Nuclear Decommissioning Authority Business Plan 2011-2014. Nuclear Decommissioning Authority Business Plan. 2011-2014 Business Plan presented to Parliament pursuant to Schedule 3 of the Energy Act 2004. Business Plan presented to Scottish Parliament pursuant to Schedule 3 of the Energy Act 2004. M arch 2011 London: The Stationery Office £15.50 Some images supplied courtesy of site licence companies. Every effort is taken to ensure the accuracy of material or images produced or used by the NDA. However, the NDA cannot guarantee that the images shown will always be current, accurate or complete and does not warrant or endorse the accuracy or completeness of the images. © Nuclear Decommissioning Authority (2011) The text of this document (this excludes, where present, the Royal Arms and all departmental and agency logos) may be reproduced free of charge in any format or medium providing that it is reproduced accurately and not in a misleading context. The material must be acknowledged as Nuclear Decommissioning Authority copyright and the document title specified. Where third party material has been identified, permission from the respective copyright holder must be sought. This publication is also available for download at www.official-documents.gov.uk. ISBN: 9780108510540 Printed in the UK by The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office ID: 2423380 03/11 Printed on paper containing 75% recycled fibre content minimum. Our mission is to: Deliver safe, sustainable and publicly acceptable solutions to the challenge of nuclear clean up and waste management. This means never compromising on safety or security, taking full account of our social and environmental responsibilities, always seeking value for money for the taxpayer and actively engaging with stakeholders. Nuclear Decommissioning Authority Business Plan 2011-2014 Contents Foreword 4 Introduction 5 Our Funding 6 Our Approach to Strategy and Delivery 7 Strategic Themes Summary 9 Appendix 1 - NDA Sites Location Map 12 Appendix 2 - The Six Site Licence Companies (SLCs) 13 Appendix 3 - Site Summaries 14 Sellafield Limited SLC 14 - Sellafield 14 - Calder Hall 14 - Windscale 14 - Capenhurst 14 Magnox Limited SLC 18 - Berkeley 20 - Bradwell 21 - Chapelcross 22 - Dungeness A 23 - Hinkley Point A 24 - Hunterston A 25 - Oldbury 26 - Sizewell A 27 - Trawsfynydd 28 - Wylfa 29 Dounreay Site Restoration Limited SLC 30 - Dounreay 30 Research Sites Restoration Limited SLC 32 - Harwell 33 - Winfrith 34 LLW Repository SLC 35 - LLWR 35 Springfields 37 Appendix 4 - NDA & RWMD 38 Appendix 5 - Planned Income and Expenditure Summary 40 Appendix 6 - NDA Subsidiary Companies 42 - Direct Rail Services Limited 42 - International Nuclear Services Limited 42 - NDA Properties Limited 43 - Rutherford Indemnity Limited 43 Appendix 7 – Response to Consultation 44 Glossary 45 References 46 NDA Business Plan 2011-2014 Published by the Nuclear Decommissioning Authority, March 2011 Copyright © Nuclear Decommissioning Authority 2011 3 Nuclear Decommissioning Authority Business Plan 2011-2014 Foreword This Business Plan has been approved by the Secretary of State jointly with the Scottish Ministers as required by the Energy Act (2004 (ref 1). The importance of the NDA’s decommissioning and clean-up mission has been recognised in the funding provided via our sponsoring UK Government department – Department of Energy and Climate Change (DECC), in the latest spending review. The direct grant provided by the UK Government – together with commercial income will allow an average expenditure of close to £3 billion per annum over the next four years. In the current tough economic environment of widespread cuts in funding across UK Government this represents a positive outcome for the joint working of all stakeholders over the last 18 months through the Spending Review (SR) process. The full impact of the settlement on what can be achieved over the next three years will require further analysis over the coming months and it is likely there will have to be deferral of some scope that may have been anticipated to commence before the current economic dip. It is not anticipated that there will be major changes to the direction outlined in previous plans. We will see continued focus on high risk and hazard plants at Sellafield, the adoption of an optimised approach at Magnox, a new target cost commercial arrangement at Dounreay, the implementation of the Low Level Waste strategy at the Low Level Waste Repository (LLWR) and optimising the care and maintenance regime at Harwell and Winfrith. The settlement represents a vote of confidence from Government in the mission of the NDA and all of the activities that sit behind it. Our response will be to sustain and strengthen our drive to deliver value for money and continued reduction in support and overhead costs. To deliver the promised work we must crystallise the improvements in efficiency and performance that underpin our funding settlement. Our increasing focus on delivery has been reflected in the changes made to the NDA organisation in the last year. The NDA delivers its mission primarily through our SLC’s, who will have increased delegated authorities to support this approach. The restructuring of the NDA Executive Team has been completed with the appointment of David Batters as Chief Financial Officer (CFO), Mark Lesinski as Executive Director – Delivery, Adrian Simper as Director – Strategy & Technology and Sean Balmer as Commercial Director. Our long-term objectives and strategic direction are outlined in our March 2011 Strategy which has been approved by the Secretary of State jointly with the Scottish Ministers as required by the Energy Act (2004) (ref 1). Tony Fountain Chief Executive 4 Nuclear Decommissioning Authority Business Plan 2011-2014 Introduction This Business Plan sets out our key objectives and plans for delivering our priorities over the next three years. Our remit The NDA is a Non-Departmental Public Body (NDPB) set up under the Energy Act (2004) (ref 1) to ensure that the UK’s 19 civil public sector nuclear sites are decommissioned and cleaned up safely and efficiently. Our progress is monitored by the Shareholder Executive on behalf of our UK Government sponsoring department, DECC, and the Scottish Government who measure our performance against our Strategy and plans. DECC and the Scottish Government have a target to make tangible progress in decommissioning and clean-up demonstrated by a reduction in UK civil nuclear liabilities and of the risks associated with high hazards (by progressively mitigating hazards and ensuring radioactive waste continues to be put into a passively safe form) in line with published NDA business plans. Progress on these activities is reported in our Annual Report and Accounts. Delivery of the mission Each of our 19 sites is operated by one of six SLCs under contract to the NDA. SLCs are responsible for day-to-day operations and the delivery of site programmes. Parent Body Organisations (PBOs), selected through a competitive process, own the SLCs for the duration of their contract with the NDA and earn fee based on performance. 