Publication date: January 2005

Summary
Greenpeace's submission to the European Union's Competition Commission raises key issues such as:

• Can the NDA be classed as a non-government body if it is benefiting from the profits from commercial nuclear activities?
• Which organisation - BNFL or the NDA - will make the final decision on whether an operation is classed as commercial and how will the monies be allocated?

The new Nuclear Decommissioning Authority (NDA), which comes into being today, will take ownership of many of the UK's major nuclear facilities - including the controversial Sellafield site. But while the NDA was originally flagged in the Legacy White Paper of 2002 as a body that should focus "squarely on [dealing with] the nuclear legacy", it has not been designed to fully deal with the huge problem of radioactive waste. Instead the government has created a body that will:/what-you-can-do/take-action

• operate two large-scale spent nuclear fuel reprocessing plants at Sellafield, which create massive amounts of nuclear waste;
  
• run loss making Magnox reactors;
  
• possibly commission the Sellafield MOX plant, which is meant to produce plutonium-fuel for reactors overseas; and
  
• relieve British Nuclear Fuels of all of its nuclear waste liabilities - a matter which is currently the subject of an investigation by the European Competition Commission.
  
  The NDA will also be heavily reliant on reprocessing and Magnox reactor operations for a sizeable proportion of its income.
  
  "The government has squandered an ideal opportunity to tackle the urgent need for decommissioning and clean-up at some of the UK's most hazardous nuclear sites," said Greenpeace nuclear campaigner Jean McSorley. "The NDA will be dependent for half of its income on waste-creating activities like spent fuel reprocessing in order to fund its decommissioning and clean-up program. It's like paying dustmen to drop litter. The government has also squandered the public goodwill that greeted the initial announcement to create this Authority."
  
  Greenpeace, which has closely followed the progress of the NDA, has been heavily critical of the fact that the Authority will take over all of British Nuclear Fuels nuclear waste liabilities.
  
  McSorley added: "Although the NDA will take over BNFL's assets, these are overshadowed by the cost of its liabilities. In allowing BNFL to effectively dump these liabilities on the doorstep of the NDA, the government has given a massive state-aid bailout to BNFL. The Commission's investigation of the NDA and state aid issues is of vital concern not only in the context of UK subsidies for the nuclear industry, but for the whole of Europe. If BNFL gets away with ditching its liabilities in this way, other nuclear companies across Europe will try to follow suit. This will have major ramifications for competition in the electricity sector and will particularly hurt the developing renewables industry."
  
  It is expected the Competition Commission's investigation, which began in January, will last until the end of the year.
  
  For further details contact Jean McSorley on 07801 212 959 or the Greenpeace press office on 0207 865 8255.

   

   

   

Sellafield nuclear reprocessing plant

The European Commission is expected to begin an investigation on December 1st into whether the UK will contravene European competition rules through establishing the Nuclear Decommissioning Authority (NDA).

On 1st April 2005 all of British Nuclear Fuel's (BNFL's) assets - including reprocessing and fuel fabrication plants, the Magnox reactors (and the Drigg radioactive waste dump) - are due to be transferred to the ownership of the NDA.

It is the transfer of assets from BNFL to the NDA, and how commercial operations may be helped by state aid, which will be main focus of the EC investigation.

Last year Greenpeace first challenged the Department of Trade and Industry (DTI) over the possible state aid implications of the Nuclear Decommissioning Authority. In May, Greenpeace presented a legal opinion to the Commission, which argued that the NDA could not be established or operate without prior EC approval, because it breaks EC rules which prevent governments providing state aid to industries under competition laws. For example, the provision of state aid by the NDA might disadvantage competitor nuclear companies in Belgium and France.

Since May another major problem with the NDA has emerged. Even though when it was originally proposed the Government claimed the NDA's focus would be "squarely on [dealing with] the nuclear legacy", it has since emerged that the Authority will face a conflict of interest, as it will itself be partly dependent on revenue generated by plants that generate nuclear waste.

The government's spending review of 2004 states that half of the NDA's annual budget of £bn is planned to come from commercial activities such as:

• Reprocessing at the Thermal Oxide Reprocessing and Magnox plants at Sellafield;
• Operating the loss-making Magnox reactors; and
• Possibly operating the controversial Mixed Oxide (MOX) plant at Sellafield

It is not clear exactly how the Competition Commission will structure its investigation, but it is known some key facilities will come under special scrutiny. For example, the commissioning and operation of the controversial Mixed Oxide Fuel plant - which has cost an estimated £00m but which has not yet produced one consignment of fuel - will be investigated in order to establish if state aid will be used to support the plant's operations

It is expected the inquiry will take between 9-12 months. In the meantime the NDA will be funded from the Nuclear Liabilities Investment Plan. The EC will not be investigating the United Kingdom Atomic Energy Authority, which runs sites such as Dounreay. This is because the UKAEA is now purely a decommissioning and clean up company.

