Energy Security and Net Zero Committee
Oral evidence: Work of the Department for Energy Security and Net Zero, HC 396
Wednesday 18 December 2024
Ordered by the House of Commons to be published on 18 December 2024.
Members present: Bill Esterson (Chair); Ms Polly Billington; Sir Christopher Chope; Torcuil Crichton; Wera Hobhouse; Josh MacAlister; Anneliese Midgley; Ms Julie Minns; Luke Murphy; Bradley Thomas; Claire Young.
Questions 162 - 253
Witnesses
I: Corhyn Parr, Chief Executive Officer, Nuclear Waste Services; David Peattie, Group Chief Executive Officer, Nuclear Decommissioning Authority; and Euan
Witnesses: Corhyn Parr, David Peattie and Euan Hutton.
Chair: Welcome to this Energy Security and Net Zero Select Committee session on the work of the Nuclear Decommissioning Authority, as part of our initial scrutiny of the work of the Department for Energy Security and Net Zero through the focus of its various executive agencies and public bodies.
We welcome the NDA today. Please introduce yourselves before we start our questions.
David Peattie: Thank you, Chair. It is a great pleasure to be before the Committee today; I am David Peattie, the group chief executive of the UK’s Nuclear Decommissioning Authority.
Euan Hutton: Good afternoon. My name is Euan Hutton; I am the chief executive of Sellafield Ltd.
Corhyn Parr: Good afternoon, everyone. I am Corhyn Parr, chief executive of Nuclear Waste Services.
Q162 Chair: Thank you all very much for joining us. David and I had a brief conversation on Friday, and you were kind enough to write to me with some details. I noticed a comment in your letter about reducing the UK’s highest hazards and risks. Many people still have an association of the decommissioning of nuclear waste with risk and danger of waste and radiation. Tell us how far you have come since the days when I was younger and that was the perception that most people had.
David Peattie: Yes, indeed; I remember those days as well, Chair. I will kick off and then ask colleagues to add anything that they wish.
The work of the Nuclear Decommissioning Authority goes back almost 80 years to the beginning of the nuclear development period in the UK. It began with work done on our civil sites to support the defence programme immediately after the second world war. That led to a series of separate builds of nuclear power stations at Sellafield and then at other sites around the UK.
I think it is fair to say that in the context at the time, the last thing on the mind of the people building those stations and getting ready to support the defence programme and indeed generate electricity was decommissioning, or how on earth we were going to deal with the waste and the reactors that would ultimately be left in our care.
I am pleased to say—no doubt Euan will comment—that this year, almost 80 years on, is the first year that we have been successfully removing material from the most hazardous sites at Sellafield, known as the legacy ponds and silos. They are exactly what they are described as. Some of you will have seen them: they are big open-air concrete ponds and huge silos that were used to store waste from those reactors over many decades.
As you will see from the various papers, we still have about 120 years to go, believe it or not—I know it is an extraordinary length of time—before we can clean up all our sites, with an estimated discounted cost to the UK taxpayer of £105 billion. We spend £4 billion a year on that. We earn £1 billion. If I may briefly digress, Sellafield particularly is always seen as a liability for the country, and indeed it is—that is where the highest-hazard risks are—but it is also a huge asset, with the skills of the workforce there and the work we do to support the EDF AGRs that are currently generating power for the UK. We refuel those, we defuel the ones that are coming off the generating system, and we look after the world’s largest stock of civil plutonium at Sellafield, which is one of our highest priorities.
To quickly summarise, rather than giving an even longer answer: we have been at this for a very long time, and we will be at it for a very long time. We believe we have the right skills. We are world-leading in many of these areas. Our big focus is on Sellafield and reducing the hazard there.
Q163 Chair: Thank you very much. We will explore much of what you said in detail in the next hour or so. At this point, I should declare my membership of the nuclear APPG and of GMB union; others will declare their interests as we get to them.
The National Audit Office recently examined whether the NDA and Sellafield Ltd are taking a sustainable approach to decommissioning—your words to me, in fact. You said that the report presents a fairly balanced picture. It is curious that you say “fairly balanced”. To what extent does it not present a balanced picture?
David Peattie: We were very involved in the preparation of the NAO report and worked closely with the NAO team, and I think “fairly balanced” is our fair assessment of it. At the heart of it, for me, is that in the overall assessment the NAO was unable to say yet that the NDA and Sellafield were delivering value for money for the taxpayer.
I am the first to admit that there are areas where we can improve, particularly in our capital projects. The NAO itself has said that its prime criterion for measuring value for money is assessing the outturn cost of capital projects, compared with the initial estimate of those capital projects a priori.
The nature of our projects is that they are largely first-of-a-kind: they have never been done before anywhere in the world. They are very complex and there is always a degree of optimism bias, particularly in the teams we tend to have, who have a real gung-ho attitude of an ability to get things done. I think that that has led to a bias of underestimating the costs at the start of the project and then tending to disappoint because we end up costing a lot more than we originally forecast.
Q164 Chair: Do you think that the NAO spotting that is unfair?
David Peattie: No, I don’t think it is unfair. Under the NAO’s aegis, it rightly looks at a fairly narrow definition of value for money. It has a difficult job assessing value for money, particularly in our areas. For instance, how do you assess the value to the nation of keeping 140 tonnes of plutonium safe and secure? How do you put a value on the notion of the skills we have internationally recognised at Sellafield? How do you put a value on the notion of keeping the AGRs, keeping the lights on?
