NDA advised on soaring clean-up costs

30 January 2008

Long term cost and progress estimation needs revision at the UK Nuclear Decommissioning Authority (NDA) to put escalating figures - of some £73 billion ($145 billion) - in perspective, a report by the National Audit Office (NAO) said.


 Chapelcross cooling towers
Cooling towers come down at the Chapelcross Magnox station (Image: BNG)
The NDA has faced criticism several times for revising its cost estimates for cleaning up the UK nuclear legacy. The cost of this 100-year project, which involves decommissioning 26 Magnox power reactors, the Dounreay, Windscale, Harwell and Winfrith research sites as well as the huge Sellafield complex, has risen from a 2005 estimate of £63 billion to £73 billion announced last year.


An NAO report released today said this was in part down to a greater understanding of the task, but that it would have expected medium-term costs estimates to be settled now, over two years since the NDA began work. In fact, costs for the first five-year period rose by over 40% between 2005 and 2007. An NDA response pointed out that it had actually achieved £300 million more work than budgeted.


The NDA is funded to the tune of about £2 billion per year by government. Part of the arrangement is that income from operating NDA facilities goes to government. This was meant to add up to around £1 billion per year, but has been hit very seriously by the troubles at the Thorp reprocessing plant, which did not operate for many months following a piping failure in 2005.


In addition to rising estimates the NDA has also cut funding to some sites, affecting work programs. For example, funding levels set in October 2006 for work at shutdown Magnox sites were reduced by £66 million when final allocation came in February 2007. Some sites suffering 10-20% funding cuts. At Bradwell, funding was cut by 39%.


The NAO put this down to "the need to fulfil urgent expenditure requirements, particularly at Sellafield, and the uncertainty of commercial income from its aging and unreliable facilities." The budget changes have "created significant uncertainty" for site licensee companies and the contractors they employ. Lack of confidence in the short term could lead to loss of potential long-term savings through innovation, the NAO said, because the impacts of short-term changes on lifetime plans cannot easily be seen at present.


The NAO made some suggestions regarding the NDA's progress reporting. Instead of measuring progress mainly in terms of buildings demolished, the NDA should develop "robust hazard baselines" that put the work to place radioactive wastes in safe conditions in perspective. Hazard reduction through legacy materials management is one of the NDA's primary concerns. "In the absence of appropriate measures of progress, the focus of external parties monitoring the NDA's performance is likely to be skewed towards levels of spend, rather than outputs and outcomes."