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Law & Policy

Nuclear Law

Nuclear Law: The Law Appling to Nuclear Installations And Radioactive Substances In Its Historic Context 2nd edition by Stephen Tromans (Hart Publishing) This book is a practical guide to the international, EC and UK law applying to the various uses of nuclear energy and radioactive substances. The first edition was produced in 1997, and given the renaissance of interest in nuclear power in the UK and worldwide, this new, updated and much expanded edition is timely. It covers the law relating to the permitting and operation of nuclear power stations, the decommissioning and clean-up of former nuclear facilities, radiological protection, the management of radioactive waste and spent fuel, liability and insurance, and the security and transport of radioactive materials. Readers will find a clear framework explaining the development and application of nuclear law, and how domestic law is based on and influenced by international and European requirements and by its historical context. In the commercial context, the chapters dealing specifically with new build and with decommissioning will be vital reading.

This book is a very much expanded version of The Law of Nuclear Installations and Radioactive Substances which was published in 1997, and which set out to provide practical commentary on the two key pieces of legislation: the Nuclear Installations Act 1965 and the Radioactive Substances Act 1993. During the intervening period these two acts have remained the cornerstones of regulation in the UK, but the context within which they operate has changed markedly. Perhaps the main change has been the renewed interest by some countries, among them England and Wales, in the construction of new nuclear power stations. In his prescient Foreword to the 1997 work, Lord Lewis of Newnham pointed to the need for the hazards associated with carbon dioxide production from fossil fuels to be set against the longer-term problems of nuclear waste disposal in the debate on the future of nuclear energy. This has proved to be the case—along with domestic energy security, the reduction in emission of greenhouse gases has provided the impetus for policies favouring new nuclear build. Hence the inclusion in this book of chapter 5, dealing specifically with this topic. The stark reality for the UK as at Christmas 2009 was one of sharply declining North Sea gas output, and heavy reliance on imported gas as an energy source, much of it imported by ship in liquid form. Yet at the same time, the economic conditions must be right for the massive commercial investment necessary to develop nuclear power stations: in the order of £2.7 billion to build a new 1,000 MW station. The inconclusive outcome of the December 2009 UN Copenhagen summit on climate change and the consequent lack of certainty as to the future price for carbon emissions will have been very unhelpful in this regard. A coherent national energy policy, underpinned by a simple carbon tax to create long term certainty for investors in low—carbon technologies, is becoming ever more acutely necessary, if secure energy supplies at stable prices are to be achieved, and carbon emissions are to be cut in compliance with existing targets.

Another major area of legal and policy development has been the decommissioning of former nuclear facilities, with the initiation of a multi-billion programme and the creation of a new body of central importance, the Nuclear Decommissioning Authority. This aspect, together with the inception of an entirely new regime for the clean-up of radioactively contaminated land, is covered in new chapter 11. The ever-growing importance of international and European Community law as the driving forces behind domestic law on nuclear safety and radiological protection are reflected in chapters 2 and 3, again almost entirely new material. Sadly, events since 1997 have also necessitated a much more intense focus on the issues of nuclear safeguards and security, a topic barely touched on in the original work, but now the subject of extended analysis in chapter 8. Other areas have not stood still by any means, and the chapters dealing with nuclear site licensing, liability and insurance, the use of radioactive substances and the disposal of radioactive waste have all been heavily revised and expanded. An emphasis which I have sought to retain is the provision of sufficient historical and technical material to put the current law into a more clearly understandable context.

One problem is of course that with such a multi-faceted and fast-moving subject there is no ideal time for publication and any text can only form a snapshot of the landscape at a particular point in time. In this case, the text was delivered to the publishers on 19 August 2009, and hence cannot include a number of developments after that date. To assist the reader, a brief overview of such developments follows this Preface. Particularly problematic has been the continued uncertainty as to the timing of changes to the regime for regulating radioactive substances and waste so as to bring these matters within the general environmental permitting regime, and the UK's approach to implementing revisions to the Paris Convention on Third Party Liability. It appears that such developments may occur during 2010, but to await them before finalising the text would have meant that the book would not have been available to those needing it during 2010 for areas such as new build and decommissioning. The author's decision on timing has therefore been a compromise, but heavily influenced by the large number of readers of the 1997 work who have made clear their views that an updated version is overdue and should not be delayed.