Now that it is in the public domain, we can talk about this: in 2018 we were asked to help with the clean-up of the Salisbury poisoning after the Novichok poisoning of the Skripals. We were very keen to help the UK, and some of our heroic workers from Sellafield went to Salisbury to help with the clean-up. Again, how do you put a value on that?
I am trying to paint an impression here that we do a hell of a lot more than just manage capital projects.
Q165 Chair: Would you have liked the NAO to give you a bit more credit?
David Peattie: I think it has given us a fair amount of credit in this report. It talks about how the reorganisation of the NDA over the last few years has already added £170 million of savings a year, and there is more to come on that. I have encouraged the NAO, and will do so at the Public Accounts Committee later in the year, to perhaps think more broadly than just looking at that narrow definition of value for money.
Q166 Ms Billington: I am interested in the idea of optimism bias. What are you doing to correct it?
David Peattie: That is a great question. We are doing a lot, I would say. One issue we have often had is coming up with single-point estimates for our capital projects at the start. There is a technique known as reference class forecasting that is used in the oil and gas sector, where we look at a major capital project and break it down into its constituent parts. You can benchmark each of the individual bits and then develop a broader range at the start than a single point. We know that Treasury is very keen on single-point estimates, but I think we are starting to persuade people that for these projects, carrying a range—and it could be quite a broad range, say plus or minus 100%—is a more sensible approach. It is about saying to our teams, “You don’t have to just put your heroic estimate in all the elements of this. Step right back, think about what might go wrong and remember that you have a range.”
Q167 Ms Billington: I am sorry to press the point, but you are an organisation in an industry in which attitudes towards risk are a significant part of whether you succeed or fail. Having an optimism bias in your costs seems a bit out of kilter. I would have thought you would be somewhat robust on risk—except in the cost scenario, it seems.
David Peattie: Let me be clear: we are absolutely robust in our approach to nuclear safety on all our sites.
Ms Billington: Yes, but not on cost.
David Peattie: When our teams are being asked, “Assess what you think it will cost to clear this building,” I think it is human nature to say, “If this goes this way, it will only cost this.” We tend to always surprise ourselves on the downside. In other words, we rarely go into a building or a facility that it is better than we thought it was. That has been the hard bit. We are improving; I think we have more to go, and the NAO report is helping us with that.
Q168 Chair: I think it is bit odd that you are not understating the level of risk, on the one hand; I thought there was a way of measuring such that you know how much risk you are expecting and how much it will cost. I am not sure that that quite comes across. Rather than continuing to press the point, can I ask you to confirm that as far as you are concerned, you are not going to be underestimating costs from now on?
David Peattie: Yes. In all the re-cost estimates on our new projects, I think we are getting a much more balanced, realistic approach. As I say, we are using ranges rather than single points to acknowledge the uncertainty in these big capital projects.
Q169 Chair: Is there anything particular that keeps you awake at night?
David Peattie: That is a great question. I am a good sleeper—always have been. I trust the team; we have two of the chief executives from our operating companies with us today. We have a very strong team across the sector. I am always conscious that we carry a very heavy responsibility on behalf of the nation for the jobs that we do, but equally I am always aware it is a great privilege to hold these jobs. The four things I carry with me, my big worries, are the four Ss: safety and security, skills, spending and cyber.
Q170 Chair: Corhyn, does anything keep you awake at night?
Corhyn Parr: We have been managing radioactive waste and disposing of it for many decades. For me, it is more about the future plan for the geological disposal facility. It is a complex project. It will probably be the fourth in the world. It is about bringing the experience from the global sphere into our project here in the UK.
Chair: We will have more questions on the GDF. Euan, how about you?
Euan Hutton: I don’t worry about safety and security, because of the quality of the people that we have and the focus that we put on those areas. I am sorry, I am really boring, but it is the resilience and the skills. The thing that I worry about is making sure that we can continue to attract the next generation to bring to the organisation the things that we will need for what will be many decades of really interesting work.
Q171 Chair: Have any compromises been made during the time of austerity in Government spending that you hope to reverse in a period in which perhaps there will be more money available? Do you think that there will be more money available?
David Peattie: We have never compromised on safety or security; that is the most important thing to say. Over the last few years, we have had increasing grant funding to the NDA through Treasury and our Department—formerly BEIS, now DESNZ. I think that next year will be particularly challenging. We have often had as much money as we need but not as much as we want. I think that pressure can be helpful in forcing further discipline on where we spend our precious funds. Under this new organisation we have with our four pillars, as we call them, we can now manage the whole estate as a portfolio. Previously, we had to run each site virtually under its own specific budget and it was frankly impossible to move funding around. That really helps us, and has done for the last couple of years. I think that we will have to do more of that going forward, given the state of the nation’s finances.
Q172 Chair: How much pressure do you get from the Government on reducing spending? How much in the way of efficiency savings have you made in recent times?
David Peattie: We work hand in glove with our Department. There is a very capable sponsor team dedicated to working with us in our Department. The Treasury also has a dedicated team for nuclear across Government, who meet regularly with us at least once a month. I have a weekly meeting with counterparts in the Department. We have a plan now to see how we can improve our so-called back office spend and direct more activity to the frontline. We are aiming for a 5% per annum improvement over the next period; we have already begun work on that in anticipation of further pressure from the Treasury in phase 2 of the spending round.
