Energy Bill

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Clause 63

6.45 pm
Martin Horwood: I beg to move amendment No. 39, in clause 63, page 50, line 14, at end insert—
‘“disposal” for solid nuclear wastes (including nuclear materials declared as waste) means emplacement in a long term storage facility;’.
The amendment seeks to define carefully “disposal”, which is not currently in the list of words defined in clause 63. “Disposal” is important because it crops up earlier on in the Bill, in clause 41. It is one of the technical matters, along with “treatment”, “storage” and “transportation”, covered by the funded decommissioning programmes. Such technical matters, which the funded decommissioning programme must contain, include details of the steps to be taken and estimates of the costs likely to be involved. That is crucial and central to the whole programme of funded decommissioning programmes.
We might think that “disposal” was a fairly straightforward concept, which just means getting rid of the nuclear waste. However, nuclear waste does not really go away in that sense. We all know that we cannot just dispose of it in landfill—or perhaps we are dealing with a variation of landfill. I raised the matter during the evidence sessions with Dr. Roxburgh, who gave evidence for the Nuclear Decommissioning Authority. He talked about waste disposal being included along with the cost of decommissioning—
“so the complete life cycle cost would have to be recovered”—
in other words, recovered from the private operators. I asked, to be clear:
“By long-term life cycle, do you mean thousands of years in the future, potentially?”
We are talking about the complete life cycle of nuclear materials here. He replied:
“In the sense that once waste is placed in a deep geological repository, I assume that it becomes a property of the Government, or at least that it is on some sort of lease. That issue has yet to be addressed”.
So, strangely, it suddenly becomes rather unclear whether “disposal” in the terms of the Bill as currently defined means disposal by and at the expense of the private operators, or whether there is emerging some new kind of public taxpayer liability, albeit a long distance into the future. I asked Dr. Roxburgh:
“So you are expecting there to be no costs attached to that that will not be covered.”
He replied:
“You will have to ask the Government about that.”——[Official Report, Energy Public Bill Committee, 5 February 2008; c. 59, Q112-114.]
That is what I am doing right now.
Is “disposal”, in the terms of the funded decommissioning programmes, being interpreted—perhaps hopefully by the Government—as simply taking the lorry to the gate of the long-term storage repository? Or is it, as our amendment would make the Bill clearly state, talking about emplacement within it? That is critical, because the long-term storage repository is not simply a neutral facility but something that the Minister himself described as perhaps remaining uncapped and potentially accessible for as long as a century. Potentially, I suppose, if future Governments, in a century’s time, thought it was unsafe to cap it completely and make it inaccessible. They might choose to leave the repository uncapped and maintained at some minimum level long into the future. We can imagine that, on the kind of time scales that we are talking about, even a low level of maintenance could rack up quite a bill for the taxpayer. Even the light bulb in a “Keep out” sign maintained for thousands of years would add up to quite a substantial cost to the public purse. These are serious issues.
When I was in legacy fundraising for Oxfam, occasionally people left substantial gifts to Oxfam in their will. The legacies quite often came with a little proviso that we, for instance, maintained a headstone in perpetuity, because people wanted graves maintained. We are talking about a different kind of grave here, but the risk is the same. Oxfam always removed that provision, by deed of variation, from those wills, because over time those costs build up—they add up to a significant long-term storage liability, to take the analogy a bit tastelessly far. I want to extend that principle to the Bill and make it absolutely clear that the Government are not allowing the Bill, by a small loophole of definition, not to mean actual disposal in the long-term geological repository. The cost of doing that for new nuclear power stations should be recovered from the operators, as was the intention and as was the sense of the Government’s and the Opposition’s statements.
I know that the Government think that the legacy programme bears some kind of responsibility for the long-term repository, and that in some strange way it is paid for by the taxpayer on a more reasonable basis, because the legacy programme exists and we have to work out what to do with the waste. That is true, but over a very long time that will even out considerably. If the nuclear programme continues into the future, in time, the original legacy programme waste will be a minor part of the nuclear waste being disposed of. Therefore, before the Government go down the path of building new nuclear power stations, it is important to establish the principle that the cost of very long-term storage will not be borne by the taxpayer.