At the time of electricity privatisation, the long-term future of nuclear power in the UK was uncertain. The Government decided, therefore, to impose a moratorium on further new nuclear construction in the public sector at least until 1994, pending review of the prospects for nuclear power. Existing nuclear power stations were to continue to operate, as described above, and the construction of existing projects was to be completed. The Government published the conclusions of its nuclear review in a White Paper in May 1995 entitled 'The Prospects of Nuclear Power in the UK'. This involved consideration, with the help of a number of professional advisers, of the feasibility of privatisation of the nuclear generating companies, the prospects for introducing private sector finance for the nuclear industry, the most appropriate way of managing nuclear liabilities, and the strength of the case for new nuclear construction.

The Government's policy towards nuclear power, as expressed in the 1995 White Paper, was essentially non-interventionist. Its aim was to secure diverse and sustainable supplies of energy at competitive prices; an aim best achieved, in the Government's view, through the operation of open, competitive markets. The Government therefore proposed to leave the market to take decisions about the relative merits of new electricity generating projects; The Government's position, expressed at paragraph 3.43 of the White Paper, was summed up as saying that nuclear power plays a key role in meeting the UK's energy needs and should continue to do so, 'provided it maintains its current high standards of safety and is competitive'. On the issue of competitiveness, Chapter 4 of the White Paper considered the commercial case for new nuclear power stations. The test adopted by the Government was that a new nuclear power station may only be considered genuinely commercial if it is capable of attracting investment on the same terms as comparable projects in the private sector (the current comparable projects being gas-fired combined cycle gas turbine (CCGT) power stations). On the basis of information provided by the nuclear industry, the Government concluded that the best economic case for a nuclear power station in the short term would be

a twin PWR at Sizewell C, and that in current market conditions and at current prices for gas, it was unlikely that such a project would provide a rate of return competitive with a CCGT station. The Government emphasised in the 1995 White Paper that this was simply .a snapshot of the position at this particular point in time' and that various factors could change that balance. On strategic environmental issues, the Government's conclusion was that new nuclear stations were not required in the near future on emissions abatement grounds. Coming to this conclusion, the Government took account of existing nuclear power stations which play a significant role in helping to meet the UK's current commitments regarding the limitation of carbon dioxide emissions. It also recognised that there could be problems in meeting such targets if existing nuclear power stations were not replaced by other generating facilities which do not emit carbon dioxide when they reached the end of their working lives.

In the intervening decade since 1995 the political balance has swung in favour of the nuclear option. For one thing, of the 19 reactor units in the UK generating one fifth of its electricity, all but one (Sizewell B) will have closed by 2023. This raises the alarming prospect of a serious gap in energy supply. It is striking that so much of the UK's capacity now rests on an obsolete and much criticised technology (AGR) with reactors built during the 1970s and 80s, which can be expected to have increasingly difficult technical problems as they reach the end of their operational lives. The UK typically imports 3 per cent of its electricity from French nuclear power stations via the Interconnexion France Angleterre, the 45km sub-sea interconnector installed in 1986, but clearly cannot rely on such imports.85 Carbon-based energy supply and delivery look increasingly precarious and vulnerable to political threats. Nuclear power offers a potential means to allay those fears and to make significant progress towards carbon emissions reduction targets, thereby hitting two of the most obvious energy policy problems facing modern politicians: security of supply and climate change. It is not the only solution, nor is it risk-free,87 but it increasingly appears an attractive option politically, and one which may be acceptable to the public. In that sense, it may be true, as has been said, that 'nuclear needs climate change more than climate change needs nuclear'.88 In any event, the political climate in the UK has moved markedly in favour of significant expansion of nuclear generating capacity, as described

further in chapter five. Just how far it has shifted can be seen from the Cabinet Office pub lication, The Road to 2010: Addressing the Nuclear Question in the Twenty-First Century, published in July 2009.89 Whilst aimed principally at the UK's strategy in respect of the 201(i Nuclear Non-Proliferation Treaty, it leaves the reader in no doubt as to the Governments views on the benefits of nuclear power:

