HL Deb 13 June 1990 vol 520 cc300-2

3 p.m.

Lord Hatch of Lusby asked Her Majesty's Government:

What are the latest estimates of the cost of nuclear decommissioning.

Viscount Ullswater

My Lords, the Government do not make estimates of the cost of decommissioning nuclear facilities. The work of decommissioning nuclear facilities and estimates of the cost of that work are matters for the operators of nuclear facilities.

Lord Hatch of Lusby

My Lords, then should not the Government make estimates in view of the fact that they have already taken nuclear energy out of their privatisation programme? Is the noble Viscount aware that the costs have become such a scandal that the National Audit Office has been asked to provide a review of those costs? Is he further aware that in one year alone British Nuclear Fuels' estimate of decommissioning costs rose from £450 million to £4.6 billion?

Viscount Ullswater

My Lords the arrangements for making financial provision for decommissioning costs is a management matter for the nuclear industry. In connection with the privatisation of the electricity industry the Government considered it important to ensure that the industry's estimates were fully assessed. An independent study of CEGB decommissioning cost estimates was undertaken by the UKAEA, the results of which were incorporated in the calculation of provisions appearing in the board's 1988–89 accounts. I am advised that BNFL estimates the cost of decommissioning its existing facilities and those planned for the future at £4.6 billion in 1988 money values. Those amounts are recoverable in due course from customers.

Lord Dean of Beswick

My Lords, would the Minister care to comment on the statement which was reportedly made by Mr. Wakeham at the weekend that because of nuclear energy's contribution to a cleaner environment the nuclear energy industry in this country may be worthy of a second chance? If that is so and the Government are considering lifting the moratorium that they have placed on the building of nuclear power stations until 1994, would it not be a blunder of the worst kind to rush into a programme of decommissioning of nuclear power stations at this time?

Viscount Ullswater

My Lords, what my right honourable friend said is very interesting. I also know that the noble Lord, Lord Hatch of Lusby, is deeply interested in the environment. I must tell him and your Lordships that the generation of electricity from nuclear power makes a useful contribution towards combating the greenhouse effect, since it produces no CO2. In the United Kingdom alone generation of a similar amount of power from fossil fuels would increase our annual CO2 production by over 10 million tonnes.

Lord Taylor of Gryfe

My Lords, since the nuclear stations will be decommissioned at a cost of £4.6 billion, can the noble Viscount say over what period that will be spread? Will he also say, if the nuclear industry is being taken out of the privatisation provisions for the electricity industry, whether the £4.6 billion will fall to the taxpayer?

Viscount Ullswater

No, my Lords, I should not like to confuse or mislead the House by saying that the £4.6 billion is the amount assessed by the industry for decommissioning. That is the provision for BNFL alone. I am advised that the estimates of the average decommissioning costs underlying the provisions in the CEGB's 1988–89 accounts were £599 million for each Magnox station and £617 million for each AGR station. On that basis the total cost of decommissioning Magnox stations in England and Wales would be £4,790 million. For AGR stations the total cost would be £3,085 million. The expenditure of such sums will be spread over a very long period.

Lord Jay

My Lords, do the Government know whether the alleged low cost of producing nuclear power in France fully takes into account decommissioning costs?

Viscount Ullswater

My Lords, every nuclear operator has to make its own assessment of costs. I am afraid that I am not in a position to tell the noble Lord whether the French industry assesses its costs on the same basis.

The Earl of Halsbury

My Lords, does the noble Lord agree that the factor which renders all those calculations worthy of fairyland is the unknown value to be placed on the transfer price for recoverable plutonium in anything up to 100 years from now?

Viscount Ullswater

My Lords, I have to agree with the noble Earl. He has a very good point.

Lord Hatch of Lusby

My Lords, the noble Viscount is well aware—because we have debated the matter before—that there is a another side to the question of the use of nuclear fuel and the greenhouse effect. The case that he put forward takes into account neither the nuclear waste which is produced by the nuclear industry nor the method of construction of power stations. Will the noble Viscount tell the House, in view of the figures and in view of the figure of £25 billion which was mentioned when the National Audit Office was asked to undertake a review, whether the Government have put any money aside in order to defray those costs, because, as I understand it, if that figure of £25 billion is correct, there is a necessity for a sinking fund of over £8 billion now?

Viscount Ullswater

My Lords, unlike other methods of power generation, the costs of the fuel cycle are included in the assessment of the cost of nuclear generation. The relative economics of nuclear power might look rather different if the environmental costs of fossil fuel generation such as acid rain and CO2 emissions were similarly taken into account. Regarding the noble Lord's second question, the CEGB is putting money aside to provide for the decommissioning of its stations in due course. It is not a question of no money being put aside, it is being put aside on a regular basis.

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