The European Commission is expected to begin an investigation on December 1st into whether the UK will contravene European competition rules through establishing the Nuclear Decommissioning Authority (NDA). On 1st April 2005 all of British Nuclear Fuel's (BNFL's) assets - including reprocessing and fuel fabrication plants, the Magnox reactors (and the Drigg radioactive waste dump) - are due to be transferred to the ownership of the NDA.
It is the transfer of assets from BNFL to the NDA, and how commercial operations may be helped by state aid, which will be main focus of the EC investigation.
Last year Greenpeace first challenged the Department of Trade and Industry (DTI) over the possible state aid implications of the Nuclear Decommissioning Authority. In May, Greenpeace presented a legal opinion to the Commission, which argued that the NDA could not be established or operate without prior EC approval, because it breaks EC rules which prevent governments providing state aid to industries under competition laws. For example, the provision of state aid by the NDA might disadvantage competitor nuclear companies in Belgium and France.
Since May another major problem with the NDA has emerged. Even though when it was originally proposed the Government claimed the NDA's focus would be "squarely on [dealing with] the nuclear legacy", it has since emerged that the Authority will face a conflict of interest, as it will itself be partly dependent on revenue generated by plants that generate nuclear waste.
The government's spending review of 2004 states that half of the NDA's annual budget of £bn is planned to come from commercial activities such as:
- Reprocessing at the Thermal Oxide Reprocessing and Magnox plants at Sellafield;
- Operating the loss-making Magnox reactors; and
- Possibly operating the controversial Mixed Oxide (MOX) plant at Sellafield
It is not clear exactly how the Competition Commission will structure its investigation, but it is known some key facilities will come under special scrutiny. For example, the commissioning and operation of the controversial Mixed Oxide Fuel plant - which has cost an estimated £00m but which has not yet produced one consignment of fuel - will be investigated in order to establish if state aid will be used to support the plant's operations
It is expected the inquiry will take between 9-12 months. In the meantime the NDA will be funded from the Nuclear Liabilities Investment Plan. The EC will not be investigating the United Kingdom Atomic Energy Authority, which runs sites such as Dounreay. This is because the UKAEA is now purely a decommissioning and clean up company.
For more information contact Jean McSorley Greenpeace nuclear campaigner on 07801 212959 or Pete Roche on 07 821 378 210.
