29 August 2002 Edition

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Brits bail out nuclear power firms


Inefficient, unprofitable, unmanageable, unplanned, unaccountable and unacceptable. Yes, its just another week in the life of the British nuclear power industry. Another week when Irish lives were endangered and one where the Dublin government, despite their promise of action on Sellafield, were once again silent.

As you read this, two British Nuclear Fuels (BNFL) ships, carrying 255 kilos of plutonium, are moving towards Irish territorial waters. They are carrying a plutonium shipment being returned to Sellafield's MOX fuel reprocessing plant because its Japanese buyers refused to unload it after they realised that BNFL workers had falsified safety records when reprocessing the fuel in 1999.


This though, is the last chapter in the week's events. Last weekend, a row broke out within the nuclear industry on where they would store their toxic waste. Robin Jeffrey, chief executive of British Energy (BE), one of the privatised nuclear companies created during the Thatcher years, declared that Sellafield would be the best place to bury nuclear waste.

Currently there are 10,000 tonnes of solid nuclear waste in Britain. This will rise to half a million tonnes as the outdated reactors around Britain are dismantled in the coming decades. Jeffrey believes that burying the waste underground at Sellafield is the "sensible solution".

Plans for underground test sites at Sellafield were abandoned in 1997 when the Conservative government denied planning permission in the run up to the Westminster elections. Chris Murray, managing director of Nirex, the body set up by the British government to oversee the safe disposal of nuclear waste, described Jeffrey's comments as "very unhelpful".

Currently, the British government is involved in a consultation period that will run to 2007. The aim of this is to win public support for whatever disposal option is chosen. Jeffrey thinks the consultation period is too long and work should start again at Sellafield.

It didn't end there for BE; they were having a busy week and stayed in the news on Monday with calls for reform of the British electricity market pricing agreements.


In March 2001, Ofgem, the British electricity regulator, introduced New Electricity Trading Arrangements (NETA), the aim of which was to make the power market in Britain more competitive. Now, falling electricity prices are making BE's nuclear power plants unprofitable. Prices in the wholesale market have fallen by 30%. BE produces 25% of British electricity and lost £493 million in the first 12 months of the new, more competitive price regime.

Ofgem believes that "this is a commercial market and, as in all markets, companies will fail". BE needn't have worried, a knight in shining armour was on its way. Enter Labour Energy minister Brian Wilson. On Monday he said that "we need to address the unfortunate reality that British Energy can't get a price for its product that's reasonable". When BE was privatised it was made up of ten of the most modern nuclear reactors in Britain to make it commercially attractive to the private sector.


On Tuesday, the white knight began to deliver. BE would take over the running of BNFL's Magnox reactors. These six oldest plants are due to be decommissioned in 2010.

BE's share prices jumped 28% on the day as Energy minister Brian Wilson also raised the prospect of changing the market agreement which had allowed electricity prices to fall. Wilson has to be careful, as increases in prices to the customer would be difficult for New Labour to justify.

Instead, BE is to be helped by the management fee for running the six Magnox reactors which ran up losses of £115 million for BNFL over the last financial year. BE would get paid just to run these unprofitable stations. BE is also looking for a cut in the costs it pays BNFL to reprocess its spent fuel.

This is interesting, because BNFL has never made a profit from its THORP or MOX reprocessing facilities. Reducing what BE are charged will make state-owned BNFL even more unprofitable. So in the end, the ordinary householder is footing the bill through taxes.


Sinn Féin TD and Environment spokesperson Arthur Morgan described the BE situation and the British government proposals as "proof that the British government have no intention of recognising the failures of their nuclear power project".

The fact that no buyers can be found for BNFL and that BE had to be bailed out just six years after privatisation and 15 months of a competitive power market showed that nuclear power was not "a viable economic power generation strategy".

The Louth TD said the BE proposal to build nuclear waste storage facilities underground at Sellafield was "horrifying".

"It is bad enough that the British nuclear power industry is clearly uneconomic, unprofitable and sucking resources into short term subsidies that should be invested in long term strategies to develop power using renewable resources. When you also include a deplorable safety record and an inability to plan long term, you have a series of crises.

"The nuclear power industry in Britain, whether it is BE or BNFL, is uneconomic and unsafe. The Irish government must call on the British government to shut down not just Sellafield's reprocessing plants and generators, but begin a real long-term plan to replace the nuclear reactors with renewable energy generation plants.

"Also crucially important is the need to be vocal and vigilant against any proposals to store waste underground at Sellafield. It is already Europe's largest site for nuclear waste, and in December 1998 was found by the British Health and Safety Authority to be in danger of leaking. We can't trust BNFL to safely store the waste it has now. How can we possibly depend on them to save 50 times that amount of waste?"

For now the subsidies, bailouts and accidents are set to continue.

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