For more information contact Jean McSorley Greenpeace nuclear campaigner on 07801 212959 or Pete Roche on 07 821 378 210.

Sellafield nuclear plant

Greenpeace today condemned the European Competition Commission for allowing billions of pounds of taxpayers money in state aid for the restructuring of the private nuclear company, British Energy (BE). The company applied for state aid in 2002, when it almost went bankrupt following a fall in electricity prices.

The commission decision allows for 4-5 billion pounds to be given to British Energy to cover its reactor decommissioning and nuclear waste liabilities. When BE was privatised in 1996 it was meant to set up a fund to cover liabilities but failed to properly fund it.

Greenpeace nuclear campaigner Jean McSorley said: "It is scandalous that the commission has allowed subsidies to British Energy. Although the commission has set some conditions, such as limiting British Energy's nuclear generating activities, these do nothing to compensate for the fact that billions of pounds of taxpayers money will be squandered on an unsafe energy system which not capable of making itself viable without a massive financial prop. This decision will open the floodgates for other European governments to give state aid to their nuclear sectors."

McSorley added: "Every pound that goes on nuclear power is a pound that could have gone to renewable energy or energy efficiency. This will significantly impact on the government's aim to have 20% of the UK's electricity from renewables by 2020. The decision to allow state aid funding to cover British Energy's liabilities also contradicts the UK government's claims that a privatised nuclear industry can pay its own way and effectively compete in the UK and Europe."

Because the commission's decision has not been published in full it is not clear exactly how the decision will impact on the subsidised contracts between British Energy and state-owned British Nuclear Fuels, but it looks as though these will be fully funded also. Greenpeace legal advisors will be reading the decision and advising whether there are grounds to challenge it.

NB Notes to editors

1. November 2002: Greenpeace won permission to challenge the government for failing to get EC approval before it gave British Energy rescue aid. The commission subsequently agreed that the government's payment had been unlawful and insisted that the government had to get commission approval for the BE restructuring plan.
2. July 2003: the government and BE fail to get commission approval for restructuring plan. The commission's preliminary decision is that the restructuring plan is unlawful and they open it for investigation. Greenpeace commissioned leading EC competition law expert, Paul Lasok QC, for its formal submission to the commission. Greenpeace agrees that the restructuring would be unlawful, not only for the reasons given by the commission but also because the deal involved help from BNFL which would also count as state aid. The Greenpeace submission to the Commission
3. February 2004: Greenpeace presented evidence to the EC on the costs of the BE-BNFL reprocessing contracts from leading nuclear and energy economist Gordon McKerron.
4. April 2004: Greenpeace presented a legal opinion to the EC on the potential unlawfulness of the legislation covering the Nuclear Decommissioning Authority. The opinion focussed on the potential for the NDA to give state aid to BE in addition to the £3.5bn for decommissioning and radioactive waste proposed in the restructuring package.

For more information please contact the Greenpeace Press Office on 0207 865 8255.

Sellafield nuclear power plant

Greenpeace today welcomed the announcement by British Nuclear Group (BNG) to finally close the Chapelcross magnox nuclear power reactors in Dumfriesshire. The company has said the cost of continuing to operate the plant cannot be justified on a commercial basis.

"Some time ago BNG acknowledged all its magnox stations are loss makers, but continued to squander taxpayer money in keeping them open. BNG has at least now openly conceded that the balance sheet doesn't add up for Chapelcross any more," said Jean McSorley, Greenpeace nuclear campaigner.

"What we hope now is that BNG will apply the same financial criteria to the rest of its operations and close the reprocessing operations at Sellafield which are also uneconomic. In particular we're concerned that the company doesn't plan to close the magnox reprocessing plant, which handles waste from the magnox reactors, until 2010. Early closure of the remaining loss-making magnox reactors would means magnox reprocessing could end more quickly. That would be a win for the environment as 80% of Sellafield's radioactive discharges into the Irish Sea come from reprocessing magnox waste."

Chapelcross has played a key role in the UK's nuclear weapons program, initially supplying plutonium for weapons and later the designated site for the production of tritium, used as a 'trigger' in nuclear weapons. Its primary role for nuclear weapons, not for electricity, was only admitted in the 1980s. The other plant built primarily for weapons material supply was Calder Hall on the Sellafield site.

The Chapelcross reactors are the last remaining source of tritium production in the UK for nuclear weapons. It is not known where the Ministry of Defence will source this material in future.

Further information
Contact Jean McSorley on 07801 212 959 or the Greenpeace press office on 020 7865 8255.

Notes to editors
Chapelcross began electricity production in February 1959. There were four magnox reactors on site. Planned dates for closure of the Company's remaining magnox plants are: Sizewell A (2006), Dungeness A (2006), Oldbury (2008) and Wylfa (2010).