Nuclear power is a proven technology which generates low carbon electricity. It is affordable,' dependable, safe, and capable of increasing diversity of energy supply . . . Nuclear power is therefore an essential part of any global solution to the related and serious challenges of climate change and energy security. Combating climate change, the single greatest threat to humanity this century, requires a much greater role for low carbon fuels in the global energy supply than before. Rising global energy demand, which is forecast to increase by more than 40 per cent by 2030, means that secure, sustainable energy supplies will be key to global security and prosperity in the century ahead. Nuclear energy is therefore vital to the challenges of sustaining global growth, and tackling poverty ... That is why the United Kingdom Government believes not only that there is a recognised right for all sovereign states to the peaceful use of nuclear power, but that it is necessary to expand access to civil nuclear energy.

This enthusiasm for nuclear technology, almost certainly unparalleled since the heady days of the 1950s, has manifested itself in various ways in practical and commercial terms. There has been strong commercial interest in new nuclear projects from foreign companies, with the acquisition of British Energy by EDF, the announcement of proposals for new nuclear plant by the German energy companies RWE and E.ON, owners respectively of the former privatised electricity companies National Power and PowerGen, and the joint venture between GDF-Suez and Spanish utility company Iberdrola (owner of Scottish Power) to build at least two new reactors).92 One important issue is the need for connections to the grid, which requires significant upgrading to accommodate not only proposed new nuclear plant but offshore renewable generation.93 British Energy has entered into transmission connection agreements with National Grid for possible new nuclear plants at Sizewell (Suffolk), Dungeness (Kent), Bradwell (Essex) and Hinkley (Somerset). Another issue is land acquisition, bearing in mind that the sites are likely to be those on or in proximity to existing nuclear licensed sites.94 In Spring 2009, the NDA held a successful on-line auction of sites for potential new reactors at Wylfa (Anglesey), Oldbury (Gloucestershire) and Bradwell (Essex), with a joint venture between the German Utilities E.ON UK and RWE Npower acquiring Wylfa and Oldbury, and EDF Energy purchasing land at Bradwell. The £387 million proceeds will be used by NDA to fund ongoing decommissioning. The E.ON/RWE joint venture is committed to developing at least 6 gigawatts of new nuclear capacity, and EDF to 6.4 gigawatts, which to put the figures in context, exceeds the current contribution of nuclear power of around 11 gigawatts to the UK national grid.96 Centrica,

owner of British Gas, has aligned itself with EDF, following its acquisition in May 2009 of a 20 per cent stake in British Energy, owned by EDF. A further issue is the services, material, plant and equipment necessary for the design and construction process. The prospective new nuclear generators will therefore be embarking on procurement processes, and the first stage of this is the holding of various UK Supplier Forums.97 Potential suppliers of the reactors are engaged in a generic design assessment process with the safety regulator (described more fully in chapter four) in respect of their reactor types, which will take some three to four years and cost up to £10 million. The leading players are now Westinghouse with its AP1000 design, which is supported by E.ON and British Energy, and Areva with its EPR design, supported in the GDA process by EDF. Both Westinghouse and Areva have entered into agreements with major suppliers of equipment and services. These include some British companies: Westinghouse has memoranda of understanding or other arrangements with BAE systems, Rolls Royce, Doosan Babcock and Sheffield Forgemasters, and Areva has a dual partnership arrangement with Balfour Beatty and Rolls Royce. Commercial partnering and alliancing arrangements have always been popular in the nuclear industry, often under framework agreements as a means of reducing costs, sharing risks (to the extent permissible under nuclear safety and liability law) and reducing the scope for disputes. Another potentially important aspect of a nuclear renaissance is the creation of the National Nuclear Laboratory (NNL) which was launched by the Secretary of State for Business, Enterprise and Regulatory Reform on 23 July 2008. There has been concern for some years over the declining skills base in the UK to service the nuclear sector,98 and the NNL is intended to address that problem. Its model is a Government owned, contractor-operated body, fully funded by customer fees. The Government's interest allows it to protect the intellectual capability of the NNL. The initial contractors appointed in April 2009 to run it are a consortium of Serco, Battelle and Manchester University (SBM), who will collaborate with various academic and commercial partners. The range of services provided include those in support of the nuclear decommissioning programme and the ongoing operation of current nuclear power plants.

