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M.J.Sadnicki Operational Research and Economic Analysis50 Paines Lane, Pinner, Middlesex, HA5 3DA Tel & Fax : 0181 429 0501 E-mail : Sadnicki@AOL.com 2nd January 1998 Margaret Beckett MP President of the Board of Trade and Secretary of State for Industry 1 Victoria Street London SW1H 0ET
Dear Secretary of State, Second Consultation on the application by the United Kingdom Atomic Energy Authority for revised radioactive discharge authorisations at Dounreay Reprocessing of spent overseas reactor fuel : Requests for Information I am acting with Mike Townsley as consultant to Greenpeace International, Friends of the Earth Scotland and the Nuclear Free Local Authorities. I enclose a paper which sets out a number of requests for information, and an explanatory i ntroduction. The requests are made to enable responses to be prepared by the above organisations in the context of the second consultation on the application for revised radioactive discharge authorisations at Dounreay. I have been asked to send the reque sts simultaneously to the Department of Trade and Industry, the Scottish Environment Protection Agency (SEPA), and the United Kingdom Atomic Energy Authority (UKAEA). The information requests are made under both the Environmental Information Regulations and the Code of Practice on Access to Government Information, bearing in mind the spirit of the White Paper, Your Right to Know, (CM 3818), wh ich explicitly refers to the UKAEA.
I would be grateful if you would arrange for these requests to be dealt with as soon as possible. As we say in the covering page of the paper, our intention is to elicit information which we anticipate will be readily available; we hope that our requests can be efficiently allocated between the three recipient organisations, and that the requests will not cause any significant diversion of resources. I attach a list of the individuals and organisations to whom I have been asked to send a copy of the paper, either for action or for information. Yours sincerely,
M. J. Sadnicki M.J.Sadnicki Operational Research and Economic Analysis50 Paines Lane, Pinner, Middlesex, HA5 3DA Tel & Fax : 0181 429 0501 E-mail : Sadnicki@AOL.com
2nd January 1998 John Battle MP Minister for Science, Energy and Industry Department of Trade and Industry 1 Victoria St London SW1H 0ET
Dear Mr Battle, Second Consultation on the application by the United Kingdom Atomic Energy Authority for revised radioactive discharge authorisations at Dounreay Reprocessing of spent overseas reactor fuel : Requests for Information I am acting with Mike Townsley as consultant to Greenpeace International, Friends of the Earth Scotland and the Nuclear Free Local Authorities. I enclose a paper which sets out a number of requests for information, and an explanatory in troduction. The requests are made to enable responses to be prepared by the above organisations in the context of the second consultation on the application for revised radioactive discharge authorisations at Dounreay. I have been asked to send the reques ts simultaneously to the Department of Trade and Industry, the Scottish Environment Protection Agency (SEPA), and the United Kingdom Atomic Energy Authority (UKAEA), and have also been asked to send you a copy of the paper for informa tion. The information requests are made under both the Environmental Information Regulations and the Code of Practice on Access to Government Information, bearing in mind the spirit of the White Paper, Your Right to Know, (CM 3818), wh ich explicitly refers to the UKAEA.
As we say in the covering page of the paper, our intention is to elicit information which we anticipate will be readily available, and we hope that the requests for information will not cause any significant diversion of resources. I attach a list of all the individuals and organisations to whom I have been asked to send a copy of the paper, for action or for information. Yours sincerely,
M. J. Sadnicki
SECOND CONSULTATION ON THE APPLICATION BY THE UKAEA FOR REVISED RADIOACTIVE DISCHARGE AUTHORISATIONS AT DOUNREAY REPROCESSING OF SPENT OVERSEAS REACTOR FUEL REQUESTS FOR INFORMATION by Greenpeace International; Friends of the Earth Scotland; Nuclear Free Local Authorities.
