Justification Decision (Generation of Electricity by the EPR Nuclear Reactor) Regulations 2010

Lord Marland Excerpts

Wednesday 17th November 2010 Lords Chamber

Moved By

[Lord Marland]

That the draft regulations laid before the House on 18 October be approved.

Relevant documents: 4th Report from the Joint Committee on Statutory Instruments, 10th Report from the Merits Committee.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, in moving the draft Justification Decision (Generation of Electricity by the EPR Nuclear Reactor) Regulations 2010, I shall speak also to the draft Justification Decision (Generation of Electricity by the AP1000 Nuclear Reactor) Regulations 2010, and the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order 2010.

The House should consider these three instruments, which I laid before it on 18 October, together. Two of them contain the decision of my right honourable friend the Secretary of State for Energy and Climate Change, as justifying authority under the Justification of Practices Involving Ionising Radiation Regulations 2004, that the generation of electricity from two nuclear reactor designs—Westinghouse’s AP1000 and Areva’s EPR—is justified. The third, the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order, specifies which technical matters, in addition to those already in the Energy Act 2008, are to be “designated technical matters”.

First, I will consider the two regulatory justification decisions. Regulatory justification is derived from the recommendations of the International Commission on Radiological Protection, the ICRP, which are used around the world as the basis for radiological protection. The ICRP’s recommendations form the basis of the European basic safety standards directive and, in the UK, of the Justification of Practices Involving Ionising Radiation Regulations 2004.

The regulations provide that the Secretary of State, as justifying authority, must decide whether a new class or type of practice resulting in exposure to ionising radiation is justified, in advance of it being first adopted or approved, by its economic, social or other benefits in relation to the health detriment that it may cause.

Regulatory justification is an initial, high-level process. It is the first step in the radiological protection regime and is made on a generic, not a site-specific, basis. Following a regulatory justification decision, there are further processes involving more detailed examinations by regulators of reactor designs and of the impact on specific sites of proposals to build nuclear power stations separately and after the regulatory justification process.

A justification decision does not mean that the reactor design and the nuclear power station will pass through these further processes successfully. These further processes are based on the principle of optimisation, a requirement to keep all exposures as low as reasonably achievable, and dose limitation, the principle that the total dose to any individual from regulated sources in planned exposure situations—other than medical exposure of patients—should not exceed the appropriate recommended limits.

Regulatory justification decisions are made in advance of full information on the benefits and detriments of the practice which might emerge from operational experience. They therefore seek to identify the potential detriment from the reactor designs by making assumptions based on the best information currently available, including information arising from the operational experience of similar classes or types of practice and the expert opinion of regulators and others. If new and important evidence about the efficacy or consequences of the class or type of practice comes to light, the 2004 justification regulations allow the Secretary of State to reassess any regulatory justification decisions.

Last year, my department published a consultation on proposed decisions that two reactor designs should be justified—Westinghouse’s AP1000 and Areva’s EPR. After considering responses to that consultation, on 18 October my right honourable friend the Secretary of State for Energy and Climate Change announced his decision that the two designs are justified. I will outline our reasons for making those decisions.

We see a clear need for the generation of electricity by the AP1000 and EPR through the contribution they can make to securing the UK’s energy supplies, helping the UK decarbonise and meet legal low-carbon obligations and benefiting the economy more widely. Against this, the radiological detriment to health from these nuclear reactor designs and their associated waste facilities will be low compared to naturally occurring levels of radiation and effectively controlled by the regulatory regime. The AP1000 and EPR will be able to produce large quantities of electricity over an extended period, making a significant contribution to the electricity supply. Nuclear power has long been our most significant source of low-carbon energy and can continue to contribute to our energy mix.

It will be for companies to fund and build any new nuclear power stations and to determine whether they provide sufficiently attractive returns. Nuclear power is economically competitive with other forms of generating technology, and developments in the UK market have made clear that energy companies are investing significantly in the prospect of new nuclear power stations.

We are confident that there will be economic benefits for the UK from new nuclear power stations. Beyond direct investment and employment, we can benefit through the development of a globally competitive nuclear supply chain and improvement in the quality of a skilled UK workforce. Further, we believe that, if nuclear power stations are not part of the UK’s future energy mix, the UK would face significantly higher costs in meeting the transition to a low-carbon economy.

Against these benefits, there is the potential for detriment. However, the safety features of the designs and the regulatory regime, which sets limits to the release of radiation and monitors compliance, will ensure that emissions will be minimised. The radiation to which members of the public would be exposed, as a proportion of the overall radiation to which they are exposed from all sources—including medical procedures and background radiation—would therefore be very small and the risk of health detriment very low.

The decisions apply to the operation and decommissioning of new nuclear power stations and also the management and disposal of the radioactive waste they will produce. In making the decision, we are therefore satisfied that the regulatory regime will limit health detriment from waste management and disposal, that the interim storage of waste can be carried out in a way that causes a very low level of health detriment and that a robust process is in place to identify a site for, and build, a geological disposal facility.