Q173 Claire Young: The current strategy document, which is due to be replaced next year, outlines the plan for current fuel types. Will you need to create new processes or facilities for newer reactors such as the small modular reactors?
David Peattie: That is a very good question. We don’t believe we will. There will be different fuel types and storage of their fuel, for a period, will be on those specific sites. I am pleased to say that at Euan’s site at Sellafield we have this year introduced something called a 63-can rack, which does what it says on the tin: it is a rack that can hold 63 cans and which is much more densely packed. It will avoid our having to build new facilities for storage, particularly for the fuel for the future reactors.
Then, of course, we have the capability to build new storage over the next decades. It is interesting: when I took on this job a few years ago, we were very much in decline, albeit over 100 years, because the nuclear sector was in decline. Now it has flipped on its head and we are a growth business for decommissioning the AGRs. The EDF will come over to us in due course, starting at Hunterston in 2026.
By the end of this decade, we will have added a huge amount of work. Then we will be involved, ultimately, in supporting the SMR agenda in its post-production world. We offer different challenges, though: I guess there will be multiple sites rather than big, monolithic, gigawatt-scale reactors.
Q174 Claire Young: Is the challenge coming from the nature of the sites rather than the material?
David Peattie: That’s right, but we are confident that we have enough capacity for continuing with the AGR refuelling and the defuelling with the work we have done.
Q175 Claire Young: What about waste from fusion reactors, if and when they come online?
David Peattie: Interestingly, waste from fusion may have very different characteristics and will potentially be nowhere near as hazardous as the product from fission reactors, which of course brings with it quite a lot of nasty stuff.
Q176 Claire Young: You do not see any different approach being needed? Well, it sounds like you will need a different approach, but it will not need such—
David Peattie: It will need a different approach, but maybe not quite the skills that we have developed over the last 80 years, I think in a good way. The risk associated with fusion waste will be less. There is always the GDF, of course, where ultimately the high-level waste will find its way, and if there is high-level waste from fusion, that is where that would go to.
Q177 Claire Young: You talked earlier about your £1 billion income. Does the money from EDF to take oxide wastes cover the cost of storing and disposing of those wastes?
David Peattie: Yes, it does, if I understand the question. It certainly covers the costs of defuelling and refuelling. It is a lucrative arrangement for the UK that EDF pays for every year.
Q178 Claire Young: Is there scope for a more lucrative arrangement?
David Peattie: It has been a long-standing contract. I think we can always examine whether it can be improved. We think it is fair at the moment for both sides. It has run for many years and we have a good relationship with EDF. It is symbiotic: it is our trains, for instance, that move the material from the EDF site to Sellafield. I think it is a fair arrangement for the time being.
Q179 Chair: You were talking about the opportunities of new nuclear. Do you see it as a chance to extend the life of fuels?
David Peattie: To some extent. Hinkley C, for instance, which is a different reactor from the advanced gas-cooled reactors, will have a higher burn rate, so it will be more efficient use of fuel at Hinkley C—and at Sizewell C as well, if it goes ahead. The big change will come in redesigning and thinking of different types of fuel. I think that is where the SMR has real potential for different types of fuel. While they are in concept in many places, they have yet to be used in anger. There is a real opportunity there.
Q180 Bradley Thomas: I want to understand a little about the thinking and the approach towards plutonium. I understand that a decision is to be taken fairly soon. Given that it could be used in small advanced nuclear reactors, why dispose of it rather than put it to an alternate use?
David Peattie: There are 140 tonnes of plutonium held at Sellafield very safely and securely. It is probably the most hazardous material in the UK. As I said earlier, we are very confident that we are looking after it well. There is an imminent decision under this Government to decide whether to put the plutonium beyond reach or to contemplate its reuse. It is currently in a form that is not that ready for reuse. We have to adjust it, we have to do things with it physically and chemically to put either beyond reach or, in theory, reuse.
Our technical team’s view is that to get it in the shape that you could reuse, the security implications of the material and where it could end up, especially if you have dispersed sites around the UK with different SMRs, suggests that they should be using more conventional fuels, a uranium-based fuel that has been used for many decades. People speculate, and rightly so, about why this is not more of an asset than a liability, but our considered view is that the right thing to do is to put the plutonium beyond use. That itself will take some time, with the skills at Sellafield.
Q181 Bradley Thomas: Given the risks that you have described and outlined, do you think the relative imminence of the decision is the right one, rather than to delay?
David Peattie: Correct, yes.
Q182 Wera Hobhouse: The question has nearly been answered, but I had a meeting with a company called Nucleo about its nuclear advanced modular reactor. It wanted to know what the strategic rationale is for prioritising the long-term storage rather than exploring reuse. You have just explained that, but are you in conversation with these companies that are exploring new technologies?
David Peattie: Indeed we are. We support Great British Nuclear in the work that it is doing to develop the SMR programme and potentially, beyond that, AMRs. The nuclear sector is quite a small family and we meet with all the smaller companies, whether they are US-based like X-energy or Nucleo, the Italian one. We think that we have the right judgment on behalf of the UK in how we handle this material.
