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Radioactive materials lost in more than 30 incidents over past decade

Category : Business

Health and safety watchdog admits firms and hospitals have mislaid dangerous substances that could be used by terrorists

Radioactive materials have gone missing from businesses, hospitals and even schools more than 30 times over the last decade, a freedom of information request to the UK’s health and safety authorities has revealed.

Nuclear experts have warned that some of the lost material could be used by terrorists and said there should be a crackdown by the regulators to ensure such “carelessness” is brought to a speedy halt.

Among the big names that have lost potentially dangerous materials are Rolls-Royce at a site in Derby, the Sellafield nuclear plant in Cumbria and the Royal Free hospital in London. Some organisations have been prosecuted but others have got away with little more than a warning notice, papers released by the Health and Safety Executive (HSE) reveal.

Missing items include a 13kg ball of depleted uranium from the Sheffield Forgemasters steel operation in 2008, plus small pellets of extremely radioactive ytterbium-169 from Rolls-Royce Marine Operations.

The Royal Free hospital lost caesium-137 – used in cancer treatment – which a report into the incident accepted had “the potential to cause significant radiation injuries to anyone handling [it] directly or being in the proximity for a short period of time.”

In another case, at the site of the former atomic energy research station at Harwell near Oxford, cobalt-60 was “found in a tube store under a machine during clearance,” according to the HSE.

The oil services firm Schlumberger also “temporarily lost” caesium-137 radioactive materials on a North Sea platform, while Southampton General hospital could not locate an “unsealed source” of iodine-131 in February last year.

John Large, an internationally renowned consultant to the nuclear industry, said it was disturbing that losses of the magnitude detailed were happening so frequently.

“The unacceptable frequency and seriousness of these losses, some with the potential for severe radiological consequences, reflect poorly on the licensees and the HSE regulator, whose duty is to ensure that the licensee is a fit and competent organisation to safeguard such radiological hazardous materials and substances. I cannot understand why it is not considered to be in the public interest to vigorously prosecute all such offenders.

“Clearly these organisations have been careless and wanting in their duty to safeguard and secure these radioactive substances, some of which remain extremely radiologically hazardous for many years – such slack security raises deep concerns about the accessibility of these substances to terrorists and others of malevolent intent.”

The HSE said it always considered all enforcement action against those involved, up to and including prosecution, but its final decision rested on issues including the likelihood of securing a conviction and the public interest. “Prosecutions have been undertaken successfully by HSE in the case of Schlumberger and the Royal Free hospital,” it said in a statement.

By contrast, the universities of York and Warwick received “written advice” and an “improvement notice” respectively over the loss of radioactive materials used for demonstrations in their science departments. Loreto high school in Manchester is being investigated by the HSE over the loss of an americium-241 radioactive source and four small mineral samples.

In February of this year the Sellafield nuclear plant pleaded guilty at Workington magistrates court to sending several bags of radioactive waste to the wrong facility.

The company was prosecuted by the Environment Agency and the Office for Nuclear Regulation after four bags of mixed general waste, such as plastic, paper, tissues, clothing, wood and metal, from normal operations in controlled areas of the site were sent to Lillyhall landfill site in Workington. The bags should have been sent to the Low Level Waste Repository at Drigg, Cumbria, – a specialist facility which treats and stores low-level radioactive waste consignments.

Large, who led the nuclear risk assessment team for the raising of the damaged Russian nuclear submarine Kursk in 2001, said in a number of cases publicised through the FoI disclosure people seemed to have been potentially put in danger. “The licensed use of such radioactive sources requires the licensee to be a fit person and demonstrate competence and each of the sources is accompanied by ‘cradle to grave’ documentation that requires a prearranged and managed storage/disposal route – these safeguards have clearly failed and the workforce and, indeed, members of the public may have been placed at radiological risk.”

He added: “Some of these lost radioactive sources are very persistent, for example the Royal Free hospital’s lost caesium-137 has a radioactive decay half-life of around 30 years, so it remains radio-toxic for at least 10 half-lives or about 300 years, and the unsealed source of iodine-131 lost by Southampton hospital is extremely volatile, easily breathed in and reconcentrated by the thyroid gland, presenting a cancer risk, and certainly not amenable to release into the atmosphere of a public place such as a hospital.”