List of recipients
For action and reply: Margaret Beckett MP President of the Board of Trade and Secretary of State for Industry SEPA: Dr George Hunter Head of Policy Coordination (Radioactive Substances) UKAEA: Dr Roy Nelson Director, Dounreay
For information: John Battle MP Minister for Science, Energy and Industry Lord Clinton-Davis Minister for Trade Michael Meacher MP Minister for the Environment Dr David Clark Chancellor of the Duchy of Lancashire Freedom of Information Unit
Alistair Darling MP Chief Secretary to the Treasury. 2 January 1998 SECOND CONSULTATION ON THE APPLICATION BY THE UKAEA FOR REVISED RADIOACTIVE DISCHARGE AUTHORISATIONS AT DOUNREAY REPROCESSING OF SPENT OVERSEAS REACTOR FUEL REQUESTS FOR INFORMATION
This paper has been prepared on behalf of the Nuclear Free Local Authorities, Friends of the Earth Scotland, and Greenpeace International. It contains a list of requests for information concerning the economic justification for the prop osed reprocessing of spent foreign research reactor fuel at Dounreay. The requests are being sent simultaneously to the Department of Trade and Industry, the Scottish Environment Protection Agency (SEPA), and the United Kingdom Atomic Energy Authority (UKAEA). The requests do not constitute a response to the Second Consultation on UKAEA’s applications for authorisations under the Radioactive Substances Act 1993 which commenced this month, albeit they are prompted quite specifically by that pr ocess. They are requests for information to which the applicants are advised they are entitled, and which is required to inform the applicants’ response to the consultation which they have in turn been asked to provide by 23rd February 1998. The requests have been drafted as carefully as possible so that they can be dealt with without causing any significant diversion of resources. The organisations receiving these requests are asked to ensure that the requests are put to the person(s) in the relevant org anisation most likely to have detailed knowledge of the subject area to which the requests relate. Extensive searching and reading of files is not sought, and staff not familiar with the issues are asked not to deal with the requests. Where liaison betwee n the three organisations concerned may provide efficiencies in responding to the requests, it is assumed that this will be undertaken. If the person dealing with any request or part of it feels that any part of the request is unclear, or feels that it would be helpful to establish more precisely what are our expectations, please contact Mike Sadnicki by telephone (018 1-429-0501) in the first place to clarify the matter.
Section 1 introduces the issues and describes the reasons for preparing the requests for information. Section 2 provides a list of the 47 requests for information. In some cases, there is a short introduction before the request for inf ormation itself. In all cases the request for information proper is in italics. Mike Sadnicki and Mike Townsley 2 January 1998.
1. INTRODUCTION 1.1 The application The UKAEA submitted an application for revised radioactive discharge authorisations in October 1993. The application covers discharges from: (i) the decommissioning of redundant facilities, primarily decommissioning of the Dounreay Fast Reactor (DFR) and the Prototype Fast Reactor (PFR);(ii) the reprocessing of PFR fuel;(iii) a wide variety of supporting faci lities, operated to provide waste handling support, which generate radioactive waste; (iv) commercial work, including, reprocessing, fuel fabrication and waste treatment.The ruling made in 1994 by Mr Justice Potts, during judicial review of the Government's decision as regulator to authorise discharges from inter ali a the Thermal Oxide Reprocessing Plant (THORP) at Sellafield, found that, as a matter of law, radioactive discharges could not be authorised, unless each practice giving rise to the discharges or part of them was previously found by the regulator to offer benefits which outweighed any detriments including the harm caused by its discharges. This placed the onus on the UKAEA to provide evidence of such benefit for the first time and on the regulators to undertake an adequate process of investigation into bo th benefits and detriments. It is clear that the weighing of advantage and disadvantage involves a process which requires the review of all relevant factors, tangible and intangible. This is not limited to environmental, health and safety, and economic fa ctors, but also covers many other factors including public attitudes. In June 1997, the Secretary of State for Scotland, Donald Dewar, initiated a second round of consultation on the proposed authorisation. While the consultation allows comment on all aspects of the proposed authorisations, attention cont inues to focus on one of the most controversial practices at Dounreay relevant to the current applications for authorisations - reprocessing of spent overseas research reactor fuel. This paper is concerned only with one practice contained within item (iv) above: commercial reprocessing using the D1204 plant for reprocessing spent fuel from Materials Testing Reactors. In addition, this paper is only concerned wit h the economic information relating to the case made by the UKAEA, the consequent benefits claimed, and any assessment of these undertaken to date by the regulator. One problem in considering the information provided by the UKAEA from time to time since 1993 is that it is not clear what assumptions were being made regarding the certainty or likelihood of obtaining commercial reprocessing work; nor is it apparent from the documentation provided by the regulators what judgement they made of the reliability of any such projections. The requests for information are here primarily framed around the only contract known to be under discussion for wo rk at the D1204 plant, the proposal to reprocess some 1300 spent fuel rods from the Lucas Heights research reactor operated by the Australian Nuclear Science and Technology Organisation (ANSTO). However, other possible customers or contracts under discuss ion will be relevant in the context of some of the requests.
1.2 The weakness of the previous UKAEA benefit case SEPA has correctly interpreted the 1994 Lord Justice Potts ruling on justification to mean that SEPA is duty bound to establish whether the net benefits of overseas reprocessing outweigh the detriments prior to granting authorisation. I n doing so, SEPA must inquire thoroughly into the financial merits of such work and arrive at a proper judgement on them. It is clear from the two volume consultation package that SEPA has had insufficient information to make such a judgement. SEPA recognised that "there should be clear economic justification for reprocessing overseas material." The failure of SEPA and the process in general to judge adequately the economic justification was highlighted by SEPA Chief Executive, Alisdair Paton, who was minuted as follows: "While he accepted that the economic justification of foreign reprocessing had not been particularly robust, he believed that this was largely due to a lack of detailed information. A sensitivity analysis might be wort hwhile ."No subsequent indication has been given as to whether such an analysis has been carried out. At the next SEPA Board meeting, the SEPA Chair, Professor William Turmeau, was minuted as noting: "that the justification [for overseas reprocessing] might not have been as strong as he would have wished ."SEPA also commented elsewhere: "SEPA is less convinced of the magnitude of the net benefits of the reprocessing of foreign fuel but considers this to be positive providing the resulting radioactive waste is returned to its country of origin as soon as practicable after the waste has arisen and in the case of low level waste and intermediate level waste, or their equivalent agreed with SEPA, no longer than ten years after the waste has arisen."
