The new £200 million Oxide Fuels Complex (OFC) came into full operation in 1996. The plant produces powder, pellets and fuel for AGRs and LWRs. The group is developing VVER fuel under contract to a consortium of Finnish and Hungarian utilities. There is also a Magnox fuel fabrication plant. The group includes the wholly-owned Uranium Asset Management Company Ltd, which was launched in 1996 to support the uranium procurement activities associated with the Scottish Nuclear fuel supply contracts. Following the transfer of enrichment activities to Urenco, which began in 1993, the group is now responsible for BNFL’s 39.5% shareholding (through INFL) in Urenco.
The Waste Management and Decomm-issioning Group is responsible for the treatment of the current waste arisings and the accumulated historic backlog of waste at the Sellafield site, and is involved in contract work at other non-BNFL sites. New installations at Sellafield include the Waste Treatment Complex, for plutonium contaminated waste. At Capenhurst the group has effectively completed the £100 million project to decommission the old diffusion enrichment plant. The work here has resulted in the launch of a significant new business in metals recycling. It is considered an attractive alternative to land burial.
Two wholly-owned subsidiary companies, BNFL Engineering Ltd and BNFL Instruments Ltd, operate within the group. BNFL Engineering, with headquarters at Salford Quays, Manchester, provides project management and other services to BNFL and outside customers. An important aim is to generate income from non-fuel cycle business. Projects recently completed or under construction include the second Encapsulated Product Store, the third operating line for the Vitrification plant, the MOX Fuel Plant, the Technology Centre and the Drypac plant all at Sellafield, and the Product Development Centre at Capenhurst. It has supported BNFL Inc in winning contracts in the United States. New orders in 1996 and 1997 exceeded £30 million. BNFL Instruments, based at Sellafield, is responsible for the development, manufacture and marketing of advanced radiometric and related systems and services.
BNFL Inc, with headquarters in Washington DC, now has an order book of some $2 billion. It has won several US Department of Energy Contracts for waste management and decommissioning activities. It is part of a consortium, Canadian Nuclear Projects Ltd, with the Canadian firms Acres International, Wardrop Engineering and SENES, that is negotiating to commercialise and run the former Whiteshell laboratories of AECL.
Urenco Ltd, the holding company of the Urenco group, is based at Marlow, Bucks. It is responsible for the central marketing and contract administration of uranium enrichment services. The Urenco centrifuge enrichment facility at Capenhurst accounts for about a third of group production.
The government’s overall responsibility for the management of radioactive waste is exercised through the Secretary of State for the Environment, Transport and the Regions, and the Secretaries of State for Scotland and Wales. Since 1978 they have been advised by the Radioactive Waste Management Advisory Committee (RWMAC), which consists of independent scientists, representatives from trade unions, and experts from the nuclear industry and other disciplines. The members are appointed by the Secretaries of State. The Environment Agencies in England and Wales and Scotland, the Ministry of Agriculture, Fisheries and Food and the NII are also involved in various aspects of waste disposal.
The current government policy is that the polluters pay and that the nuclear industry should be responsible for developing and implementing its own waste strategies, including undertaking its own research. The low, intermediate and high-level wastes from reprocessing are managed by BNFL, but the utilities have the ultimate responsibility for their disposal. The UKAEA also has responsibility for managing high-level and other wastes on its sites. At present, LLW waste continues to be sent to BNFL’s facility at Drigg, Cumbria. Most of the ILW (61%) is stored at Sellafield and the rest in dedicated facilities on UKAEA sites and at power stations. Drigg, which has recently been refurbished at a cost of £21 million, is expected to have the capacity for LLW arisings well into the next century.
Government policy, as set out in the 1995 White Paper Review of Radioactive Waste management Policy: The final conclusions, and since reaffirmed, is that the preferred route for LLW and ILW is a deep geological repository. In January 1997 the Environment Agency published a guidance document: Disposal Facilities on Land for Low and Intermediate Level Radioactive Wastes: Guidance on Requirements for Authorisation.
The Nuclear Industry Radioactive Waste Executive was formed in 1982 and incorporated as a private company – United Kingdom Nirex Ltd – in 1985 to provide and manage services for the safe disposal of solid ILW and LLW produced by its shareholders (BNFL, UKAEA, Nuclear Electric and Scottish Nuclear) and other UK users of radioactive materials. Nirex is based at Harwell and it is financed by its shareholders in proportion to the waste each expects to dispose of. The Ministry of Defence also makes payments. The Secretary of State for Trade and Industry holds a special share in Nirex, which gives the right to appoint two directors to the Nirex board.
After several years of investigation, Nirex narrowed its search for a possible site for a deep rock repository to an area near Sellafield and following a programme of borehole testing application was made to build a Rock Characterisation Facility (RCF), or underground laboratory. The planning application for this was turned down by the local council in December 1994 and in March last year after a public inquiry the then Secretary of State for the Environment rejected Nirex’s appeal on technical and environmental grounds. There were also objections from the Irish government. Nirex had been so confident of being granted permission to proceed that it had placed contracts for shaft sinking and site works.
The Secretary of State’s decision to reject Nirex’s proposal for an RCF has left Nirex gridlocked with little to do except re-examine the results of earlier work and meet its obligation to clean up the site (by August 2000). The legal implications of the public inquiry make it impracticable for Nirex to start searching for a new site. At the end of last year, the House of Lords Select Committee on Science and Technology announced that it was to undertake a new inquiry into the management of nuclear waste in the UK. It is concerned by the failure to adopt a national strategy for managing radwaste that is both scientifically sound and acceptable to the public. The government still believes that underground disposal is the best option but it is unlikely to move to resolve the problems faced by Nirex until after the Lord’s committee reports, when it may publish a new consultancy paper.
Nirex, in conjunction with DETR, prepares the UK Radioactive Waste Inventory. This covers both wastes in stock and forecasts of future arisings. It has also developed specifications and design guide lines for a standard range of waste packaging.