Nuclear power plans threatened by European commission investigation

Category : Business

Proposed nuclear reactor in Somerset could be delayed by two years if competition directorate launches full-scale investigation

Britain’s planned nuclear reactor programme could be delayed for years, and the nation’s long-term energy policy thrown into turmoil, as European commission officials launch the first stage of a formal investigation into the use of taxpayer subsidies to support the development.

Sources in Brussels have indicated that Britain hopes to win approval for a multibillion-pound deal with French energy giant EDF at the initial stage, which usually takes two months.

But if after a preliminary investigation the EC’s competition directorate decides to launch a full-scale investigation, that would last at least 18 months and probably two years or more. Such an outcome is made more likely by reports that ministers and EDF are discussing a minimum or “strike” price for the nuclear-generated electricity of a little under £100 per megawatt hour – nearly double the current market rate. However ministers will be hoping that their regular meetings with EC officials will make it more likely that a full inquiry will be avoided.

Under the proposals, a nuclear power station – the first for a generation – will be built at Hinkley in Somerset, and the government will guarantee a minimum price for the electricity produced for 30-40 years, a deal which could cost customers a billion pounds a year or more.

News of the latest obstacle to the nuclear building programme comes before the expected announcement next week by the energy secretary, Ed Davey, of whether EDF has won planning permission for the 3.2 gigawatt Hinkley nuclear plant. He is widely expected to give the scheme the go-ahead.

Expectations are rising that Davey could also announce some details of the new contract, including the strike price, in what would be a useful counter to critics that the coalition is not doing enough to stimulate investment to boost the economy and tackle the UK’s threatened energy shortages.

A delay imposed by Brussels would cast new doubt on the £14bn project as it would be likely to make it harder for EDF to raise the capital needed until its contract with the government was fully approved. That in turn would delay the entire nuclear build programme, under which the government wanted 16 gigawatts of new nuclear power operating by the middle of the next decade.

“The government wouldn’t need state aid approval for nuclear if it wasn’t trying to subsidise a risky technology that could wind up costing more than the renewable alternative,” said Doug Parr, policy director for the anti-nuclear campaign group Greenpeace.

Maria Madrid, spokeswoman for Joaquín Almunia of Spain, the European commission vice-president in charge of competition, told the Guardian: “The commission is in contact with the UK authorities on this issue, but has not received a formal notification so far. We are discussing this issue. It’s confidential. We never communicate on preliminary discussions.”

It’s time civil servants were open about energy lobbying | Leo Hickman

Category : Business

The public deserves to know about the meetings between lobbyists and senior civil servants

Last November I wrote a news story about how a register of meetings released by the Department of Energy and Climate Change (Decc) under freedom of information legislation had exposed the extent to which senior civil servants had been wined and dined by nuclear industry lobbyists.

The register was revealing on two levels: first, it showed how there had been dozens of meetings since Decc’s Office for Nuclear Development (OND) had been formed in 2009; second, it showed just how lavish the hospitality offered by the lobbyists had been with meetings regularly taking place at some of London’s most luxurious restaurants and hotels.

Craig Bennett, the director of policy and campaigns at Friends of the Earth, remarked at the time: “What the taxpayer should be asking is whether this succession of lavish hospitality has resulted in lavish subsidies for nuclear.”

There was, unsurprisingly, a strong reaction from readers to the story. But some, rightly, asked me via the comments or Twitter if comparable registers of meetings were available for the senior civil servants working with other sectors such as oil and gas (known as the “Energy Development Unit“), and renewables (“Office for Renewable Energy Deployment“).

It has taken more than two months to get hold of them, via a freedom of information request, but they are now in my possession.

What they reveal is that lobbyists from the renewables sector and oil and gas sector do indeed have meetings with senior civil servants at Decc – as you might expect – but that the nuclear lobbyists are in a different league when it comes to the lavishness and frequency of meetings.

