NDA gives revised UK clean-up cost estimates

18 July 2008

The Nuclear Decommissioning Authority (NDA) has published its 2007/08 Annual Report, in which revised higher baseline cost estimates for cleaning up the UK nuclear legacy are given.

Chapelcross demolition 
Cooling towers at Chapelcross are
demolished - one measure of the NDA's
The NDA said that it has made significant progress against its government targets in respect of introducing competition, generating efficiencies and establishing a baseline estimate for the decommissioning nuclear liabilities.

Two key developments were highlighted by the NDA. The contract for the first competition for the parent body of Low-Level Waste Repository Ltd was awarded on 31 March to UK Nuclear Waste Management Ltd, while the competition for the parent body for Sellafield Ltd has progressed well, the NDA said, with the preferred bidder, Nuclear Management Partners, announced on 11 July.

The NDA stated that, despite "income volatilities and some unplanned expenditure" it has delivered its planned program of work. Income generated by NDA-owned Magnox generating sites and from reprocessing at Sellafield during the year was £1.46 billion ($2.91 billion), an increase of £252 million ($503 million) from the previous year. It added that "poor plant performance at Thorp and the Sellafield MOX Plant was offset by realising income from waste substitution."

In 2007/08, £2.3 billion ($4.6 billion) of work was performed for a cost of £2.2 billion ($4.4 billion), providing efficiencies of £110 million ($220 million) during the year, the NDA reported.

The NDA said that, after three years of work, it has now been able to produce an underpinned baseline for the cost of the decommissioning and clean-up program. The project involves decommissioning 26 Magnox power reactors, the Dounreay, Windscale, Harwell and Winfrith research sites, as well as the huge Sellafield complex. The NDA has faced criticism several times for revising its cost estimates for cleaning up the UK nuclear legacy.

The discounted nuclear liability is now estimated at £40.7 billion ($81.2 billion), with a further £3.4 billion ($6.8 billion) for the construction and lifetime costs of a deep geological disposal facility. The discounted total of the nuclear liabilities estimate has increased therefore from £37.0 billion ($73.9 billion) in 2006/07 to £44.1 billion ($88.0 billion). The undiscounted costs for the 130-year program of decommissioning and clean-up are £63.5 billion ($126.7 billion), and the NDA's share of the undiscounted cost for construction and operation of the geological disposal facility is £10.1 billion ($20.1 billion).

NDA chairman Stephen Henwood said: "With government policy now clear in support of new nuclear build, interest remains high in the NDA's progress on its program to decommission and clean-up the UK's civil nuclear legacy. But comparisons between the legacy, which has its roots in early scientific research and military uses, and the downstream costs associated with new build are very hard to make."

He added, "When we took ownership for the 19 designated sites, it was clear that much work needed to be done to understand better the lifetime program and costs for each site. After three years of investigation and analysis we now have a much improved understanding. Inevitably, this has resulted in increased costs."

Henwood noted, "The £7 billion ($14 billion) increase in the discounted cost can be explained in two parts: roughly half results from a combination of the re-phasing of work to focus on the higher hazards together with updated assumptions around inflation rates in the construction sector; the remainder arises from revisions to the Magnox Operating Program and consequently the need to operate Sellafield reprocessing facilities for longer, as well as having greater certainty around the costs for intermediate-level waste and contaminated land remediation."

He added, "Our task going forward, together with our world-class contractors, is to bring these costs down over time."