1.3 A simple process by which any economic benefit could be established It is our contention that it should be a simple matter for economic benefits to be defined, in the public domain and to a satisfactory level of detail. There are basically two Scenarios:
(A) Lucas Heights contract goes ahead; (B) Lucas Heights contract does not go ahead; D1204 shuts down. It is necessary to establish four separate UKAEA cash flow streams for each Scenario: (i) year by year revenue; (ii) year by year capital expenditure required (iii) year by year operating costs incurred (iv) year by year decommissioning costs These four cash streams can, if desired, be summarised in a single measure such as Net Present Value (NPV). The benefit of the Lucas Heights contract can then be expressed as NPV(Scenario A) minus NPV(Scenario B). This is essenti ally what the UKAEA must already have done for its own information, in assessing the viability of continued commercial reprocessing at D1204. The problem is that, by and large, the SEPA Volumes contain economic information from the UKAEA that is deficient in at least three important respects:
Only a few scraps of the supporting information are given. As a consequence it is impossible for the observer to gain an understanding of the supporting assumptions. It is therefore not possible for the public to come to a view on the & quot;justification" for continued reprocessing at D1204 and its radioactive discharge implications - one of the most controversial aspects of work at Dounreay. This makes the consultation exercise meaningless in any significant sense. An understanding of the supporting assumptions is vital in at least four contexts:
In the absence of supporting information, there can be no valid assessment of whether economic benefit of D1204 reprocessing has been established or not. Section 2 contains a list of requests which set out to establish the supporting information. The objective is to establish the four cash streams for each of the two Scenarios.
1.4 Potential availability of answers to requests Although the information requested below relates to the economic case, we are advised that in principle it may well constitute "information relating to the environment" for the purpose of the Environmental Regulations in v iew of the definition of "environmental information" as including "information relating to an activity which adversely affects water or air." However as this aspect of the definition has never been considered judicially, this is not en tirely free from doubt. Accordingly the information request is made under both the Environmental Information Regulations and the Code of Practice on Access to Government Information, relying primarily on the Code at this stage, but also bearing in mind th e spirit of the White Paper, Your Right to Know, (CM 3818), which explicitly refers to the UKAEA. The Code requires that the relevant information should be made available ... "as soon as practicable. The target for response to simple requests for information is 20 working days from the date of receipt. The target may be extended when significant search or collation of material is required." It is important to stress that the information requested must already be readily available within the UKAEA, and will have been prepared as a matter of routine. Any hypothesis that the UKAEA would have considered such a commercial contract without such supporting information is simply not credible. The request therefore should easily fall within the category of a simple request referred to above. It should be straightforward for the response s to be co-ordinated and a reply sent by one of the three bodies involved within 20 working days (ie by 3 February 1998 at the latest). It would also not be credible for information to be refused on the ground of commercial confidentiality. The Code defines information, which it is open to the decision-maker to exempt from disclosure but which the decision-maker may nev ertheless disclose, as follows: "information including commercial confidences…, whose unwarranted disclosure would harm the competitive position of a third party". Such exemption does not apply in this case. There are several levels of argument; each of which on its own would be sufficient cause to deny exemption from disclosure:
2 REQUESTS Basic contract parameters R1. How many spent fuel rods are planned for shipment to Dounreay? 1300? What is the planned shipment in each year? R2. How many spent fuel rods are currently in storage at Lucas Heights? How many more will be produced by the Lucas Heights reactor in each year from 1998 to 2005? What is the cooling off period at Lucas Hei ghts before shipment? Will 1300 spent fuel rods be ready for shipment by 2002? Will any spent fuel generated at Lucas Heights be shipped to Dounreay after 2002? If yes, will this be as part of the contract currently under negotiation, or under a s eparate contract? R3. In the current proposed contract, between which years will the reprocessing at D1204 take place? Start year 2001? Finish year 2002? What will be the annual throughput in each year of reprocessing? R4. What is the weight of each spent fuel rod? Future revenue R5. In evidence to SEPA, the UKAEA states: "It is always difficult to predict future turnover in the work being carried out for others (both UK and abroad)" Why is it difficult in the case of the Lucas Heights contract? Is there not a draft contractual agreement to refer to? R6. SEPA reports UKAEA evidence on revenue as: "The revenue associated with this practice is estimated, from data supplied by the UKAEA, to be in the range of £100 million to £120 million over a 10-year period."...."Additionally, the foreign earnings acco rding to UKAEA from this activity are worth £90 - £110 million to the national balance of payments." Does the £10 million difference between the two ranges quoted above arise because of payments of £10 million in foreign currency by UKAEA? If yes, to whom are these payments planned to be made? R7. SEPA reports the basis of the £100 to £120 million revenue estimate as: "Based on data from UKAEA. Existing contracts total £29 million with a further £52 million currently under offer." What specifically are the contracts which are existing? And what specifically are the contracts which are under offer? In which category is Lucas Heights? What proportion does it comprise of the £29 million, or of the £ 52 million? The total of the existing category and the under offer category is £81 million - what are the specific assumptions behind the remaining £19 to £39 million?. R8. In Annex 8, UKAEA give a Table summing to £100 million, repeated below as Table 1.