Here is Decc’s note of explanation I received alongside the registers:

Decc have defined hospitality as including the acceptance of meals and drinks, provided by external organisations at events. The definition does not include, however, minor refreshments or sandwich lunches at such events.
Tables of relevant entries from the hospitality registers are attached at Annex 1 and Annex 2. The latter schedule relates to a retiree from the Energy Development Unit. Job titles for the individuals and additional notes under the column titled ‘purpose’ have been added as necessary to help put the information into context.
Please note that the expenses of and hospitality received by Senior Civil Servants at Director General level and above
are published at in accordance with Cabinet Office guidance.

And here are the registers so you can peruse them yourselves…

Annex 1
Annex 2
OND Register (released last November)

My own view of lobbyists is that they are not a “bad” influence, per se, as some view them. Governments need to hear a wide range of views when formulating, then implementing, new policies, including the views of vested interests. But I do think full transparency is required if we are ever to trust this process. There have been too many scandals involving lobbyists working in the shadows to allow the status quo to continue. Sunlight is the best disinfectant, and this is never truer than with the influence of lobbyists.

Why aren’t these hospitality registers published on ministry websites as a matter of routine, as is now the case with ministerial “meetings with external organisations“? (For example, such lists allowed me to ascertain last July that ministers at the Treasury have held meetings with representatives from energy-intensive sectors seven times more often than with green sector representatives.)

As a general rule, lobbyists want to meet with ministers when policies are being formulated. But when it moves on to policy implementation, lobbyists would rather get the ear of the senior civil servants charged with this particular task. The public deserves full transparency across both these policy stages. In fact, we deserve to know about every point of contact between ministers and civil servants and “external organisations”, as was illustrated by the revelation last August – again, extracted via freedom of information legislation – that Shell was laying on “training courses” for senior civil servants.

Furthermore, these lists need to be maintained across departments using a standardised format. For example, with the OND list released last November we got to know the precise venue of each meeting. That a meeting took place over a one-to-one dinner at the five-star Berkeley hotel in London possibly holds a different significance to one that took place at a chance meeting at an annual awards event.

But such detail is missing from the lists I have just obtained related to the renewables and oil/gas sectors. (I have asked for it to be supplied and will update this article later if I secure it.) And why has hospitality that entailed “minor refreshments or sandwich lunches” at events provided by outside groups been omitted from the register? To achieve full transparency and accountability, we need to know about all meetings with lobbyists and outside groups, regardless of whether the civil servant was served a Chateaubriand steak and a bottle of the finest Pomerol, or just a limp cucumber sandwich and a glass of tap water.

The need-to-know information is that a meeting and a conversation took place. We also need to know the Who, When, Where and Why. Even greater transparency would be achieved if the register actually included meaningful detail about what precisely was discussed. At the moment, the best we seem to get are bland declarations that the purpose of the meeting was “to discuss energy related matters”. You don’t say…

Finally, here are just a couple of my own observations from the newly released registers. First, it seems that the interaction between senior civil servants and the renewables industry – and to a lesser extent, the oil/gas industries – largely took place at awards events. This contrasts with the nuclear lobbyists who prefer, it seems, to meet with senior civil servants in the more intimate, luxurious surroundings of a fancy restaurant. I know not why.

Second, the hospitality enjoyed by Ian McKenzie, head of coal liabilities at the Energy Development Unit, particularly caught my eye. He had five meetings with the law firm Nabarro. The two meetings last year were to, firstly, “mark the conclusion of the COPD Compensation Scheme”, and then, four months later, to “discuss forward programme of work”.

COPD stands for “chronic obstructive pulmonary disease” and the compensation scheme referred to was set up to deal with the claims of 760,000 miners who have suffered from the condition. But the scheme has been been dogged by reports of law firms “exploiting” the scheme. As one legal journalist put it last year, “the exploitation [of the scheme] by a few solicitors…has been arguably the profession’s darkest hour”.

“Exploitation” is a particular allegation and a separate debate, but it is certainly true that some law firms have earned millions from the scheme. As my colleague Damian Carrington wrote in 2010:

The legacy of ill health suffered by British Coal miners is also costing taxpayers millions. Since May, DECC has paid £7.3m to legal firms fighting compensation claims from miners. Nabarro alone received £3m.