How far the nuclear renaissance goes beyond replacement of current capacity is open to debate, but a figure of 35 to 40 per cent of electricity from nuclear beyond 2030 has been canvassed as possible and potentially desirable99 (the figure for France is well over 70 per cent, and for a number of East European states around or over 50 per cent). This would require around 30 gigawatts of capacity. In any event the timing to replace nuclear capacity which will be lost over the next decade will be extremely tight, and there have been stark warnings from energy experts and the CBI as to the disastrous consequences of a significant gap in capacity. loo

The UK is not alone in Europe or in the world in facing these issues. France has long been a leading European proponent of nuclear power, with 59 working nuclear reactors. EDF is constructing a new 'third generation' European Pressurised reactor (EPR) at Flamanville, Normandy, intended as a prototype for up to 40 others of similar design. The French Government has also announced the inception of the design process for a prototype fourth generation, sodium-cooled fast reactor, with a target date of 2035-40 for

industrial deployment. Italy was an early leader in nuclear technology, but shut down its existing reactors pursuant to a referendum held after the Chernobyl disaster in 1986. However, it now plans to build new EPR reactors, pursuant to a co-operation agreement signed with France in 2009 and the Italian Government envisages a total of 8 to 10 such reactors. Sweden, with 10 working reactors, has announced that it intends to lift the ban on building new reactors which was imposed after a referendum in 1980. Switzerland k announced in 2007 that its existing five reactors would be replaced with new ones after a p referendum in 2003 reversed a moratorium imposed in 1990. Eastern European states have in large part remained committed to nuclear power, as a legacy of Soviet control, and indeed the Ukraine plans as many as 11 new reactors by 2030 as it seeks to reduce its dependence on Russia for energy supplies. Romania, Hungary, the Czech Republic and Slovakia also have ambitious plans for new reactors over the next decade. Russia itself has taken steps to amalgamate its civilian nuclear assets into a vertically integrated single company—Atomenergoprom--which is intended to bolster the country's position in international markets; and Federal laws issued in 2007 underpin a programme for the construction of up to 26 new nuclear power plants on a privately-financed basis. It has also been reported as planning to build a new fleet of floating and submersible nuclear power stations to be used in exploiting Arctic oil and gas reserves. There are some exceptions to the enthusiasm for new build: countries such as Spain and Germany still for the time being retain their 1980s moratoria on new nuclear build and Belgium is implementing a r law passed in 2003 requiring phase out of the country's existing reactors by 2025. Elsewhere in the world there is much more enthusiasm. Canada has played a very important role in the history of nuclear power and currently derives around 15 per cent of its electricity from that source, much more in certain provinces such as Ontario. It has plans to build several new reactors in the next decade. Japan as another long-time leader in nuclear technology, remains committed to nuclear power, despite the scare it suffered in July 2007, when its Kashiwazaki-Kariwa nuclear power station (the world's largest by electrical power rating) was forced to close for two years, following an earthquake which shook the plant beyond its design basis and which led to international calls for a full examination by the operator, Tepco (Tokyo Electric Power Company).104 Japan plans to increase the 30 per cent of its energy generated from nuclear power to 40 per cent by 2017, having selected Mitsubishi Heavy Industries as the core company to develop a new generation of fast breeder reactors, as a 'basic national technology'. Such plans are dwarfed by those of China, which plans a massive expansion of nuclear capacity to meet its growing energy needs, particularly in the rapidly developing coastal regions which are remote from the country's coalfields. A sixfold increase in capacity, including some of the world's most advanced reactors is planned by 2020, with a further three or fourfold increase to 2040.1°6

This has prompted strong commercial interest from US, Canadian, French and Russian companies. Independent reports have suggested that by 2050 China may have built between 200 and 300 new reactors, not much less than the generating capacity of all current nuclear plants in the world.

Whilst the world's nuclear markets now represent a tactical battlefield for the relatively small number of major trans-national corporations, often acting in alliances, such investments are not problem free. Currently credit markets are tight, and matters such as lack of clarity on future power prices can represent an impediment to financing. Another possible problem is lack of capacity among specialist steel producers able to manufacture large reactor components, such as Japan Steel Works, which has been said to have currently an effective global monopoly.

 

 

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