Are there are any further updates of the figures in Table 1? What is the basis of the figures quoted - is the basis Present Value (PV) at 6%? Is the £100 million given in Table 1 calculated on the same basis as the range given in SEPA Volume 1, Annex 7? Is the £100 million given in Table 1 the same figure (ie. using the same assumptions) as the £100 million given as the lower bound for estimated revenue in SEPA Volume 1, Annex 7? R9. The problem is to estimate the value of the Lucas Heights contract from the figures in Table 1. An example calculation is given in Table 2 below, assuming that the Lucas Heights contract is responsible for one half by value of the category Spent fuel reprocessing; one tenth by value of the category Conditioning of wastes and others; and 0% of the other categories.
Are our estimates of the proportions in Column [3] correct? That is, does the Lucas Heights contract represent about one half by value of future estimated revenue (in PV terms at 6%) from the item: ‘Spent fuel reprocessing’? That is, does the Lucas Heights contract represent about one tenth by value of future estimated revenue (in PV terms at 6%) from the item: ‘Conditioning wastes/others’? In particular, our estimate of the total value of the Lucas Heights contract (in PV terms at 6%) in Column [4] is £9.7 million. Is this correct? Can UKAEA correct this figure for us, given any improvements it can give to the figu res in Columns [2] and [3]? R10. The contract must demonstrate subsequent use of the HEU which is recovered by reprocessing. Does the estimate of revenue include an element for subsequent manufacture and sale of MTR fuel? How could ANSTO make use of such fuel? Is sale of MTR fuel to a third country envisaged? If such revenue from Australia or another count ry is envisaged, please give quantities, annual values and timescales. R11. The next problem is to compute a method of translating from the revenue figures in Tables 1 and 2 above (PV at 6%) to annual revenue figures (£ million a year). The calculation depends on the discount rate, the start year of payment, and the finish year of payment, and is set out in Annex A. The procedure set out in Annex A calculates a conversion factor of 0.216, to convert from the revenue PV figures of revenue in Tables 1 and 2 (PV at 6%) to annual revenue figures (£ million a year) - can this con version factor be confirmed? Alternatively, how should our estimated conversion factor be corrected in the light of corrections to the method of calculation, and/or to the assumed start date of revenue payments, and/or to the assumed finish date of revenu e payments? R12. Using our sample results from requests 10 and 11 we can obtain the result that the average annual revenue is 0.216 * £9.7 million, about £2.1 million, for the six years 1998 to 2004. That is, the total contrac t value in undiscounted terms is about £12.6 million. Can the planned total undiscounted revenue be given? Can the planned figures be given for undiscounted revenue for each year of payment? (The final figure should be consistent with any corrections made by UKAEA to the answers we have as sumed to requests 10 and 11.) R13. Using the 1300 spent fuel rods from request 1, the 2 kg per fuel rod from request 4, and the £12.6 million total undiscounted contract value from request 12, this gives a price of about £4,846 per kg of spent fuel. Can this be confirmed? Alternatively, can the revised figure be given? (The final figure should be consistent with any corrections made by UKAEA to the answers we have assumed to requests 1, 4 and 12.) Capital costs R14. Has there been any investment in the period 1993 - 1997 in order to prepare the MTR reprocessing plant for reprocessing of Lucas Heights spent fuel? Have such costs been factored into the costings? R15. Has there been any investment in the period 1993 - 1997 in storage facilities for spent fuel prior to reprocessing? Have such costs been factored into the costings? R16. Will any investment be required in the period 1998 - 2005 in order to maintain the MTR reprocessing plant for the reprocessing of Lucas Heights spent fuel? (That is, independently of what the NII might say - see request 18) Has the cost of these improvements in the D1204 reprocessing plant been included in the costings? R17. Where will the Lucas Heights spent fuel be stored prior to reprocessing? Are the storage facilities for the Lucas Heights spent fuel adequate? Will any investment be required in the period 1998 - 2005? (That is, indep endently of what the NII might say - see request 18) Has the cost of these storage facilities been included in the costings? R18. The Nuclear Installations Inspectorate (NII) has announced that both of Dounreay's reprocessing plants must remain closed until there has been a thorough review of their safety. The NII has also said that there should be no importation of spent fuel to Dounreay until the NII has approved storage and reprocessing arrangements