Readers can judge how appropriate it was for McKenzie to be enjoying “drinks and canapés” with Nabarro to mark the end of the scheme and then a few month later to be meeting with them again – this time for “lunch” – to “discuss a forward programme of work”.

But the wider and more important point is at least we now know those meetings took place. Now we need government departments to publish this information as a matter of routine, rather than force people to use freedom of information legislation to extract it from them.

Sellafield management sharply criticised by Commons committee

Category : Business

MPs report comes in same week as court action against Sellafield over illegal dumping of nuclear waste in local landfill

The reputation of the nuclear industry faces further damage this week with the publication of a highly critical report on Monday on the management of the Sellafield plant in Cumbria, days before a court action over the illegal dumping of nuclear waste.

The moves follow Cumbria county council’s refusal last week to pursue plans to build a storage facility for radioactive materials needed, many believe, if Britain is to build new atomic power stations.

The Commons public accounts committee report claims that Nuclear Management Partners (NMP), the private consortium managing Sellafield, has failed to stem rising costs and delays in dealing with waste and the decommissioning of facilities.

Margaret Hodge MP, the committee’s chair, said: “Taxpayers are not getting a good deal from the [Nuclear Decommissioning] Authority [NDA] arrangement with Nuclear Management Partners.

“Last year the consortium was rewarded with £54m in fees despite only two out of 14 major projects being on track.

“It is unclear how long it will take to deal with hazardous radioactive waste at Sellafield or how much it will cost the taxpayer. Of the 14 current major projects, 12 were behind schedule in the last year and five of those were over budget.

“Furthermore, now that Cumbria county council has ruled out West Cumbria as the site of the proposed geological disposal facility, a solution to the problem of long-term storage of the waste is as far away as ever.”

The report, Nuclear Decommissioning Authority: Managing Risk at Sellafield, points out that about £1.6bn is being spent annually at the site, where a variety of hazardous materials – including 82 tonnes of plutonium – are kept.

The total lifetime cost of dealing with this has continued to rise each year and has now reached £67.5bn.

“It is essential that the authority brings a real sense of urgency to its oversight of Sellafield so that the timetable for reducing risk does not slip further and costs do not continue to escalate year on year,” says the report, from which some findings were released last November.

The MPs’ committee is suspicious that the NDA, a public sector body established to oversee the safe dismantling of the UK’s old nuclear power stations and deal with waste, does not have a tight enough rein on NMP – a consortium made up of Amec of Britain, Areva of France and the US firm URS – to properly control costs.

The report urges the NDA to work out how to better transfer more risk of failure to the private sector providers.

The NDA said great progress had been made in what was one of the most complex nuclear sites to decommission.

“Of course, not everything has gone smoothly on such a complex and highly technical programme, and the report has rightly pointed to areas where we and the site need to do better,” it said in a statement.

“We have a programme of improvements in place and continue to work with Sellafield Ltd and NMP to make continued progress across a broad front of safe operations and project delivery.”

Further criticism will be heaped on those managing Sellafield when a court case opens on Thursday that will look into claims the nuclear operator breached environmental permits in 2010 by dumping four bags of radioactive waste in a landfill at nearby Lillyhall without authorisation.

Workington magistrates court, Cumbria, will consider nine charges, although the law has since changed to make it easier for Sellafield to dispose of certain low-level waste materials at Lilyhall.

Management at Sellafield said they did not want to comment before the case, which has been brought by the Environment Agency and the Office for Nuclear Regulation.

The government is currently trying to strike a deal with the French company EDF on a power pricing formula that would convince the company to proceed with new reactors at Hinkley Point in Somerset and elsewhere.

But EDF and other companies interested in building atomic power stations know that any bad publicity around the industry will undermine already-shaky public confidence.

EDF £3bn deal with Network Rail makes trains ‘mainly nuclear powered’

Category : Business

French firm’s eight UK nuclear power stations behind supply to electrified tracks that will power 75% of trains by 2020

The majority of Britain’s trains will be indirectly running on nuclear power for the next 10 years following Network Rail’s agreement to a £3bn deal with EDF to supply electricity to the railways.

At present just over half of rail traffic is electric rather than diesel, but by 2020 three-quarters of Britain’s trains will be running on electricity as another 2,000 miles of tracks are converted, with lines in south Wales, the north-west and the Midlands among the biggest works ahead.

