Conclusion
59. BNFL and successive Governments seem to
have embarked on reprocessing on the current scale based on a
number of what have turned out to be false premises—
- there would be a premium attached to a secure
supply of uranium:
- the UK nuclear generation industry would grow
substantially:
- there would be great demand for separated plutonium
for use in fast-breeder or other new generation reactors:
- there was no realistic alternative to reprocessing
of spent oxide fuels.
60. Circumstances have changed considerably in recent
years —
- the price and ready availability of uranium no
longer seem to justify the expense of reprocessing spent fuel
and converting the reprocessed uranium (RepU) arising into a form
in which it can then be enriched and re-enter the fuel cycle.
Virtually none of the RepU recovered at THORP has been re-used,
although BNFL told us of prospects for a sale of a small quantity
to Russia. BNFL holds a stockpile for its customers of 2,500 tonnes
of RepU.[99]
- plutonium separated from used fuel is not only
no longer required by any end-user, but is increasingly regarded
as a positively dangerous waste product. Because of its physical
properties and its potential attraction to terrorists or others
seeking material for nuclear weapons, it has to be heavily shielded
and securely guarded. The future disposal of the UK's current
stockpile of separated plutonium, estimated to rise to at least
100 tonnes by 2010 if reprocessing continues, is currently under
consideration. The future of separated plutonium held in the UK
for overseas customers also requires urgent attention.
- the curtailment of the programme of construction
of new nuclear power stations in the UK, and the absence of any
suggestion that new nuclear power stations will be built in the
UK for the foreseeable future, has left BNFL's reprocessing facilities
dependent on overseas customers for profitability to a much greater
degree than foreseen as recently as in the 1993 review, let alone
when THORP was conceived in the 1970s.
- technologies for long-term storage and disposal
of nuclear wastes have advanced considerably in recent years,
so that reprocessing used fuel is now the exception to general
international practice. The Government is shortly to issue a consultation
paper on future nuclear waste management.
61. It has been suggested that BNFL's reprocessing
contracts could and should be renegotiated to storage contracts,
using recent technologies such as vitrification: and that BNFL
could actually profit from such a change.[100]
It is likely that this will be one of the issues examined by BNFL
in its strategic review. The proposal begs several questions:
the ultimate destination of the overseas used fuel to be stored,
the doubtful assumptions made on the cost of storage, and the
acceptability to the regulators and local authorities of a switch
to storage. It must be recognised that a complex and expensive
chemical engineering plant designed to reprocess used nuclear
fuels cannot simply be used as a medium or long-term storage facility
for used fuel, and that the authority of regulators and consent
of the local population cannot be taken for granted. It is not
necessarily profitable for the owners of a chemical plant to see
it converted into a storage site. Those best placed to judge the
commercial viability of such a strategy are the Board of
BNFL. BNFL should address in its Corporate Plan the prospects
of reprocessing over the next four years to the end of the baseload
contract period in 2004, and identify the commercial implications
of any shift in policy from reprocessing to storage. If a PPP
were to proceed, one of the first tasks for a new Board would
be to examine the question of reprocessing at THORP from a fresh
and more commercially-oriented perspective.
62. The wider debate on the future of reprocessing
is to some degree independent of the question on the future status
of BNFL. It began before the issue of a PPP for BNFL was raised,
and it is likely to continue for some time. A consultation on
the future of reprocessing at Dounreay is already under way, with
one of the options being long-term storage. The outcome of that
consultation is likely to be a straw in the wind. A degree of
certainty as to the future of reprocessing in the UK is a prerequisite
for any valuation of BNFL for the purposes of a PPP. It is therefore
no longer sufficient to rely simply on reassertion of the importance
of BNFL's forward order book, of the number of jobs directly or
indirectly attributed to the operation of THORP, and of BNFL's
liability to repay money paid on account by its customers for
THORP. The Government should clarify in the course of this
year its policy on reprocessing of oxide fuels at the Sellafield
THORP plant, particularly in the period after 2004: and the extent
to which the Government remains committed to the policy enunciated
by Mr Benn in 1976 that BNFL should actively seek reprocessing
contracts from overseas, subject to return of radioactive wastes.
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