for the fuel. The NII decision reflects concerns that the D1206 Mixed Oxide plant and D1204 highly-enriched uranium plant are both elderly and could suffer major breakdowns. NII senior inspector, Dr David Turton, has told the site's local liaison committee that there will be a thorough examination of the safety of both plants, built in the 1950s, before reprocessing or any other similar work can be re sumed. "Plant improvements will be sought where they are required and where it is reasonably practicable to do so. Adequate safety cases will be required ... before agreement is given both to the receipt and reprocessing of Australian materials reactor fuel in D1204 .. " Has UKAEA received notification from NII as to exactly what criteria they will be required to meet in providing an acceptable safety case in relation to D1204? Is it likely that either remote or non-remote inspection of the dissolver and/or associated pipe-work will be required in preparation of the safety case? When will the safety case for D1204 be completed? When will the safety case for D1204 be presented to NII? In arriving at its costings in relation to D1204, what assumptions is UKAEA making at this stage as to the level of additional repair/renovation/improvement work which may be required in relation to making a safety case which is likely to be acceptable to NII? What margins for error are allowed in relation to work required to meet the safety case for D1204? What costs (other than those associated with putting right any faults found) will be associated with the preparation of a safety ca se in relation to D1204? Has UKAEA received notification from NII as to exactly what criteria they will be required to meet in providing an acceptable safety case in relation to Dounreay’s waste receipt and storage facilities? When will the safety case for D ounreay’s waste receipt and storage facilities be completed? When will the safety case for Dounreay’s waste receipt and storage facilities be presented to NII? In arriving at its costings in relation to Dounreay’s waste receipt and storage facilities, what assumptions is UKAEA making at this stage as to the level of additional repair/renovation/improvement work which may be required in relatio n to making a safety case which is likely to be acceptable to NII? What margins for error are allowed in relation to work required to meet the safety case for Dounreay’s waste receipt and storage facilities? What costs (other than those associated with pu tting right any faults found) will be associated with the preparation of a safety case in relation to Dounreay’s waste receipt and storage facilities? In which years would expenditure be carried out in relation to: (a) preparation of safety cases; (b) work to be carried out to meet safety cases? If the estimated costs are not known, how is it possible to negotiate contract details with ANSTO, without knowing what extra capital costs might be imposed by the NII for D1204, or for storage of spent fuel prior to reprocessing? Also, how is it possible for SEPA to come to a view on whether or not such work is justified? R19. How much would it cost to (a) replace the D1204 dissolver; (b) replace the associated pipework of D1204; (c) replace both together? R20. The recent UKAEA Annual Report states: "Dounreay has special facilities which give it a strength in the market for ... reprocessing of specialist materials and fuel, and we intend to exploit this market where we can. Such work defrays the costs of plant and infrastruct ure maintenance which would otherwise have to be paid for by the UK taxpayer." Can the items of plant and infrastructure maintenance (which relate to the reprocessing of specialist materials and fuel, and which would otherwise have to be paid for by the UK taxpayer) be listed, along with their associated capita l and operating costs? If any of these apply to the D1204 plant, does this imply that the D1204 plant would not close down if the Lucas Heights contract did not go ahead? R21. What would be the annual cost of mothballing the D1204 plant (ie. closing it down completely without any intention of future reprocessing, but delaying decommissioning)? Is it correct to say that the current NII st ance is that the D1204 plant cannot be mothballed? R22. Some of the Australian spent fuel is badly corroded due to water leakage. Will the corrosion of the spent fuel necessitate any extra capital expenditure, or increased operating costs, in any of transport, handling, storage, reprocessing, over the levels of cost originally envisaged in the UKAEA application ? R23. Where will the products of reprocessing be stored before packaging? Are the storage facilities for the products of reprocessing prior to packaging adequate? Has there been any recent investment in such storage faci lities in the period 1993 - 1997? Will any investment be required in the period 1998 - 2005? Has the cost of these storage facilities been included in the costings?