While the French-owned EDF already supplies most of Network Rail’s electricity, the deal puts the company on an exclusive footing until 2024. EDF benefits from guarantees that the railway’s supply of about 3.2TWh of electricity a year will be matched by energy generated from the company’s eight nuclear power stations.

David Higgins, Network Rail’s chief executive, said: “Rail is already the greenest form of public transport and this partnership with EDF Energy will help us make it greener still. Our work to electrify hundreds of miles of railway represents the biggest programme of rail electrification in a generation and will provide faster, quieter and more reliable journeys for millions of passengers every week while cutting the cost of the railway.”

Vincent de Rivaz, EDF Energy’s chief executive, said: “Network Rail is the biggest single electricity customer in the UK so this long-term deal is a massive vote of confidence in our nuclear backed energy.”

Electric trains are regarded by some as not only quieter and potentially more environmentally friendly than their diesel counterparts, but also as causing less wear and tear to the tracks.

Nuclear safety watchdog criticises Sellafield’s emergency readiness

Category : Business

Report finds errors by fire officers during practice exercise could have led to ‘prolonged release of radioactive material off-site’

A damning report by safety experts has revealed that staff at Britain’s most important nuclear site did “not have the level of capability required to respond to nuclear emergencies effectively”.

In response to a freedom of information request, the Office for Nuclear Regulation (ONR), an arm of the Health and Safety Executive (HSE), said errors by senior fire officers in a preparedness exercise at Sellafield “could have led to delays in responding to the nuclear emergency and a prolonged release of radioactive material off-site”.

The criticism is revealed at a critical time for the nuclear industry, which is trying to build public confidence after the crisis at the Fukushima nuclear plant while drawing up plans to construct a new generation of atomic power stations in Britain.

It is also an embarrassment to Nuclear Management Partners, the private sector consortium which runs Sellafield and is part-owned by Areva, the French engineering company that has prepared the design for a proposed reactor at Hinkley Point in Somerset.

The initial report from the ONR led to an improvement notice being issued to the Cumbrian site, ordering it to improve its training and wider preparedness to deal with emergencies.

Two HSE fire specialists had watched a safety exercise in December 2011 which tested the Sellafield fire and rescue service’s ability to search for two people after a fictional accident that led to the spillage of radioactive liquid and an aerial release of radioactivity. Although the exercise presented “simple scenarios under ideal conditions”, the service’s “resources were stretched” and “there were insufficient numbers of firefighters to achieve the objectives”, according to the HSE report.

A spokesman for Sellafield said the successful introduction of an integrated risk management plan (IRMP) had subsequently led to the improvement notice issued in February 2012 being “closed out” by the ONR.

“This IRMP is the first of its kind for Sellafield Ltd and ONR has asked Sellafield Ltd if it would be happy to share it as good practice with other operators. A number of key improvements are being progressed to achieve the implementation of the IRMP, including enhanced training for SF&RS [Sellafield fire and rescues service] firefighters and officers,” he added.

The inspectors found evidence of “significant deficiencies around availability of resources, frequency and quality of training, competency and operational preparedness”.

The report, obtained by the website NuclearSpin, also said that Sellafield had already “identified the need to improve arrangements in this area [but] no effective remedial action was put in place”.

The service is a critical part of Sellafield’s management of nuclear safety and the HSE found it in breach of its licence conditions and the Management of Health and Safety at Work Regulations 1999.

This is not the first time the plant has been criticised by the HSE. A report in 2010 disclosed a number of safety problems at the site and the HSE ordered the closure for safety reasons of a plant for solidifying highly radioactive liquid waste. The executive also refused to endorse a “lifetime plan” outlining schedules for decommissioning the site over the next 110 years.

Sellafield was also recently under fire from the House of Commons public accounts committee over soaring project costs, large salaries and continuing risks. One committee member, the Great Grimsby MP Austin Mitchell, described Sellafield as “the biggest nuclear slum in Europe”.

