NDA sites’ cost rise factors emerge

20 November 2007

Nuclear site cost increases at Dounreay and Sellafield have been outlined following publication of the Nuclear Decommissioning Authority’s (NDA’s) draft three-year business plan.

NDA chief executive Ian Roxburgh said that “operational difficulties” at Sellafield, in northern England, have put back timescales for defuelling the Magnox power plants.

Future spending is to be centred on the high hazard sites – Sellafield, and Dounreay, in northern Scotland.

Publication of the plan was followed by news that three NDA directors are moving on and being replaced by four new directors to the board.

The NDA budget for the next three years will be £8.5 billion, an increase of £671 million compared to the last three years. This is due in part to the UK government requirement that costs are calculated at a 2.2% per year discounted rate.

A spokeswoman for the NDA said the authority’s annual report had stated that cost estimates have risen to £72.7 billion (undiscounted), which is £7.9 billion higher than the previous estimate.

“Much of this increase is due to improved characterisation of contaminated land and plans for dealing with the higher hazard legacy facilities at Sellafield and Dounreay. Although we expect cost estimates to rise further before they stabilise, a central part of our mission is to deliver year-on-year cost savings through driving efficiency and improved performance through competition,” she said.

She also pointed to the reduction of high active liquor at Sellafield, which should reach 25% volume reduction by 2011, and demolition of the Windscale pile stack and Sellafield separation area ventilation stack.

A UKAEA spokesman outlined site-specific issues at Dounreay which led to some of the cost increases and said that the majority of Dounreay cost increases are due to the 2.2% per year discounted rate requirement.

On that basis, the lifetime cost for site closure has increased from £2.091 billion to £2.694 billion. The Dounreay issues also include improved estimating of costs in later years and identification of gaps in previous plans.

Also, a store for nuclear fuel and materials has been added. It was originally assumed this material would go to a UK fuel store in the 2020s but because there is no formal agreement to hand over the nuclear material, Dounreay has included this new provision.

The current cost estimate for intermediate-level waste (ILW) is now based on a longer period of storage. The timetable for disposal to a repository was rescheduled, requiring ILW storage at Dounreay for 10 years longer than previously planned.

But since this change, the Scottish government has opted for ongoing storage rather than a deep repository. This will affect the next cost plan currently being prepared for Dounreay.

Another issue is that pension contributions are calculated differently.

In terms of the next lifetime plan, the spokesman added: “We have teams of staff working extremely hard to find innovations and efficiencies in the plan to reduce these numbers.”

On publication of the plan, Roxburgh claimed that the NDA was taking a long-term approach but unions have hit out at the lack of attention paid to the consequences of moving money away from the Magnox plants.

Prospect, the union representing nuclear scientists, engineers, and professional staff said the NDA’s strategy was in “tatters”. Prospect national secretary Mike Graham said: “This revised business plan reflects heavily on the problems but does not provide any solutions for the way forward. It strongly promotes the idea of diverting monies from Magnox decommissioning sites to Sellafield high hazard reduction but does not deal with the consequences of such actions.

“We have always supported high hazard reduction as part of an overall plan, and backed the NDA’s original 2006 strategy because it gave a clear 25-year deadline for Magnox decommissioning backed by a coherent skills strategy.

“But the revised plan leaves Magnox hanging in the balance and risks losing the confidence of local stakeholders, for which industry has fought hard. There is no detailed examination of the cost of meeting the severance terms for employees on the sites where clean-up will be suspended, or recognition of how overall costs will soar for every year decommissioning is put on hold.”

Graham also said that when Magnox decommissioning does eventually take place, suitably skilled staff would have changed jobs or retired.

In terms of the departure of NDA bosses, former chief inspector of the Nuclear Installations Inspectorate, Lawrence Williams, former Department of Trade and Industry (DTI) and Liabilities Management Unit member Terry Selby, and David Hayes, a former member of the DTI team that set up the NDA will all leave in March 2008.

The NDA plan is open to consultation until 31 January 2008.

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