R24. UKAEA recently announced: "UKAEA Dounreay are close to letting some £10 million of new contracts and will be offering a further £6 million in competitive tenders ... In terms of the contracts under negotiation, the largest by far is for the design and building of an extension to the Dounreay Cementation Plant Store - for retaining packaged waste prior to the return to the customer or long term disposal." Has there been any recent investment in the Cementation Plant Store in the period 1993 - 1997? What is the precise cost of the Extension to the Cementation Plant Store? How will this be spread over the period 1998 - 2005? Has the cost of the extension to these storage facilities been included in the costings? If the Lucas Heights contract did not go ahead, what proportion of this future expenditure could be avoided? R25. SEPA has concluded that any waste arising from reprocessing of foreign fuel should be returned not later than 10 years after receipt, rather than the previously accepted figure of 25 years. In this context UKAEA has stated:< /P> "The decision will affect Dounreay’s business to some extent and is disappointing, given that, until customer waste is properly packaged, it cannot be returned and that, once properly packaged, it cannot cause environm ental pollution. We are now considering the implications for our operational flexibility, for our reprocessing business and for jobs at Dounreay." Does SEPA’s imposition of a 10-year rule mean that capital investment in packaging facilities will have to be brought forward? What capital investments are envisaged in packaging facilities? Operating costs R26. On operating costs in general, UKAEA state in evidence to SEPA: "It is not possible to make simple statements about individual plant costs since they use common support facilities and the additional costs of operating one often depends on what is happening in the others .&quo t;Why cannot UKAEA allocate projected common costs and overheads between plants and processes, as any other industry would be able to do? While there may be some uncertainty about which plants will be operating and which not, surely th ere is a forward business plan which can be used as a reference case? R27. Operating costs: transport to Dounreay What is the operating cost per shipment for transport from Lucas Heights to Dounreay? Will this be the responsibility of ANSTO? How many spent fuel rods will be carried per shipment? How many shipments are planned for each yea r from 1998 to 2005? R28. Operating costs: storage of spent fuel prior to reprocessing What annual operating cost is assumed for storage of spent fuel prior to reprocessing? R29. Operating costs: employee costs On jobs, UKAEA evidence to SEPA states: "About 50 direct jobs come from the MTR fuel reprocessing but ultimately some 400 jobs at Dounreay depend on its work in reprocessing radioactive material." Can the UKAEA give any information as to where the other 350 jobs are distributed? R30. Elsewhere the UKAEA states: "The work at Dounreay is labour intensive and, as examples, reprocessing in D1206 and D1204 secure about 200 and 50 jobs respectively." Applying this 4:1 ratio between D1206: D1204 to the 400 ‘ultimate’ jobs in the previous request gives a total of 80 jobs out of the 400 which arise ultimately from MTR fuel reprocessing. Can the UKAEA confirm whether this figure of 80 jobs arising ultimately from MTR fuel reprocessing is correct? If the figure is incorrect, what is wrong with the calculation, and what is the correct figure? R31. Operating costs: annual D1204 employee costs when reprocessing We know that employee costs are likely to be significant in relation to revenue. For example, SEPA states: "The revenue associated with this practice is estimated, from data supplied by the UKAEA, to be in the range of £100 million to £120 million over a 10-year period. The wage costs would be a significant unquantified pro portion of this... "At say £15,000 annual direct employment costs, and a multiplier of 1.33 for non-direct employment costs, this gives £20,000 per person-year. At the 80 jobs in the previous request, this gives £1.6 million per year for the total annual employee costs associated with D1204 reprocessing. Can the UKAEA confirm whether this figure is correct? If the figure is incorrect, what is wrong with the calculation, and what is the correct figure? R32. Operating costs: annual D1204 employee costs when NOT reprocessing The D1204 plant will have to be maintained on standby from now to start of reprocessing (2001, or as corrected in the response to request 3). In 1992, the AEA Fuel Services Product Service Manager (D. Thom) was quoted as follows: "... [D1204] is an expensive plant to maintain on standby - more than a million pounds a year." In 1997, the UKAEA stated: "The MTR reprocessing plant costs are low when not operating (less than £500 K per annum) because the operating team can be disbanded." How has the cost of maintaining D1204 on standby reduced so dramatically from more than a £1 million a year at 1992 price levels to less than £500,000 a year at current price levels? On the previous figure of £20,000 per person-year, the above range implies that between 25 to more than 50 jobs are required to maintain the MTR line if it is not reprocessing. Which figure is correct? Have such costs, from now to the start of reprocessing, been included in the costings? R33. The second quotation in the previous request implies that up to 55 (80 - 25) jobs are absorbed elsewhere in the plant. Where is the operating team disbanded to? Who does these 55 jobs when reprocessing recommences, if it does, in 2001? What training and other human resource costs have been factored in to allow D1204 to recommence reprocessing after a down-time of several years? During which years would such costs arise? R34. Operating costs: Raw materials and consumables A typical ratio is that raw materials and consumables are 50% of employee costs. Is the 50% figure about right for UKAEA? Applying this to the employee costs of £1.6 million per year in request 31 would give annual UKAEA Raw Materials and Consumables costs for reprocessing the Lucas Heights spent fuel rods of £800,000 per annum. Is this calculation correct? If the figure is incorrect, what is wrong with the calculation, and what is the correct figure? R35. Operating costs: storage of products of the reprocessing before packaging What annual operating cost is assumed for storage of the