Letters: Let’s put an end to utilities milking the consumer

Category : Business

Downing Street is promising “swingeing fines” on energy companies if allegations of manipulating the market in wholesale gas prices are proven – a nice little earner for the Treasury (Davey warns energy firms, 14 November). Fining utility and transport companies hurts only one group: their customers, for whom prices will rise further in order to meet the cost of paying fines.

What is appropriate in such cases is penalties that will really hurt those responsible – jail terms for fraud, disqualification and personal fines against directors, and orders from the court to suspend all dividend payments for a period of, say, three years and for any resulting cash balances, protected from accounting trickery, to be repaid to consumers in the form of rebates. However, the endemic consumer-milking culture of the privatised energy, utility and transport companies – reports over the weekend highlighted the scandal that is our water industry – could be ended through renationalisation by a bold enough government. Does any political party have the bottle?
Nigel Beatty
Hurstpierpoint, West Sussex

• Your report correctly described how price opacity in gas-trading markets sets a context in which price manipulation can occur (FSA examines whistleblower’s claims, 13 November). Moreover, the government is about to introduce an energy bill implementing electricity market reform which will make the precise amount of subsidies paid to nuclear and renewable energy sources very difficult to calculate, and hand over more control of the renewables market to the major electricity players. In the process this reform will effectively prevent independent developers from setting up renewable energy projects.

Independent analysts have already warned that the complex and highly opaque system of “contracts for differences feed-in tariffs”, that is proposed by the government, will create favourable conditions for major electricity companies to make money out of the complexity. Currently we have a relatively transparent method of calculating how much extra is paid for renewable energy, but this will disappear as the funding for “low carbon” energy sources is pooled together. What a coincidence it is that we will find it difficult to calculate exactly how much extra (on top of market rates) is paid for nuclear power. Proposals for a much simpler and cheaper “fixed feed-in tariff” (used in Germany) have been sidelined.
Dr David Toke
University of Birmingham

• The decision to defeat Labour in its bid to delay an increase in fuel duty of 3p a litre planned for January is yet another kick in the teeth for businesses who rely on the roads to function and operate (Report, 13 November). Can we please recognise the negative effect this is going to have on the haulage industry and the potential loss of jobs. Given the amount of fuel consumed on a daily basis, even a small hike in price means our costs increase significantly. We can’t always pass on these costs to customers, so we take the hit in an industry which has seen 50% of its market wiped out since 2008. The continued squeeze on costs will ultimately affect job creation and the expansion of businesses at a time when the country should be encouraging growth.
Al Bingle
Managing director, Bishop’s Move

Renewable energy will overtake nuclear power in UK, study says

Category : Business

Renewables will provide enough power for one in 10 British homes by 2015 if current growth rates continue

Renewable energy will overtake nuclear power in the UK by 2018, if current rates of growth continue, and will provide enough power for one in 10 British homes by 2015, according to new research.

The amount of electricity supplied by wind energy alone is up by a quarter since 2010, in a surprisingly good year for the renewables industry. While the government has notably cooled on wind power – more than 100 Tory MPs signed a statement this year opposing new windfarms, and the chancellor of the exchequer, George Osborne, has queried the future of subsidies – the industry has continued to grow, with investment in offshore wind up by about 60% to £1.5bn in the past year. Planning approvals for onshore windfarms also rose, up by about half, to reach a record level, according to the trade association Renewable UK.

Despite the outspoken opposition from many Tory MPs against wind power, there was a rise in the amount of onshore wind capacity approved last year for the first time since 2008.

Maria McCaffery, chief executive of Renewable UK, said: “These strong figures underline the importance of a secure trading climate to attract investment, especially in difficult times. That’s why it’s so important that the framework provided by the energy bill, currently under parliamentary scrutiny, must be right. Although we still have a long way to go to meet our challenging targets, we are firmly on track and gathering momentum.”

John Hayes, the newly appointed Conservative energy minister who has been an outspoken critic of windfarms in the past, told the Guardian he was proud of the UK’s wind energy industry. “Investing in cutting edge technology is very British,” he said.

Despite his past opposition to windfarms, he said he would support new turbines if built in suitable areas. “It’s about having the support of local people – that is the key thing,” he said. Measures to make it easier for local communities to benefit from windfarms – for instance, by taking a financial stake in the revenues – are to be brought forward by the coalition government.

