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Archived press release

Mox plant: a giant nuclear turkey

31 August 2001

OFFICIAL PLUTONIUM PLANT STUDY FUNDAMENTALLY FLAWED

Friends of the Earth and Greenpeace today said that an official investigation into the economic case for opening a controversial nuclear plant is fundamentally flawed and cannot be relied upon by Government.

Ministers are expected to decide in September if the £470M Sellafield MOX (Mixed Oxide Fuel) Plant(SMP) can go ahead. The factory in Cumbria was completed in 1996 but has been mothballed ever since because its owner, state owned British Nuclear Fuels plc (BNFL), has yet to satisfy the legal test governing radioactive impacts necessary to run it.[1]

Consultancy firm Arthur D Little Ltd (ADL) was hired by the Government earlier this year to reassess the economic case [2]. But in a detailed critique of that report forwarded to Ministers this week [3], the two environmental groups said ADL had failed to understand key aspects of the nuclear industry or to appreciate the conditions prevailing in the potential client countries that currently have plutonium stored at Sellafield.

Consequently, ADL's estimate that running SMP might net around £200M of revenue, is fundamentally flawed and cannot be relied upon by Ministers in deciding upon the SMP. Friends of the Earth and Greenpeace along with public interest groups in Japan and elsewhere are all calling on the Government to reject BNFL's application.

The specific failings of the ADL report include:

• the failure to understand the situation in Japan where, because of strong adverse public and political opinion, there is an effective moratorium on signing MOX contracts and on loading MOX fuel into reactors. The 1999 Tokaimura accident in which two workers were killed; the 2000 scandal involving the falsification of BNFL safety data; and the May 2001 local referendum result against MOX in Kariwa have all influenced opinion increasingly against nuclear power in general and against MOX in particular. This situation is highly unlikely to change in the time frames suggested by ADL and may not change at all;
• the failure to consider the additional costs of sea transport particularly in respect of Japan which represents a significant additional disincentive for potential customers;
• the failure to appreciate that MOX fuel is more expensive than conventional nuclear fuel (using just uranium) and is only being considered because BNFL and its clients need to find a use for the plutonium that accumulates at Sellafield as a result of reprocessing;
• the failure to recognise that safer and less expensive alternatives for managing plutonium are available, in particular, immobilisation in glass or ceramic. Market pressures are in general already pushing nuclear generators away from reprocessing into the dry storage of spent nuclear fuel and in particular, for separated plutonium, towards immobilisation;
• the apparent failure to apply the appropriate rates for the cost of capital and for discounting post-operational liabilities, the combined effect of which is to overvalue the plant's business case by an estimated £74million;
•  the failure to interview MOX specialists outside the nuclear industry, including the failure to respond to written questions and the failure to respond to earlier submissions. The result is that,by only discussing MOX with its supporters, ADL's judgements about future business risks are grossly simplified and over optimistic;
•  and finally, the failure to include “sunk costs” of £473M already spent on constructing and preparing SMP. This has the effect of skewing the 'justification' test required under law.Including “sunk costs” clearly demonstrates that SMP will make a massive loss.

Taking all factors into account and using realistic assumptions about future risks, the reevaluation of SMP's current net value is around zero. In other words, the revenue from a few small contracts might not even cover the costs of running and then dismantling a radioactively contaminated plant.

Mark Johnston, Energy Campaigner at Friends of the Earth said:

“The ADL report has been a waste of money. It is misinformed and ill-judged in so many areas that it cannot be used as the basis of an informed decision by Ministers in favour of SMP. We believe the only lawful course of action now available to the Government is to reject BNFL's application. To do otherwise would risk further legal challenges in the courts.”

Pete Roche, Nuclear Campaigner at Greenpeace said:

“Plutonium is a deadly fissile material that carries risks over time scales beyond our imagination. It's time the Government started acting responsibly by taking the steps that will minimise the huge risks and costs to society in the future.”

NOTES TO EDITORS

[1] MOX is manufactured into fuel pellets from a mixture of uranium oxide and plutonium oxide, which can then be loaded into a nuclear reactor to generate electricity. It is a new practice at Sellafield. Under European law, any new practice involving radioactive discharges has to pass a legal test of “justification” in which the benefits(e.g.revenues) are weighed against the detriments (e.g. environmental pollution or contaminated plant). BNFL proposes the justification test be carried out after having written off all the costs incurred to date (£470M). This,FOE argues, is improper and therefore unlawful (as well as being contrary to common sense!).

[2] Arthur D Little (ADL) was commissioned by the Government in April 2001 to evaluate the economic case for operating SMP and completed its report in June. Reevaluation of the case was deemed necessary to take into account the consequences of the MOX safety data falsification scandal in 1999 which damaged confidence in BNFL amongst its customers. Minister's original intention was to keep ADL's work secret until the final decision on SMP was announced. However, on 24 May Friends of the Earth launched proceedings in the High Court to force the ADL report into the public domain. On the 21 June, the Government conceded and a four week public comment period began on 27 July.

[3] The analysis was undertaken by Mike Sadnicki, a consultant in Operational Research and economic analysis.Mr Sadnicki is also a member of the UK Radioactive Waste Management Advisory Committee which advises the Government on nuclear issues. He was in this instance acting in a personal capacity. His report is available from FOE on request.

If you are a journalist seeking press information please contact the Friends of the Earth media team on 020 7566 1649.

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