Could nuclear sell-off be another taxpayer bail-out?

David Lowry

The Guardian, Wednesday November 19 2008

Late in September, the leading UK nuclear generator, British Energy (BE), said it had concluded a deal to be bought by France's sole nuclear generator, Electricité de France (EDF). The buyout creates a new company - technically, called Lake Acquisitions Ltd - to run most existing UK nuclear plants, as well as being keen to build new ones. It was immediately indicated that the Treasury, which would receive £4.4bn for the government's 36% shareholding in BE, would use the money raised to top up the fund set aside to decommission the existing nuclear plants.
So who will now be responsible for the clean-up of existing BE sites. If land is transferred from BE to other atomic aspirant owners, who will hold the liabilities for radioactive remediation? Who will be responsible for the insurance cover of existing reactors, especially any accident that involves off-site radioactive contamination. And who becomes responsible for other assets or liabilities of around 15,000kg (15 tonnes) of plutonium from BE's advanced gas-cooled reactors (AGRs) and the spent nuclear fuel discharged from the reactors?
EDF would not answer questions on the ownership or transfer of liabilities under the proposed deal, saying that a 100-page document on the offer released to the stock exchange in September was the "appropriate public reference". BE also refused to answer questions, as did Financial Dynamics, the London-based PR firm contracted by BE.
When the government agreed to foreign company-led consortiums taking over the management contracts for Sellafield in July and Drigg low-level radioactive waste site in March, it was forced to agree to become the insurer of last resort. And Dick Raaz, who heads URS Washington group's UK operations at Drigg, told a Nuclear Industry Association fringe meeting at Labour's conference in Manchester that unless his company's risk was capped at Drigg, it would not have taken over the contract.
On the Sellafield insurance deal, former energy minister Malcolm Wicks said, in a written answer to Labour backbencher Paul Flynn on July 14: "The department . . . expects to have to grant an indemnity against uninsurable claims arising from a nuclear incident that fall outside the protections offered by the Nuclear Installations Act and the Paris/Brussels Convention to whichever of the four bidders for the Sellafield contract is successful."
In September, Wicks denied this amounted to a subsidy. But last month, the Guardian reported how Wicks had apparently broken Trasury guidelines by failing to inform MPs properly, denying them the right to comment critically on the insurance bail-out. The question remains: is EDF to enjoy a similar bail-out by the government, lumbering the taxpayer with the multi-billion-pound tab?
And with Centrica, parent company of British Gas, keen to take a £3.1bn stake in the new nuclear company, will it become the proud owner of several dozen bombs-worth of plutonium, too?
The most the government will say came in a written parliamentary answer on October 30 from new energy minister Mike O'Brien: "British Energy owns a relatively small quantity of plutonium that has arisen from reprocessing at Thorp [the reprocessing plant at Sellafield]. British Energy treats the plutonium as a zero-value asset, and records a liability of £4.8m (discounted) in its accounts relating to the management of the plutonium."
Ed Miliband, the new secretary of state for energy and climate change, should clarify these unanswered complexities now.
• David Lowry works as an independent research consultant.