Recommendations & Conclusions
5 items
4
Recommendation
Third Report - The future of the Advanc…
Deferred
EDFE’s timetable for the closure of the stations will result in a significant reduction in the UK’s generating capacity until new capacity comes online. In 2020, nuclear power accounted for 16% of UK electricity generation. The closure of seven nuclear stations by 2028 will therefore have a significant impact. EDFE …
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EDFE’s timetable for the closure of the stations will result in a significant reduction in the UK’s generating capacity until new capacity comes online. In 2020, nuclear power accounted for 16% of UK electricity generation. The closure of seven nuclear stations by 2028 will therefore have a significant impact. EDFE considers that the AGR stations will be reaching the technical limit of safe operations and so their use could not be extended while we wait for new generating capacity of come online. Only the existing PWR station at Sizewell B and the new station at Hinkley Point C are expected to be operating when the last of the AGR stations The future of the Advanced Gas-cooled Reactors 7 closes. While the Department acknowledges there will be a gap in generating capacity, it is not concerned with there being a shortage owing to its confidence that electricity capacity could be bought from other sources ahead of time. The UK’s old nuclear station sites could be reused as locations for the development of new small modular reactors. Both NDA and EDFE told us they are in active discussions with parties interested in exploring these new opportunities. Recommendation: The Department working with the Office for Nuclear Regulation, EDFE, and Ofgem should urgently review whether it would be technically feasible, safe, and cost-effective to extend the lives of any of the remaining operating stations if needed and report back to the committee within 4 months. The Department and NDA should publish plans within 12 months setting out how they will make best use of NDA’s nuclear sites in future, including whether they are suitable for new nuclear infrastructure, such as modular reactors. In particular they should clarify how the transfer to the NDA from EDFE will allow for these Modular reactors.
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Government response AI summary
The government disagrees with the recommendation as drafted, stating that extensions of station lifespans are a matter for EDF and the relevant regulator (ONR). They will ask EDF to set out their plans for how they will work with the regulator to see if extensions …
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HM Treasury
22
Conclusion
Third Report - The future of the Advanc…
Deferred
There are still some important aspects of transfer that are yet to be agreed. The NDA and EDFE recognise there are issues around transfer that will need to be agreed but believe they have sufficient time to sort out the remaining points.35 They established nine working groups in 2021 to …
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There are still some important aspects of transfer that are yet to be agreed. The NDA and EDFE recognise there are issues around transfer that will need to be agreed but believe they have sufficient time to sort out the remaining points.35 They established nine working groups in 2021 to negotiate what will be transferred. The NAO, however, found that some issues surrounding the transfer of AGR stations to the NDA and Magnox Ltd were likely to become pressing long before transfer. These included: clarity of what the transfer means for the workforce on AGR stations; building Magnox Ltd’s capacity to take on management of the stations; Magnox Ltd becoming the site licensee at each station; agreement on how contracts with suppliers to each station will be handled; and a lack of certainty about the exact land boundary and facilities that the NDA and Magnox Ltd will receive.36 The NDA told us the cooperation between it and EDFE was “excellent”. EDFE similarly noted that both had a common interest in ensuring a seamless transfer, but acknowledged that there was a lot of detail to work through.37
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Government response AI summary
The department agrees with the recommendation to provide a detailed plan and timetable for the transfers, with a target implementation date of May 2023, and proposes sharing the Hunterston B plan with the Committee.
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HM Treasury
23
Conclusion
Third Report - The future of the Advanc…
Deferred
The Department’s business case estimates that the transfer of the stations will cost £300 million, but given the uncertainties the cost and liabilities could be as large as £1.8 billion. The uncertainties include a potential need to update IT systems, the condition and nature of assets, and the cost of …
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The Department’s business case estimates that the transfer of the stations will cost £300 million, but given the uncertainties the cost and liabilities could be as large as £1.8 billion. The uncertainties include a potential need to update IT systems, the condition and nature of assets, and the cost of employee pension contribution and redundancy payments.38 The Department and NDA told us that land and people were the two biggest transfer risks. The Department explained that it was not possible to get sufficient clarity on these areas while negotiating the main framework of the deal, but recognised that it will need clarity over, for example, which parcels of land owned by EDFE will transfer over and which people and skills were needed.39 The NDA similarly recognised that there remained significant issues to be worked through, and told us that while it had a broad picture, it needed to work up specific plans for each site and each employee base and understand the implications. It explained that the cost range for the transfer of the stations reflected numbers that were not settled yet, such as the potential pension liabilities that may transfer across from EDFE.40
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Government response AI summary
The department agrees with the recommendation to provide a detailed plan and timetable for the transfers, with a target implementation date of May 2023, and proposes sharing the Hunterston B plan with the Committee.
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HM Treasury
24
Conclusion
Third Report - The future of the Advanc…
Deferred
We were concerned by the number of issues still to be resolved in the time available. We enquired about progress regarding Hunterston B, the first station expected to transfer, especially as discussions around pension contributions can take time to sort out. The witnesses told us they were in discussion as …
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We were concerned by the number of issues still to be resolved in the time available. We enquired about progress regarding Hunterston B, the first station expected to transfer, especially as discussions around pension contributions can take time to sort out. The witnesses told us they were in discussion as to which staff would come across but it was still too early understand the potential pension liabilities as it was not yet certain which workers will want to move over to the NDA or where within the organisation would best suit their skills.41 34 Qq 10, 53, C&AG’s report paras 12, 4.4 35 Qq 53, 54; C&AG’s report para 12 36 C&AG’s Report, para 12, 2.19–2.20 and 4.2–4.5 37 Qq 53, 57, 58 38 Qq 65, 67; C&AG’s Report para 4.6 39 Qq 53, 55, 67, 68 40 Q 68 41 Qq 65, 68, 70, 75 16 The future of the Advanced Gas-cooled Reactors
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Government response AI summary
The department requests a revised implementation date of May 2023 for the delivery of detailed transfer plans for AGR stations, starting with Hunterston B, and proposes sharing the Hunterston B plan with the Committee when completed, along with a summary of progress for the remaining …
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HM Treasury
25
Conclusion
Third Report - The future of the Advanc…
Deferred
We wrote to the Department and HM Treasury number of times (see Annex 1) after our evidence session and asked it to clarify what it had agreed with EDFE in terms of the land and buildings that will be transferred to the NDA, and how it planned to resolve any …
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We wrote to the Department and HM Treasury number of times (see Annex 1) after our evidence session and asked it to clarify what it had agreed with EDFE in terms of the land and buildings that will be transferred to the NDA, and how it planned to resolve any issues or disagreements between what will be transferred. Both departments responded and told us that a suite of legal agreements had been put in place which provided a framework for the transfer of assets and resources when sites were being decommissioned. They also explained that, in practice, the land required for decommissioning will be determined on a site-by-site basis, reflecting technical, operational, and regulatory requirements. We were told that joint planning work between EDFE, Magnox Ltd and NDA was underway to identify, prioritise and address matters relating to station transfer, and that this was “progressing towards a detailed joint plan for transfer starting with Hunterston B by the end of the year”. Further, if disputes were to arise in any of these areas, legally binding resolution procedures, as set out in the legal agreements governing the transfer, would come into force as well as governance and escalation forums if required.42
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Government response AI summary
The department requests a revised implementation date of May 2023 for the delivery of detailed transfer plans for AGR stations, starting with Hunterston B, and proposes sharing the Hunterston B plan with the Committee when completed, along with a summary of progress for the remaining …
Read full response →
HM Treasury