Q183 Josh MacAlister: David, on the plutonium question, what are the opportunities for R&D programmes that could be exploited without necessarily changing the plutonium decision for the next few decades that was for putting it beyond use? I am thinking particularly about americium and the opportunities there. Do you think that there is a way of keeping enough of the door open for UK-leading research and development in some of those spaces for a few more decades before every bit of it is put beyond use?
David Peattie: You make a great point, Josh. The National Nuclear Lab, which is the UK’s powerhouse of R&D in this area, is situated on the Sellafield site. It is a little enclave and it is a separate body, reporting also into DESNZ, but world-leading—americium, space batteries. We have plutonium in space batteries in outer space, for instance; it is a different isotype from the ones that we are carrying.
The short answer is yes, we can and should continue to lead internationally on that front and retain sufficient material. You do not need much of this stuff to carry out that important R&D work. NNL is very well protected: it has its own separate armed security around its building, in addition to the armed security around Sellafield.
Q184 Josh MacAlister: I should say, just to register it, that I am an officer of the nuclear energy APPG. I welcome the NDA coming to the Committee. I think that this is an often overlooked, but really critical part of the work of the Department for Energy Security and Net Zero. It is very welcome that we are able to get into detail on this.
I appreciate that the remit for the NDA is squarely on decommissioning, but I have a question. With the incredible assets that you have, particularly in the workforce, the world-leading skills that you mentioned, which we definitely have in west Cumbria, some of the adjacent fields in research and development and the history of UK AEA—with the original civil programme and where we have got to now, having had a few dormant years of new nuclear—do you think that the NDA remit is right for the future in being so focused on decommissioning?
I am asking the three of you to think forward here. Do you think that there is an opportunity to widen out into wider nuclear development—not taking on the role of GBN, not building new nuclear power plants, but having a remit that recognises that those assets could be put to wider use?
David Peattie: As I think I said earlier, while we were originally in decline as a business, part of our growth agenda is to play a broader role across the sector. I know our Department, our sponsor, and the Treasury particularly are very keen that we stick to our core mission of decommissioning the 17 sites, but increasingly we are broadening.
We used to be demonstrably neutral in our view on new nuclear. I am pleased to say that we have shifted that position now and we are publicly in support of new nuclear under this Government’s agenda for energy security and net zero. We supported Great British Nuclear. We seconded 19 people into it, including the chief executive, Gwen. Those soft influences are the best way we can encourage—
Q185 Josh MacAlister: Would you be interested in harder forms of influence or role?
David Peattie: We have enough on our plate right now, especially with AGRs coming on before 2030. That is another seven stations to think about. The plan is for the Vulcan station, which was the MOD’s submarine testbed adjacent to Dounreay in Scotland, to transfer across to us. We are growing our transport business. We have just won a contract with Tesco for moving their material up the west coast. Believe it or not, one of our trains will be pulling that. We are stepping out within our area and I think continuing with that softer style is—
Josh MacAlister: You think you have got it right?
David Peattie: I would never say we have got it right. We are making steps to try to improve every day; I am always happy to listen. Ultimately, we are part of Government. We are public servants and we will follow the steer of our Department.
Q186 Josh MacAlister: This is a linked point on land. The NDA has a number of sites and bits of land that are not currently being used for operational purposes, including the land at Chapelcross, Sellafield, which I am very aware of and which we have had lots of conversations about over recent months, and Harwell. Are you making full use of the growth potential of the land that you hold? Are there particular sites where you think in the near future you could be making greater use?
David Peattie: That is a good question, and one that is current for us right now. At Chapelcross we are about to engage with the local community to build a solar farm there. Chapelcross is in Dumfries and Galloway in the south of Scotland. We have a hydro scheme in Snowdonia called Maentwrog, a wonderful piece of hydroelectric, truly great energy that has been generating for 100 years. At Harwell we have already released some land, and in Dorset at a site called Winfrith we have released some land to heathland. You are right, though, there is more we can do to enable and encourage all sorts of energy park-type activity on our land, whether that is in Scotland, Wales or England.
Q187 Josh MacAlister: What is the barrier to doing more of that?
David Peattie: We tend to need partners wherever we do this, whether it is public sector partners like GBN. We have been close to them at Wylfa in Anglesey and at Oldbury where they have bought some extra land. If it is not a public sector partner, then we are thinking about a local community, as we are in Dumfries. What we have not yet done is a pure private sector play, if I can call it that, with people interested in hydrogen, say, or even direct SMR generation. I think that there is more to come on that, and as the nuclear sector grows and continues in all its forms around the world, we should feel that we are part of that. We do, after all, have the land, as you rightly say, owned on behalf of the taxpayer, which has already been licensed for nuclear activity, largely, and a load of land beyond that. The short answer is that I do not think that we are using it all to the best efficiency, but we are very open to keeping working on that.
Q188 Josh MacAlister: The final question is about the freedom and flexibility of procurement processes, given your role as a Government arm’s length body, and whether you have the range of freedoms that you would want in order to back the supply chain and particular communities in the UK in the way that, for example, EDF might be able to.
David Peattie: We are more constrained, rightly, under public sector rules. It does force transparency, which I think is a good thing. It drives competition and is part of the overall package that we have to work with as we go forward. We do benefit from being Government-owned, in that the supply chain will see us as a good customer, ultimately with the Government behind us, and that can help.