The energy bill, originally expected to be debated next week, is likely to be delayed until later in November as ministers wrangle over the implications. There is a sharp split within the Tory party over how to treat renewable energy, as more than 100 of the Conservatives’ MPs earlier this year signed a letter opposing new windfarms. Peter Lilley, a vocal climate change sceptic, was appointed to the energy and climate change select committee last week in a move that some saw as an indication of a rightward shift in the government’s climate policy. But David Cameron has in the past said renewable energy would be crucial to the UK’s future prosperity.

Any last-minute changes to the energy bill risk alienating investors. Wind turbine makers are stalling decisions on whether to invest in new manufacturing plants in the UK, pending clarification from the government on its future energy policy. Several large companies, including Siemens, General Electric and Mitsubishi, are pondering building manufacturing plants in the UK, but will make no decision without firmer assurances from the government. The repeated insistence from Osborne that the UK’s energy future lies with the gas industry – a new “dash for gas” is under way, with the government clearing the path for 20 new gas-fired power stations – has unsettled renewable energy investors. “The constant talk about gas is not reassuring for us,” one wind investor, who could not be named, told the Guardian.

Renewable UK said that last year there were at least 137,000 people involved in the sector, with a further 654,500 jobs in ancillary industries.

British nuclear plans suffer blow as Chinese investors pull out

Category : Business

Two new nuclear projects in UK the suffer as firms in running to buy a stake pull out

The government’s nuclear energy plans were in trouble as Chinese investors withdrew interest in two projects and local councils postponed a decision on storing atomic waste.

Areva, the French nuclear engineering group, confirmed that it had pulled out of the running to buy a stake in Horizon Nuclear Power, the enterprise planning to construct new reactors at Wylfa in Wales and Oldbury in Gloucestershire. Areva said its partner, the state-owned China Guangdong Nuclear Power Group (CGNPC), had also shelved its bid.

“Areva and CGNPC have suspended their interest in the planned sale of Horizon Nuclear Power and did not submit a bid,” an Areva spokeswoman said, adding that the company was still committed to new nuclear in the UK through other avenues.

This is a blow for the government because Areva is at an advanced stage in getting regulatory approval for the design of its European pressurised reactor (EPR), while the Chinese are considered to have the deepest pockets.

Two other bidders, one involving US-based engineering group Westinghouse and the other led by Hitachi of Japan, are still in the running to take a stake in Horizon – although Westinghouse’s backer, another Chinese state-owned firm, China National Nuclear Power Corporation, is also understood to have withdrawn from the consortium.

“The Chinese could not get the commitments they were looking for from the British government,” said one source with contacts in the Beijing nuclear industry, adding that the problem was about technology rather than political issues. Some British MPs and commentators had raised questions about the wisdom of allowing Chinese state firms access to sensitive UK energy systems.

There have also been reports that Iberdrola, the Spanish group that owns Scottish Power, is considering dropping out of a separate consortium bid to build a new nuclear plant near Sellafield in Cumbria, while France’s EDF was said to be struggling to complete work on a generic design assessment it needs in order to proceed with building a new atomic power station in collaboration with Areva at Hinkley Point in Somerset.

The Office of Nuclear Regulation has been concentrating on a generic design assessment of EDF and Areva’s EPR facility but industry specialists said the process was unlikely to be completed by the end of November as planned in order for a final investment decision on Hinkley to be made by the end of the year. EDF insisted everything was “on track”.

The UK government was shaken in March this year when German utilities, E.ON and RWE, said they wanted to pull out of Horizon Nuclear Power, with a deadline for bids last Friday.

Neither E.ON nor RWE were willing to comment on the situation but the withdrawal of a leading name such as Areva plus the possible exit of the two huge Chinese groups will worry a government in desperate need of new atomic plants to meet a looming power shortage when old nuclear and coal-fired stations are retired.

Any total withdrawal of the Chinese from Horizon will put more pressure on Westinghouse, now owned by Toshiba, and Hitachi, whose nuclear technology is not yet near any licensing approval for use in the UK.