products of reprocessing before packaging - during a period of cooling after reprocessing of approximately three years? R36. Operating costs: costs of managing separated plutonium The cost of managing separated plutonium is significant. Will separated plutonium be one of the products obtained from the reprocessing of Lucas Heights spent fuel? Has the cost of managing such separated plutonium been incorporated in the costings? R37. Operating costs: packaging of the products of reprocessing prior to transportation What annual operating cost is assumed for packaging of the products of reprocessing prior to transportation? R38. Operating costs: storage of products of the reprocessing after packaging before transportation What annual operating cost is assumed for storage of the products of reprocessing after packaging before transportation? R39. Operating costs: storage of products of the reprocessing after packaging before transportation The operating costs in the previous request would be further reduced if wastes were returned immediately after packaging, rather than 10 years after receipt. Early return was supported by the SEPA Chairman, who was minuted as follows: "... if 5 years had been technically possible then he would have preferred the waste to have been returned then rather than within the 10 years being proposed. However, he felt that if, by the All Practicable Means cla use, the waste could be returned earlier, then that would be very desirable." A previous UKAEA paper has emphasised that the country receiving the waste does not have to have a waste repository in operation: "This [lack of a waste repository] is not a real problem as the cemented residue drum is also recognised as a form suitable for above ground interim storage." What obstacles stand in the way of a return of the packaged wastes in 2004 and 2005 (that is, 3 years after reprocessing and immediately after packaging in Cement Drums)? How could such obstacles be overcome? Surely such a timescale giv es ANSTO sufficient time from 1998 to construct a Cementation Plant Store to a specification identical to that of the UKAEA Cementation Plant Store Extension? R40. Operating costs: transport from Dounreay to Lucas Heights What volumes of what products will require shipment from Dounreay to Lucas Heights? What operating cost per shipment is assumed for transport from Dounreay to Lucas Heights? Will this be the responsibility of UKAEA? What will be the volumes of the relevant products per shipment? How many shipments are planned for each year from 2001 through to the planned year of last shipment? Financial risks R41. Any replacement of the D1204 dissolver and associated pipework may cost up to £15 million to £20 million. (The precise value should be given in response to request 19). Has the possibility that the D1204 dissolver and associated pipework might need to be replaced been factored into the costings? R42. What happens if major postponement or even cancellation is necessary to the reprocessing - for example, if the UKAEA is unable to complete the reprocessing work due to major failure of the D1204 plant? Are there any pen alty clauses in the proposed contract, and if so, what do they specify? Would the UKAEA still have to accept the full complement of fuel rods, as given in the response to requests 1 and 2? What extra storage costs would the UKAEA incur? Would any unreproc essed spent fuel at Dounreay be returned to ANSTO if it were not reprocessed? R43. Can it be confirmed that ANSTO is responsible for the shipment from Australia to Dounreay, and the UKAEA for the return shipment of waste from Dounreay to Australia. If a shipment went down in the waters of a third party (through accident or terrorist activity), would that third party be able to claim against ANSTO or UKAEA, depending on which was responsible for the journey in question? R44. The UKAEA faces the possibility of several areas of financial risk to the satisfactory completion of the contract, including some or all of the costs identified in the previous three requests. There is no mention in t he SEPA Consultation Volumes of such financial risks. What calculations have been made of such risks? Are private sector risk assessment methods being used? Have the costs of such risks been factored into the estimates on a probabilistic basis? In what proportions are the underwriting o f such risks borne by (a) ANSTO (b) UKAEA. Is the UK taxpayer subsidising this contract by accepting all the risk? Decommissioning R45. Decommissioning plan in the absence of reprocessing. The UKAEA evidence quotes in favour of reprocessing: "The benefit to the taxpayer who has to find around £70 million less in taxes to pay for the £500 million decommissioning programme in the next ten years." To which facilities does the £500 million figure relate? How is the £70 million spread over the ten years? How much of this relates to D1204? Over what period is the total expenditure of £500 million planned? How much of this relates to D1204? R46. Decommissioning plan if Lucas Heights reprocessing goes ahead. If Lucas Heights reprocessing goes ahead, would the decommissioning bill increase over £500 million? When would decommissioning be expected to start? Over what total period would the decommissioning now take place? What would be the expected expenditures over the first 10 years of decommissioning?
Final request R47. Please itemise, with their values, any other major sources of cost associated with further reprocessing using the D1204, which have not been covered by the previous requests. ANNEX A : CALCULATION OF A CONVERSION FACTOR FOR TRANSLATING FROM: TOTAL REVENUE PV FIGURES AT 6% TO: ANNUAL REVENUE FIGURES (£ MILLION A YEAR). The UKAEA figures declared to SEPA are Present Value (PV) figures of the entire revenue stream calculated at 6%. For a full appraisal it is necessary to convert these figures to annual revenue figures. Assumptions (a) The assumed discount rate is 6% per year. (b) The declared total Present Value of the revenue streams at 6% is £PV million. (c) The start date for revenue payments is 1999. (d) The finish date for revenue payments is 2004 (ie. lasts for 6 complete years). (The start date and finish dates for revenue payment need not necessarily coincide with the start and finish dates of reprocessing as specified in the response to Request 3) (e) Assume, for the purposes of this example, that the annual revenue is paid in equal instalments of £R million a year.