Q189 Josh MacAlister: I would argue that EDF is seen in those terms as well, as transparent and probably a good buyer. I don’t know; there may be people watching this who have very different views on that, but I imagine EDF would be seen in that light, and yet it has a bit more freedom. I appreciate that you are operating within the rules that you are operating within. Could you see the benefits of greater freedoms if the NDA were able to operate like EDF, BAE Systems or others?
David Peattie: There might be, but I think we are always going to be constrained by the requirements of public sector expenditure, rules around the Treasury, and the new rules that are coming in on procurement. We have been able to work within the rules, but they can add time to the overall processes.
Q190 Josh MacAlister: The NAO report shows they had lots of time to work at Sellafield. I speak for myself: I do not think that they are fit for purpose in making speedy decisions, and I think that probably lots of people in Government would share that view. I appreciate that you are operating within the mandate that you have been given, but may we hear any views and opinions you might have about its limitations?
David Peattie: There are limitations with any structures. I also think that there is more that we could do internally to improve our own processes for approvals. Some things can take far too long because of the number of layers of approval, and we are looking into that. That was a conclusion of the NAO report, which we are taking very seriously.
Q191 Claire Young: I should have declared an interest as a member of the nuclear energy APPG.
I think that you have already partly answered this question, but would you like to add anything about whether the new reactors being built, particularly the small modular reactors, will use the same materials as legacy sites, or whether there is anything notably new?
David Peattie: There are two things that will be notably new. The first thing is a better burn-up rate, with a more efficient use of the fuel. We are already seeing improvements in that, including with the new reactors at Hinkley C and potentially Sizewell C. Implicit in that is less spent fuel, less waste, which is good, and things being able to operate at higher temperatures. That makes things more efficient and potentially makes AMRs available at sites where you need not just electricity from a turbine, but also heat to use directly.
The second area that will be different is in the multiple deployment. The beauty of a small modular reactor is that you can design one and build many and then deploy them at multiple sites. It is not yet clear, and there will be work to be done with our regulator, the ONR, to think about how those are fuelled at the start of their life and then how they are refuelled during their productive life. That will offer some challenges and opportunities for the sector as it thinks about that.
For the last 70 years, we have had very few big sites generating essentially gigawatts of power from the Magnox stations and the AGR stations. From having a few of our trains able to move the material backwards and forwards as needed, we are going to move to a much more dispersed model of refuelling and defuelling. With the improved efficiency of the fuel, the frequency should potentially reduce. There may be some reactors that can run for a very long time—potentially the whole of their life—without the need for any refuelling, but we are not there yet. Post the war in Ukraine, it is important that we have a UK capability of making nuclear fuel. I am pleased that this Government have been very supportive of the work we are doing at Springfields, near Preston, in developing the other potential fuels from uranium.
Q192 Claire Young: On the one hand, you have much more efficient use of fuel and therefore a smaller amount of waste, but on the other hand, if NESA is right about the large contribution that nuclear is expected to make to UK energy generation, there is going to be much more of it. When you balance those two things, how does the volume compare with what you currently hold? What is your estimate of how much more nuclear material will be generated?
David Peattie: I do not actually have an estimate of how much more. It obviously depends on how many gigawatts of new nuclear power we develop. I am happy to write back with an estimate, Chair, if that would help. It would need, I think, a bit of further analysis.
However, to give the Committee some confidence, we have managed here in the UK for 70 years more types of fuel than any other country in the world. More types of reactors have been tested, tried and experimented with at Harwell, at Winfrith, at Dounreay and at Sellafield, and we do have the capacity. If we do not have the capacity to handle it now, we have ways to make it available in the interim. As we have always said, ultimately the geological disposal facility is the end point for all these spent fuels.
Corhyn Parr: I can give you an estimate. The current geological disposal facility covers all our legacy waste, plus up to 16 GW. If we were to increase that to 24 GW, we estimate that about an extra 5% of spent fuel and 5% of ILW waste could go to a GDF. That is in comparison with the entirety of our legacy waste disposal. Even increasing by quite a large gigawatt power for many decades to come, the waste itself is not a huge increase from what we are currently managing.
David Peattie: It is really a comment on the history. The legacy is so big that the future will not really add much. That tells you something, I suppose.
Chair: And the confidence that new technologies are so much more efficient, so there is much less waste.
David Peattie: That is right. Fuel, design and the ability of the reactors to run at a high temperature all mitigate for less waste, and designing the reactors in the first place with decommissioning in mind, which did not occur with the previous generations.
Euan Hutton: Adding a little bit to that, it also plays into policy around reprocessing. There is no policy to reprocess that spent fuel. An awful lot of the volume that we are talking about going to go in the GDF is because we in the UK had a policy of reprocessing, which essentially splits the fuel up into constituent parts to reuse the uranium and potentially the plutonium.
David Peattie: We stopped that. We do not do any reprocessing any more.
Euan Hutton: We do not do that any more. It is not a policy to do that any more.
Q193 Claire Young: Have you been working with the companies that are currently bidding for SMR contracts on what materials they will use and produce?
David Peattie: No, simply put. I think I mentioned in an earlier answer that we have had some light-touch contact, particularly with some of the smaller SMR companies interested in some of our material for their fuel, but we are not in touch with the current list of SMR bidders.
Corhyn Parr: From a waste point of view, when the SMR designs get to a generic design assessment point, we will provide information and analysis of the waste that would be formed from those reactors, but that is when they are far further down the line—so the top leaders, if you like. We are aware that some of the fuels will offer new types of waste forms and we are working with the international waste community—certainly with Canada, which has a quite forward-leading SMR programme—to share the implications of what some of those waste forms could be in the future.