We also concluded that the potential environmental detriments arising from new nuclear power stations are likely to be avoided or adequately mitigated by the licensing and planning regime. We considered the risk of detriments from an accident or terrorist incident. This potential detriment already exists and the risk of such incidents would be seen in the context of the regulatory regime, which is intended to prevent accidents and protect against terrorist attack. We are confident in the regulatory regimes for safety and security of civil nuclear installations and materials in the UK and consider that the likelihood of an accident or other incident giving rise to a release of radioactive material is small. My right honourable friend the Secretary of State for Energy and Climate Change therefore concluded that these significant potential benefits outweigh the potential detriments, and that the generation of electricity by the AP1000 and EPR should be justified.

I now consider the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order. The purpose of the draft order is to support the requirement under the Energy Act 2008 for nuclear operators to make financial provision in their funded decommissioning programmes for those designated technical matters. The Energy Act 2008 contains only one category of designated technical matters—decommissioning a nuclear power station and cleaning up the site. The Energy Act provides that the Secretary of State specifies by order the other matters which are to be designated technical matters. The order is, therefore, necessary to give operators clarity over what are the designated technical matters that they must provide for.

The order specifies that the construction and maintenance of an interim fuel store used for storage, any activity preparatory to the decommissioning of a relevant nuclear installation, and the cleaning up of the site are designated technical matters. This means that these costs also have to be funded through funds set aside as part of the funded decommissioning programme. It might be claimed that the operator could pay for these costs out of operational expenditure and that designation is unnecessary. However, this may put the costs in competition with other demands on revenue and if the operator was unable to meet these costs when they fell due, there would be a risk that they could fall to the taxpayer. It is therefore appropriate to designate these costs to limit the risk to the taxpayer by ensuring that funds are set aside to carry out the relevant work. The order will be complemented by the Nuclear Decommissioning and Waste Handling (Finance and Fees) Regulations, which will be laid before Parliament once this order completes its passage.

Following a consultation on the provision of the draft order earlier this year and responses received, the Government do not propose to extend the definition of “designated technical matters” beyond interim stores and activities preparatory to decommissioning and cleaning up the site. I believe that the order will benefit both industry and the public. It clarifies the obligations of the nuclear industry and therefore reduces uncertainty and helps investment. The order, together with the Act, ensures that the costs of waste management, disposal and decommissioning do not fall on to the taxpayer.

I commend these regulations and the two other instruments to the House.

--- Later in debate ---

I am sorry for having spoken slightly longer than I had intended, but there were a number of issues on which I wanted clarification. I know that the Minister has a personal commitment on these issues, and we all want to ensure that there can be confidence that they have been fully examined by your Lordships’ House.

[Lord Marland]

My Lords, I am very grateful to everyone who has spoken. This is a great day for the nuclear industry, and I am delighted. Unfortunately, everyone who has spoken seems to have left, which says a lot for my winding-up speech. I am very grateful to the noble Baroness for sitting there and listening to what I have to say. Perhaps she can report it accordingly. It is a great day for the nuclear industry, and I am very grateful to the noble Lord, Lord O’Neill of Clackmannan, who is a terrific exponent as chairman of the NIA, for his kind words in saying that it is a great day. I think this clearly sends confidence to the industry that we are determined to get the nuclear show on the road. We have had 13 years without the nuclear show on the road. I am grateful to the previous Government for helping to change public opinion, but we have had no activity, and we now have activity. As always, the noble Lord, Lord O’Neill, makes good points in everything he says on this issue, because he is an expert. He is a pleasure to work with on this subject. He makes good points about waste, the economic benefit perhaps of economies of scale working with government and with civil waste, and I take those messages on board. The noble Lord, Lord Jenkin, again talks about confidence. The first two statutory instruments clearly demonstrate that there is confidence and that we are going down the road for it. Both he and the noble Baroness have asked questions on the subject of the NII. I take on board her comments, asking us to get on with sending a clear route map of what we need to do. The Government have been considering two options for the reform of nuclear regulation, as was said at Question Time last week—a discrete agency within the HSE or a stand-alone, statutory corporation. This is a discussion between two departments, and I assure the noble Baroness that we are pushing very hard for a conclusion on it.

The noble Lord, Lord Teverson, made a series of excellent points, as always. He talked about spent fuel and the levels of waste not being defined. They are defined in the regulations, in the companion instrument to this order, and I should be happy to have my staff take him through those pages, because I shall not be able to do it myself.

[Lord Teverson]

I hope the noble Lord does not mind if I decline that particular offer, certainly this evening.

[Lord Marland]

It is all very well the noble Lord asking questions, but he should know the answer to them.

One question is why we should designate interim stores. Operators must provide for interim stores during the life of a station and it is essential to ensure that the money is set aside. I was asked whether the funds were secure. Yes, there is protection in the funded decommissioning programme and in the Act itself. Funds must be remote from the operation of the Government. Neither party, including the Treasury, can get its hands on it. That was the concern.

The two reactors are hybrids and based on the foundation of reactors already in use. Obviously, they are not the same, because the people who make them are continually trying to improve on them and technology is moving forward on that. The noble Lord asked whether other reactors would require approval. Of course they would—as, indeed, would a Mox plant, as it does not fit within this legislation.