5 Nuclear Decommissioning Authority Business Plan 2011-2014 Our Funding Funding Framework We are funded by a combination of direct UK Government grant and income from commercial operations. Government Funding The latest Spending Review has secured outline UK Government funding for the next four years (April 2011 to March 2015) – See Appendix 5. Commercial Income Our commercial operations fall broadly into two areas: - electricity generation and associated trading - spent fuel management, including reprocessing and manufacture of Mixed Oxide Fuel (MOX) The nature of our commercial activities means that we have to manage a degree of income volatility, largely due to our operations relying on ageing assets and infrastructure. Furthermore, this income will decline in future years as plants close and enter decommissioning. In the meantime, we will strive to maximise revenue from our existing assets and operations to help fund decommissioning and clean-up, thereby reducing the burden on the UK tax-payer. This will include optimising income from electricity generation, leasing property, selling land and other assets in response to market interest. Prioritisation and allocation of funding As commercial income declines, there will be an increasing reliance on direct UK Government funding where expenditure cannot be reduced. Within affordability constraints, we will seek to maintain progress and maximise value for money by focusing on the highest hazards and risks and by seeking to prioritise funding where possible, while ensuring that safe, secure and environmentally responsible site operations are maintained across our estate. The Spending Review process used criteria drawn from our Value Framework to evaluate options. These criteria; Affordability (short, medium and long-term), Value for Money, Safety, Security and Environmental Impact, Deliverability, Socio-Economic and UK Government Policy Impact, will inform the management decisions to be taken in the process of allocating available funding over the Business Plan period. Planned income and expenditure in 2011/2012 This Business Plan sets out our anticipated income and expenditure for 2011/2012 in line with the settlement agreed in the 2010 Spending Review. Our total planned expenditure for 2011/2012 is £2.9 billion, of which £2.0 billion will be funded by UK Government and £0.9 billion by income from commercial operations. Planned expenditure on site programmes will be £2.7 billion, while non-site expenditure is expected to be £0.2 billion. This non-site expenditure includes skills development, socio-economic, Research and Development (R&D), insurance and pensions costs, fees to SLCs, implementing geological disposal and NDA operating costs along with the other activities detailed in Appendix 5. 6 Nuclear Decommissioning Authority Business Plan 2011-2014 Our Approach to Strategy and Delivery Building on our experience of the last few years, we now group our work under the following six strategic themes: Site Restoration - defines our approach to decommissioning and clean-up of redundant facilities and how we manage contamination in ground and groundwater. Restoration will drive our sites through a series of Interim States to a Site End State, at which point the NDA is able to release the site for other uses. Spent Fuels - defines our approach to managing the diverse range of spent nuclear fuels for which we have responsibility, including Magnox, oxide and exotic spent fuels. Nuclear Materials - defines our approach to dealing with the inventory of uranics and plutonium currently stored on some of our sites. Integrated Waste Management - considers how we manage all forms of waste arising from operating and decommissioning our sites. Business Optimisation - looks at how we maximise our commercial income, using our assets and capabilities to reduce the net cost of decommissioning and clean-up to the taxpayer. Critical Enablers - supports the overall delivery of our mission and, in some cases, reflect the supplementary duties assigned to the NDA by the Energy Act (2004) (ref 1). In most cases these are not matters in which we have the lead role, but where we need to take a view and ensure that appropriate action is being taken. Time 7 Nuclear Decommissioning Authority Business Plan 2011-2014 The previous figure illustrates the interaction of the six strategic themes showing Site Restoration as the driving theme supported by Integrated Waste Management; the need to manage Spent Fuels and Nuclear Materials as an early part of Site Restoration; Business Optimisation raising revenues where appropriate; and with the entire mission underpinned by the Critical Enablers. Time passes from left to right. This view of our activities means we can draw on the experience from across the entire estate to focus on new ways of tackling our priorities. This approach will help us in: - taking a more holistic view of all our activities - understanding the impact of different strategic scenarios, e.g. deferral or acceleration of work in certain areas - monitoring and reporting of progress across our estate Throughout this document, colour coding is used to indicate the strategic themes. The Business Plan is structured to reflect the strategic themes and organising our work in this way has already provided clarity and a consistent basis for communicating with contractors and stakeholders. There is a great deal of interdependence between its strategic themes. There is, therefore, limited discretion to stop activities under a particular theme without wider implications. This includes impacting critical national infrastructure that serves the wider nuclear industry such as electricity generation, fuel manufacture, reprocessing and waste treatment, storage and disposal services. 8