Q194 Claire Young: Given that there are at least two notably different SMR technologies coming forward, is it that you are not expecting to feed in your views because there is a decision-making process going on as to which technologies are adopted?
Corhyn Parr: Our support comes when they are through to the next phase and is part of the generic design assessment. It is part of the licensing that we would provide advice on waste management.
David Peattie: We will provide advice to GBN and the regulator at that point.
Q195 Ms Minns: We started by alluding to some of the perceptions that still persist around nuclear waste and so on. Are we getting better at minimising it? I think you have touched on this already, but could I invite you to explain a little more to the Committee about that journey and how we have come to minimise the amounts of waste?
Euan Hutton: It is almost not an apples-for-apples comparison between the nuclear waste that we refer to as the legacy waste and the nuclear waste that will be generated through new nuclear. That is fundamentally because, as David mentioned earlier, the missions that the organisations delivered through the decades from 1947 were very specific. The original phase at Sellafield, for example, was all around the development of the weapons programme. A very small amount of the material was required for that so the other by-products of fission, or indeed the cladding around the fuel, was left for later. Part of my organisation—a big chunk of my organisation, I would say—is that “later”. We are dealing with it very effectively. We need to do it more efficiently, very safely, today.
Going forward, it is not just about the technology, in terms of the efficiency and the power output of the reactor and the quality of the fuel. The purpose of the new generation is to generate electricity. That is fundamental. All the other things are minimised. The work that we do today around building with decommissioning in mind means that when we get to the end, we do not then have to work out what to do.
I would welcome any of you visiting Sellafield. I know that some of you have already been, but you will see some of our challenges. We are starting from a point where we have to work out what the next step is. In the new generation, that challenge is built in right at the design stage so you can manage the fuel, you can minimise the amount of fuel, and then you can manage the decommissioning much more efficaciously.
Corhyn Parr: In the UK, we have one of the largest volumes of higher-activity waste, which includes intermediate and high-level waste: about 750,000 cubic metres. It is all destined for a GDF.
The recent policy change does allow some of the lower hazard of that waste volume to go into a near-surface disposal facility. That is very important, because it means that we can save the higher-activity stuff to go into the most high-cost facility and save the volume of that for future generations and many, many decades to come.
At the lower end of the waste volumes, we have about 4 million cubic metres of lower-activity waste. We were disposing of that at the low-level waste repository for 70 years. About 15 years ago, we looked at what we could do with that waste to make it better to treat, to disperse, and to better dispose of it in more suitable facilities. We now divert 98% to low-level waste from the repository, which is a real asset for the UK and which enables not just decommissioning, but medical operations and defence programmes. We now divert 98%, which means that we have extended the life of that facility by over 100 years, saving about £900 million so far in taxpayer money.
There has been great innovation at the lower end. Now what we are trying to do, with this new policy that allows us to take a risk-based approach, is take that innovation up the categorisation of waste so that we are protecting all the disposal facilities that we have in the UK for many decades to come.
Q196 Ms Minns: That is very helpful. I know that you are talking about the low-level waste, but are there lessons to be learned from the efficiencies that you have managed to drive at the low-level waste repository that are now being disseminated across the NDA Group?
Corhyn Parr: There absolutely are. We work collectively when we look at waste management, as well as with the defence and medical sectors. It is about how we categorise our waste, how we sentence it, how we package it and what the available treatment options are. We use the waste hierarchy to make sure that we are only disposing of the waste that we absolutely have to, looking at recycling, decontamination and all the sites working together to do this in a really cost-effective way.
Euan Hutton: It is one of the big benefits of the one-NDA model and taking the previous model out, because we all work collectively. We are working on an integrated waste management programme so that with any waste that we have to create at Sellafield, we are hand in glove with Nuclear Waste Services.
Q197 Ms Minns: You touched very briefly on the GDF, so I will ask a couple of questions about that. What is your current confidence level that you will find a willing community to be able to take to the Secretary of State for deep borehole at the end of next year, this time next year? Are we still on track for that? Give us an idea of your confidence level at the moment.
Corhyn Parr: Let me give you an update on where we are. The policy was established in 2018-19. Over the last five years we have had a volunteer-led community approach to find a willing community, and over the same five-year period we have been assessing the sites for suitability from a geological point of view. We need a willing community and a suitable site. We have had five communities engaged in the process. We currently have three: two in Cumbria—Mid Copeland and South Copeland—and one on the east coast, in East Lindsey. All three of those communities are confidently within the process.
There are different challenges within each community from a geological or community support point of view, but we are confident that we will be able to make a recommendation to the Secretary of State next year to take one or more of those communities through to boreholes. We are already preparing the procurements and the supply chain to support us in preparing for the permissioning required, because we do require a DCO for each of the sets of boreholes that we want to dig.
Q198 Ms Minns: I think Mr Hutton mentioned legacy defence sector waste, which you manage at the moment. Is it the intention that future defence sector waste will also be destined for the GDF?
Corhyn Parr: Yes, and that is the great thing about the UK: we have one waste organisation that deals with all radioactive waste in the UK and that in itself is world-leading.
Q199 Ms Minns: Does that include submarine manufacture in the UK that is not destined for use in the UK? I am talking about the AUKUS programme in particular.