Malcolm Wicks: On at least two occasions I have had the opportunity to specify what costs will be paid for by the company. Let me approach the issue again. The Government are tackling the waste issue, and we recognise the importance of continuing to make progress on waste management and disposal. We set out, in the nuclear White Paper, our policy for managing and disposing of waste from new nuclear power stations. The Government believe that it is technically possible to dispose of new higher-activity radioactive waste in a geological disposal facility. That is a viable solution and the right approach for managing waste from new nuclear power stations.
The Government consider that it would be technically possible and desirable to dispose of both new and legacy waste in the same geological disposal facilities. That should be explored through the Managing Radioactive Waste Safely programme. We also consider that waste can and should be stored in safe and secure interim storage facilities until a geological disposal facility becomes available.
In the draft guidance on funded decommissioning programmes, we acknowledged that operators would need certainty over the date when they can pass the liability for their intermediate-level waste and spent fuel over to the Government for disposal—that is the nub of the question. To meet that need, we will agree a schedule with each operator for when title to and liability for waste and spent fuel will pass to the Government. That schedule will be based on a conservative view of the estimated dates of availability of disposal facilities, and it will not begin until the operator’s decommissioning programme has been completed.
I described earlier our approach to setting a fixed unit price for the disposal of intermediate-level waste and spent fuel. I highlighted that it was right and proper that the Government should bear the risk of building a geological disposal facility, since we would need to do it to dispose of our legacy waste regardless of the position on new build. New build operators will have no influence over the project to deliver the geological disposal facility, so it is right that they should not bear the open-ended risks of delay to the project.
Martin Horwood: Will the Minister give way?
Malcolm Wicks: Let me proceed, as I think that it might help the hon. Gentleman. My first few attempts have not helped him but this one may.
It is equally right and proper that operators pay for the certainty that they will get over their costs for the disposal of intermediate-level waste and spent fuel. The fixed unit price that operators pay will include a significant risk premium to cover the risk that geological disposal facilities will not be available according to the schedules agreed with operators. Operators will be expected to dispose of low-level waste promptly in the facility currently operating in west Cumbria or a successor facility. We will not set a fixed unit price for the disposal of low-level waste.
Let me emphasise something about who owns waste once it is placed in a geological repository. The Government will take title of the waste at a date or a schedule agreed with the operator at the same time as their funded decommissioning programme is approved and alongside setting a price for the waste disposal service. We expect the schedule to be aligned to the estimates for availability of disposal facilities, whatever those estimates are at the time that operators come to the Government for a firm view on a fixed price and would not begin until after the operators’ decommissioning programme had been completed. The issue is clear: up to a certain point in the process, the company must meet the full costs. That has been much of the burden of our discussion today. However, given that the waste will lie there for a very long time, there will come a time when the title to that waste and the responsibility for it passes from the company to the Government.
Martin Horwood: I am grateful to the Minister for his reply. I understood the earlier explanations about having a fixed unit cost attached to bringing the waste to the Government and effectively passing the title and the liability over to them. However, will that cover the cost of long-term storage with regard to new nuclear? The Minister suggested that the new nuclear industry should not bear any part of the cost for the repository because it would be needed for the legacy waste. I do not really accept that.
Let us imagine—and I hope that this does not happen—that the new nuclear industry continues for many years into the future. It could become the largest contributor to that geological repository in terms of the overall amount of waste being stored in it, and that will increase exponentially over time if the nuclear industry continues. Why should not the new industry contribute towards the cost of establishing that repository as it will be for their use? It will be a public subsidy in effect, as it will provide them with free, very long-term storage.
There is also the assumption that the repository will never be full and that it can never run out of capacity for new nuclear waste. At this moment, we have no idea where that repository will be or what form it will take. Therefore, we have no idea whether that will be the case or whether, at some stage in the future and having established the principle that the Government will pay for repositories, public funds will yet again be used to make a new repository entirely to cope with new nuclear waste.
Mr. Reed: I think that what I will say might help the whole Committee in its interpretation of the hon. Gentleman’s amendment. It is to do with the amount of radioactive material that will be stored from a new fleet of reactors in a future repository. All the estimates, which are credible, reliable projections, are that if we were to replace all of our current fleet with a new fleet of nuclear reactors and those reactors were to run for their lifetimes—the lifetimes in this period are assessed as 60 years, not 40 or 50—the overall waste inventory in the country would increase by less than 10 per cent. The assessment and judgment is that it would grow by approximately 8 per cent, so we would need 8 per cent. more capacity within a repository.