I thank the noble Baroness, Lady Smith, very much for her co-operation in this particular SI. She let me know in advance about some of the matters of concern affecting her Benches, and I am grateful for that level of co-operation. We are trying to build a consensus and get the ball rolling as quickly as we can, and it is very welcome that on all sides of the House we seem to have a common theme. I thank her very much for that.

The noble Baroness asked whether we have considered whether there should have been an inquiry. Over three years we have had the three consultation processes that her own Government instigated, which I think is pretty exhaustive in the current circumstances. She asked whether we were on track; we are, and we have published the timetable on the DECC website. If she has time available, we would be happy to show her how to get on to it. We can keep her posted through that means.

[Baroness Smith of Basildon]

I reassure the Minister that I look at the website every single day.

[Lord Marland]

That is very gratifying, because I do not. Perhaps she would not mind telling me about the changes that are going on at the moment.

[Lord Myners]

I congratulate the Minister on his honesty, which brings him great respect from the House.

[Lord Marland]

I am extremely grateful to the noble Lord, Lord Myners, whom I much enjoy bumping into on the street every now and then. I hope that his dog is fine, and all the rest of it. I admire his honesty for saying such honest things about me, so it is a mutual appreciation society here. On the last question, noble Lords say that they are concerned, rightly, that there may be a legal challenge. We obviously feel that our case is extremely robust, or we would not be here now trying to get these regulations through.

[Baroness Smith of Basildon]

The question I was asking about judicial review or possible legal action was not on whether the case were robust. I have read all the documents and I am sure the Minister is convinced that his case and the work undertaken have been robust. The point was specifically whether legal actions would significantly delay the process beyond 2017. He may want to check on that. If there were legal actions, would that delay the process?

[Lord Marland]

Clearly they would delay the process. A legal challenge is what it says, and would delay the process, but there is no sign of it at the moment so we hope that it will not happen. As the noble Lord, Lord O’Neill, said, not everyone agrees with nuclear as being the future and we know who some of those people are. Through a consultation process over three years, with three types of consultation at least, you try and get to a hard edge on it.

I turn to the human rights issue that the noble Baroness raises. We believe that all human rights issues are compatible with legislation. On her point about no subsidy, I will repeat what my right honourable friend the Secretary of State has said—that no subsidy means,

“that there will be no levy, direct payment or market support for electricity supplied or capacity provided by a private sector new nuclear operator, unless similar support is also made available more widely to other types of generation”.—[Official Report, Commons, 18/10/10; col. 45WS.]

That clearly gives opportunity for a watering-down, because if similar support is made available more widely to other types of generation then obviously we will consider it from a nuclear standpoint. I hope that answers her concern in that area.

[Baroness Smith of Basildon]

I apologise for intervening again on the noble Lord; he has been generous in giving way yet again. He goes a long way to answering the point. The point I was asking was particularly on the waste disposal area and on the funded decommissioning programme, because no other process of energy generation allows for waste in that way. I was particularly referring to the order and the FDP. It seemed to me that it was tightening up the issues around any subsidy available and all costs would fall on the operator. Has this been discussed with the industry and what is its reaction?

[Lord Marland]

If I understand the noble Baroness correctly, the cost for provision for waste falls on the operator, who has to—as I have answered the noble Lord, Lord Teverson—provide funds at all stages of the decommissioning. That includes storage and the final decommissioning. They are fully aware of it. Clearly, we have not got to where we are now without consultation with all the operators. They understand the rules of engagement—I am not going to say they are happy with them, as I cannot immediately tell you that—and these rules are the way we are intending to proceed.

I hope the noble Baroness feels that I have answered the majority of her questions, if not all of them. As always, it is good to have a lot of questions as this is an important step change that we are making for the future of the nuclear industry.

[Lord Teverson]

I think my noble friend may be about to move off the questions. I did ask about these types of approvals in other European member states and how they had seen these reactors. I should have given the Minister notice of that question and I apologise that I did not. If he could write to me with any information on that I would much appreciate it.

[Lord Marland]

I felt that I had answered the noble Lord’s questions. These are obviously hybrids and there are similar types of reactors in Finland and France, which form the basis of these operations. If he feels that is not an adequate answer, however, I shall write to him later on the subject, if I may.

We face major changes in moving to a low-carbon economy. There is an urgent need for a diverse range of new energy infrastructure with a massive expansion in renewables, as well as more new nuclear, clean coal and gas. All of this will help us to reinforce our domestic security of supply. Regulatory justification is one of the facilitative actions necessary to enable new nuclear power stations to be built in the UK. It requires an assessment of whether the benefits of building these nuclear reactors in the UK outweigh the radiological health detriment that they may cause.

These instruments give effect to our decisions that the benefits, including the contribution which new nuclear power stations can make to ensuring secure, low-carbon energy supplies, outweigh the detriments. For that reason, they are very important measures. The provisions in the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order 2010 are an important part of the statutory framework for the financing of nuclear waste and decommissioning, and another of the facilitative actions necessary to enable new power stations to be built in the UK. I commend these regulations to the House.

Motion agreed.