Corhyn Parr: Do you mean the waste streams from the AUKUS programme? I am not confident that that decision has been made; it is certainly not one that I am aware of yet.
David Peattie: I do not think that that has been fully thought through yet.
Q200 Ms Minns: When the NAO was here, a cost for the GDF programme was presented to us of £20.3 billion, which I think reflects a cost that was given in 2022. However, I know that NWS estimated the cost this year at between £20 billion and £53 billion.
Corhyn Parr: Let me try to explain.
Ms Minns: Has NAO got that wrong, or has it just been given the wrong figure?
Corhyn Parr: No, the numbers are consistent. The £20 billion to £50 billion is the total life cost, full operation for 150 years and final closure. The £20 billion to £50 billion is to take account of the uncertainty within that programme.
The point figure of £20 billion is still consistent with the build phase of the programme. We currently estimate about £12 billion to first waste emplacement date, but because of how we estimate the risks and uncertainties with these long-scale programmes, that is why you get the large range there. That was set out in our business case in, I believe, 2019-20, which covers the entire programme cost.
Q201 Ms Minns: Okay. I think the reason why it raised our eyebrows slightly was that it seemed, even for a build cost, quite low and I believe it is a 2022 cost. We are all very familiar with what has happened with inflation over the last two years. Are you absolutely certain that that NAO report build cost is accurate?
Corhyn Parr: If it is a 2022 cost, I would have to clarify what inflation has been built into it. If some of the numbers within the business case are based on 2017 figures, uninflated, yes. However, when we look in the round with the bounding numbers, that does take account of inflation over the periods, yes.
Q202 Ms Minns: I think it might be helpful to come back on that, because we did raise the question with the NAO when they were in front of us, because we had a little question mark. It seemed a little bit on the low side. If it is a 2022 cost that is still being reflected in an NAO report, I think it is something that might need to be updated.
Corhyn Parr: There might be a point of clarification around the NDA proportion of the cost as well, so we will check and give you an absolute fact and figure, yes.
David Peattie: We will come back to you on that.
Chair: That is very helpful. Thank you.
Q203 Ms Billington: For those of us who are not as familiar as you are with the nuclear decommissioning process, could you explain how the decommissioning of nuclear sites is paid for?
David Peattie: How is it paid for?
Ms Billington: Yes.
David Peattie: Well, through the Department. We get annual grant funding and we use our income from the contracts with EDF and Network Rail to supplement the grant. That allows us to spend about £4 billion a year across our 17 sites. The grant funding is deployed, through me as accounting officer for the whole group, to the chief executives, and each of the four pillars has an operating company board of directors. They oversee the dispersal, and then we have processes and procedures for tracking the spend throughout the year, with quarterly reviews and normal financial controls. It is audited by a financial audit, not a VFM audit, every year by the NAO and we bring in auditors to do special bits of work as needed.
I hope that that answers the question. It is largely taxpayers’ money, our money, together with the good revenues that we earn from our commercial activities, and then it is deployed through this structure that we have, and managed very carefully.
Q204 Ms Billington: Thank you. Will smaller, more modular nuclear generation make it more difficult and therefore potentially more costly to decommission?
David Peattie: It shouldn’t. As we said earlier, the plans for decommissioning the SMRs is part of the generic design assessment and will already be built into the design. To the extent that there is standardisation of the SMRs, once we know how to decommission one, we should be able to apply that quickly to the others. There will be a variety of SMR designs—we get that—but what there will not be is the ignorance that we had with the historic gigawatt-scale reactors that did not have decommissioning in mind when they were designed and built. It should be easier going forward and therefore cheaper and quicker.
Q205 Chair: To go back to something you said earlier, you will be involved in the next stage of the bidding process so that your advice is included in the design for decommissioning.
David Peattie: Yes. Part of the ONR’s and Great British Nuclear’s next longest step is to seek advice on the cost of decommissioning, and one of the duties of the NDA is to provide our Department with advice on decommissioning reactors.
Q206 Ms Billington: You said that it might be cheaper or quicker. How much of that is down to optimism bias?
Euan Hutton: Can I give a wee example, hopefully just to give you an idea? Take some of the old facilities at Sellafield, the big chemical plants. Getting the last bit out of the bottom of a tank was never thought about, so we have to work out how to get it out and it will cost us a lot of money and whatever else. When the new facilities are built at Sellafield, we make sure we can get every bit out of the bottom as part of the design so that we can clean it out much more effectively, decontaminate it and have less waste that will have to go into some of the waste streams that Corhyn has talked about. Crucially, however, it will also be an easier activity to undertake so we can do it less remotely and therefore get on with it much more quickly. I try not to be too specific, but sometimes when we say we think about it and it will be better in future, it is easier to explain the sort of thing that we put in now to make it better in future.
Q207 Ms Billington: Thank you. Are there any significant differences in the cost of decommissioning between the various SMR technologies?
David Peattie: I think it is too early to say until we have seen them develop and we understand precisely how big they are. SMRs cover quite a range of power output, from 50 MW right up to 0.5 GW. That is a big range. SMRs are not that “S”, actually.
Q208 Ms Billington: Are the Government taking evidence from you on the technologies to back?
David Peattie: On the technology—?
Ms Billington: On which technologies to back when it comes to developing SMRs?