Martin Horwood: I am grateful to the hon. Gentleman for his technical knowledge on the issue. I assume that he talks about the volume of waste in that respect. However, surely the important thing when disposing of nuclear waste is not its volume, but its radioactivity. I am not sure that that answer is very reassuring.
Mr. Reed: In terms of cost, which is the issue that we are addressing here, the volume is the all-important thing. In terms of the repository, when we come to look at design safety, the radioactivity is not that relevant.
Martin Horwood: I am grateful to the hon. Gentleman— he reassures me to some extent. However, even 10 per cent. of the cost does not seem to be unreasonable if that turned out to be the situation. Why should not 10 per cent. of the cost of what, I presume, is a very expensive exercise in building a long-term geological repository be recovered from the nuclear industry?
Malcolm Wicks: Act one is where we accept that we have a legacy problem. I have still not worked out whether the Liberal Democrats agree that we have such a problem and have to bear the costs of that from public funds. In an era of new nuclear, we have said that, as far as reasonably possible, we will do out utmost to ensure that the full share of new nuclear waste is paid for by the companies—it is not just about the decommissioning, and attendant costs.
I want the hon. Member for Cheltenham to hear this point, as I think that it will satisfy him. Given that the geological repository will need to be larger than a repository for only the legacy of nuclear waste—although, as he says, people can exaggerate how much space is required—we have said that new build operators will pay a contribution to the fixed costs of the geological repository as well as the costs directly attributable to them. I hope that ensuring that operators pay their full costs shows our good faith, but there will come a time, if only for the sake of the important consideration of national security, when the state will take over responsibility.
Martin Horwood: My background is in business as well as charity. The Government have the only facility available and a captive market of nuclear companies wishing to dispose of their waste. Why stop at new nuclear companies when private companies are producing waste at existing nuclear power stations? Should the investors in those private companies not be expected to contribute some of the cost of long-term geological repositories?
The market price commanded should be more than enough to guarantee that any long-term costs will be more than covered. I am not clear from the technical advice given by the hon. Member for Copeland exactly how much of the cost is expected to be covered, or how the 10 per cent. will be calculated. It is difficult to imagine how we could calculate the cost far into the future. If the repository is to be maintained for 100 years or so, and the nuclear industry continues, perhaps with other nuclear power stations replacing the 60 years’ worth that we have immediate plans to build, how can we have the idea that it should somehow ultimately be a long-term Government liability? Why can we not make it a liability on private companies?
Malcolm Wicks rose—
Martin Horwood: I shall give way to the Minister if he has news for me.
Malcolm Wicks: Is the hon. Gentleman seriously suggesting that in 3 million years’ time, companies should still have a financial liability? Despite his great background in business and charity, must not common sense come into the debate at some time?
Martin Horwood: Of course, if one is producing a product that cannot be disposed of for 3 million years, one must be very careful about the cost of doing so. That is all that I urge on the Government.
The Minister said that a risk premium might be included in the fixed unit costs for disposal, but that that was to guard against the possible unavailability of repositories. Presumably, the long-term costs of maintenance have not been factored in. Dr. Roxburgh did not answer that question for me, and nor has the Minister. What calculations have been made about the likely long-term maintenance of any uncapped storage repository, and is it intended that the costs should be entirely recovered from the unit costs, either by way of a bond or insurance premium or through some other financial mechanism? We are simply trying to establish whether the Bill contains yet another loophole to bring in a public taxpayer liability by the back door, or whether we are taking every possible step to ensure that all the long-term costs that might emerge will be met by the nuclear industry.
The Chairman: The hon. Gentleman must indicate whether he wishes to withdraw his amendment or press it to a vote.
Martin Horwood: In the light of the lack of support from Committee members of other parties, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: No. 2, in clause 63, page 50, line 18, at end insert ‘or Northern Ireland legislation’.—[Malcolm Wicks.]
Clause 63, as amended, ordered to stand part of the Bill.
Further consideration adjourned.—[Alison Seabeck.]
Adjourned accordingly at five minutes past Seven o’clock till Thursday 6 March at Nine o’clock.
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