The other project eyeing new nuclear in the UK is NuGen, owned by Spain’s Iberdrola and France’s GDF Suez, which is considering reactors in Cumbria and says it will make a decision by 2015. British utility SSE has already withdrawn while Iberdrola has been unable to quash speculation that it is consiering a similar move in reaction to heavy financial commitments elsewhere in the UK.

Meanwhile, the government’s hopes of proceeding with much delayed plans for a high-level waste repository in the one area of Britain that has shown any appetite for such a scheme were also set back. Three councils, Cumbria county and Allerdale and Copeland districts, this week delayed a decision on new nuclear waste sites – due in October – until January.

China could take key role in UK nuclear infrastructure through Hinkley Point

Category : Business

• EDF in talks with China to share £10bn reactor costs
• French company’s debt levels rocket to £30bn
• Security concerns raise possibility of government taking ‘golden share’ in development

EDF has been holding talks with China about sharing the soaring cost of building £10bn worth of new reactors at Hinkley Point, Somerset.

The move underlines growing pressure on the French company’s internal finances and has reignited a fractious debate about Communist state-run businesses playing a critical role in sensitive western energy infrastructure.

The overtures to Beijing’s state corporations – as well as approaches to Middle Eastern sovereign wealth funds – come as EDF faces growing investment demands in France and the UK that have sent debt levels rocketing to €39.7bn (£30bn).

“We have always said we were open to the idea of other partners investing in the project. As we approach our final investment decision, it is right to consider funding options including seeking additional partners,” said an EDF spokesman.

“Plans to build new reactors are advancing well and have achieved a level of maturity to make it attractive to potential new investors,” he added. “However, it is too early to say anything about the outcome [of these talks].”

EDF Energy owns and operates eight of the UK’s existing 10 nuclear power stations and has plans to expand two of these sites, Hinkley Point and Sizewell, Suffolk, by building four new nuclear reactors.

The company plans to make a final investment decision on Hinkley Point C by the end of this year but remains upbeat about the scheme, on which it has already spent £1bn.

While EDF would not publicly confirm it, well-placed industry sources say the group, which has a 20% partner in Centrica already, has been in discussions with China’s State Nuclear Power Technology Corporation (SNPTC) and China Guangdong Nuclear Power Corporation (CGNPC). These are the rival state-owned companies that have already teamed up with two Western consortiums vying to buy the Horizon Nuclear Power company from RWE and E.ON. Horizon owns sites at Wylfa, on Anglesey, and Oldbury, South Gloucestershire.

SNPTC is in a bidding team with Areva, the French engineering company that is already working with EDF in Somerset, while talks have already been held by Chinese officials with the UK’s Department of Energy and Climate Change about independently developing other nuclear sites in Britain such as Hartlepool in the north-east of England.

Mark Pritchard, a Conservative MP and member of the parliamentary joint national security committee, said any Chinese involvement in EDF’s new nuclear plans would raise concerns on a number of fronts and could even require a direct UK government involvement through some kind of golden share.

“If there is significant Chinese financing, then the coalition government should consider retaining a controlling stake,” he said. “There would also need to be national security safeguards over any Chinese design and build.”

“Restrictions should also apply as to the number of Chinese workers who could work on UK-based nuclear projects. Major nuclear infrastructure projects are an opportunity to create tens of thousands of new jobs for UK workers.”

Nick Butler, a former energy adviser to Number 10, has earlier raised concerns about Chinese involvement in any potential Horizon bids. In a recent FT blog, he wrote: “They will be inside the system, with access to the intricate architecture of the UK’s National Grid and the processes through which electricity supply is controlled, as well as to the UK’s nuclear technology.”

Meanwhile, EDF last month revealed its debt levels had jumped nearly 20% in the first half of the year, partly because of €10bn in new spending commitments demanded by the French government on local reactors in the aftermath of the Fukushima atomic crisis in March last year.

The energy company – majority owned by the French state – is also facing mounting cost overruns and delays on its planned new reactor scheme at Flamanville in northern France.

A final green light for Hinkley Point C depends on receiving an acceptable “strike price”, agreed with the government, that would guarantee future returns.

EDF insists this strike price – seen by critics as unfair subsidy – will be lower than the £140 per megawatt hour that is roughly the current cost of producing offshore wind power.