Resultant Conversion Factor from: total revenue PV figures at 6%; to: annual revenue figures (£ million a year). From Table A: £PV = £4.639 * R R = £0.216 * PV
Sensitivity The calculation can be readily repeated for different assumptions in (a) to (e). For example, the calculation may use any or all of:
SEPA NORTH REGION 27 January 1998 Dear Mr Sadnicki Second Consultation on the application by the United Kingdom Atomic Energy Authority for revised radioactive discharge authorisations at Dounreay. Reprocessing of spent overseas fuel: Requests for information. With reference to your request of 2 January 1998, sent to DTI, UKAEA and SEPA, I would inform you that SEPA does not have the information that you have requested. In your request you stated that it was your intention to elicit information which you anticipated would be readily available and would not cause any significant diversion of resources. As such we have not sought to carry out an exhaustive search of the many files held within SEPA or available to SEPA on which information relating to Dounreay is held. In any event the information you requested is concerned with the commercial activities of UKAEA and I believe that if this information is available, it would be held by either DTI or UKAEA, who I understand are addressing your enquiry. I have copied this reply to both DTI and UKAEA for their information. Yours sincerely
H S Fearn Department of Trade and Industry 2 February 1998 Dear Mr Sadnicki Thank you for your letter dated 2nd January requesting information concerning the reprocessing of spent Australian nuclear fuel at Dounreay. The President of the Board of Trade has asked me to reply on her behalf. I will also be replying on behalf of the Minister for Science, Energy and Industry, the Minister for Trade, the Minister for the Environment, the Chancellor of the Duchy of Lancaster and the Chief Secretary to the Treasury. Your request is receiving attention and I am currently preparing a response which I expect to be able to send to you within the next week or so. Yours sincerely A W Whitehead UKAEA 4 February 1998 Dear Mr Sadnicki You wrote to Dr Nelson on 2nd January. It was about the application for revised discharge authorisations, asking 47 questions, which were mainly about a possible contract with the Australian ANSTO company. Dr Nelson has asked me to reply. You should be aware that UKAEA is still in the process of negotiating this contract. You requested information under the Environmental Information Regulations 1992 and the Code of Practice on Access to Government Information, neither of which apply to UKAEA. You also cited the White Paper "Your Right to Know" which has no legal force in itself and may differ significantly from what eventually emerges as legislation. We are therefore under no legal or other obligation to provide the very detailed financial information which you have requested. We are discussing a contract with a customer and the financial details are confidential for commercial reasons. The details are not even finally established and we would be most embarrassed if the normal commercial confidentiality expected by any customer was breached by significant information being released into the public domain. We consider that your argument that considerations of commercial confidentiality should not apply between public sector organisations, in different countries, has no sound basis. Following established practice we have not given financial details of the prospective contract to SEPA. We take the view that it is not a necessary part of the process of reviewing our authorisation since an authorisation is granted to cover an extended period of time. In assessing justification the regulator must clearly take a broad view as to the likely balance of detriments and benefits of the practices which it is anticipated will contribute to the authorised discharges over the period. We would not expect SEPA to scrutinise the economics of a single contract as a basis for forming a view on justification. As you may be aware, there remains considerable scope for differences of view on what is involved in the concept of justification. ICRP 60 and the Basic Safety Standards Directive are expressed in terms which are compatible with the relevant "practice" being reprocessing of spent fuel in general. This is not a new practice and has long since been accepted as justified in broad terms. Mr Justice Potts took a narrower view in R. v Secretary of State for the Environment ex parte Greenpeace, although this has not been tested in the appellate courts. However, if his conclusion that justification should be site and process-specific is accepted, UKAEA has made available sufficient information to SEPA to enable them to take a view on justification. There is no suggestion in the judgement that details of specific contracts should have been disclosed. Furthermore, it should be noted that the reprocessing of MTR fuel in the facility in question is not a new practice, even if the financial basis on which it is carried on may vary from time to time. Taking all these considerations into account we have decided, therefore, not to send you the very substantial volume of financial and other information which you have requested. I can however give you the following general information which you might find helpful: · In the application for the revised authorisation, we quoted (page 271 of volume 2 of the SEPA consultation document) a disbenefit from discharges to the environment, attributable to commercial reprocessing, of 1.97 man-Sieverts of collective dose, which was allocated a health detriment value of £39,000. We have no reason to believe that this figure has increased. · The disbenefit in terms of the health detriment value quoted above will still be greatly exceeded by the economic benefit of reprocessing at all levels of operation because the two factors are roughly proportionate to the throughput. · The maintenance and upgrade costs for D1204 during the years 1993 to 1997 were greatly exceeded by the net financial income. I can give you a positive assurance that there is no financial subsidy to commercial reprocessing provided our work carried out for the UK government. · You will be aware that plant and equipment on nuclear licensed sites are subject to periodic review by the Nuclear Installations Inspectorate as part of their functions under the licensing regime. It is our judgement that no such review would require improvements which would adversely affect the justification for carrying out the ANSTO contract. I regret that it is not open to use to give a more comprehensive reply, for the reasons given. Yours sincerely
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