David Peattie: Not specifically, no.
Q209 Ms Billington: Do you think they should?
David Peattie: I think our advice should be in our area of expertise, which is around decommissioning. I commend the Department for setting up the Science and Technology Advisory Council, which was announced in the last week or two and which Paul Monks is establishing. I think it is a most excellent thing for the Department to do, to draw in science, engineering and technical experts to give the Department advice. That might be the place to seek that advice.
Q210 Luke Murphy: The NDA is the biggest line item on the DESNZ budget, and Sellafield is the biggest line item on the NDA budget. Could you say a bit about why the Sellafield site is so expensive and so difficult to manage?
David Peattie: Yes, I can. I referred to £105 billion—an eye-watering figure, I know—which is the total provision in our accounts for the next 120 years. Of that £105 billion, 75% roughly relates to Sellafield, and of that Sellafield amount a further 75% relates to the legacy and the history. Whenever I visit, I always remind myself that we are probably now paying for the cost of keeping the country safe during the cold war, frankly. In the context at the time, the way the reactors were run and the way the waste and the spent fuel was handled were frankly left for another day. As Euan said earlier, now is that other day.
If you do the maths, about half of the total spend is about the legacy. The other reason for the difficulty, as well as for the way the plans were created, is that Sellafield is a very congested site. You are very welcome to visit any time that we can arrange a visit for you; you will see how we have multiple operations on the site. It is a very small site compared with, say, Hanford in the north-west United States, which is massive in comparison.
Sellafield is congested, and that does not help. Also, as I said earlier, it is very hard for us to get a surprise on the upside at Sellafield. We are always finding problems that we had not foreseen. The team does a fantastic job there, but you know it is dealing with a legacy, it is helping to keep the lights on and it is in a very congested space. Obviously we are thinking about how we can use land adjacent to it for other activities.
Euan Hutton: Adding to that, this goes back to some of the questions on the new fleet of reactors. How to do this bit was not thought of when this bit was created. Take something as simple as how to demolish a chimney, an old stack. We will have to take it down chunk by chunk because of its location, whereas where an old chemical facility at the end of its life is being decommissioned, you will quite often see explosive demolition used to reduce facilities. We have used explosive demolition. We did it in 2007 to take down the cooling towers on Calder, but it is not something we can go to too frequently. If you do come to this site, you will see that we are taking down the iconic chimney that was on one of the original piles. The filter gallery on the top that people refer to as Cockcroft’s folly—we took that down in 7-tonne chunks, and it took us about 18 months to take 300 tonnes off the top of that.
When you see those things, you can understand the challenges of location, how it is all built and the way it was created in the space available. There are challenges to do with the material itself: there is radiotoxicity and chemical toxicity, and it was built at a time when asbestos was freely used as a material in construction and insulation and so on. There are myriad things that we have to manage in order to deliver the solution.
When it comes to the solution itself, it goes back to the major projects that we talked about earlier and that simple metric on success. Unlike the SMRs, which we all hope will be “Build one, repeat it and get a few,” most of the things, other than stores, that we do on the Sellafield site are first-of-a-kind and one-of-a-kind. Inevitably, there is a big sense of experimentation in delivering those, and with that comes uncertainty.
Q211 Luke Murphy: I hear what you are saying about the lack of thought that may have gone into it 50 years ago, but the NAO highlighted that Sellafield has missed the majority of its important hazard reduction targets since 2020-21. Some of the key milestones for emptying the legacy ponds, which I think you have mentioned, have slipped by up to 13 years since 2018. Those are recent metrics and targets and dates that were set. I just want to push you on that and on why you think those delays are happening. They are leading not just to financial consequences, which I think have already been discussed, but to significant safety concerns, many of which are described as intolerable risks by the Department.
The other question is whether it is sensible that the NDA puts Sellafield at the centre of its nuclear management plans, given these complexities and delays.
David Peattie: Again, that is a great set of questions. The targets we set for removal of material from the legacy ponds and silos are set by the teams, largely self-assessed and challenged by management and some of my team. Then along comes a failed crane, for instance, at the Magnox swarf storage silo, which can set us back by several months, because these are gantry cranes sitting at the top of a very hazardous building and then everything has to stop as we repair a crane. Again, the idea that this crane was going to fail was not forecast. Then we have had different issues with robotics in other parts.
It is a long way of saying that unforeseen problems have led to us not achieving, as the NAO rightly says, the rate of clean-up that we had originally hoped for. That said, this stuff is really hazardous, so there is an asymmetry of risk and reward. In other words, getting this wrong because we are chasing a target is the wrong thing to do. Potentially catastrophic events could occur if we get things wrong. We are naturally and, I hope, understandably very cautious on the most difficult parts of the site.
Q212 Ms Billington: I would just like to follow up on this. I find it quite odd that we are talking about being super-cautious about the risks and yet there are unforeseen things—you are calling them unforeseen. Even with a comparatively low-risk project, one would have a contingency in the budget. Your contingency might have to be larger because you have higher risks, but would you say that perhaps the lack of a sufficiently large contingency is part of your optimism bias?
David Peattie: I think that is a fair comment, yes.
Q213 Ms Billington: So what are you going to do about it?
David Peattie: We have to get the balance right. We cannot just keep adding contingency, contingency, contingency. We have original estimates that become—
Q214 Ms Billington: Forgive me, but at the moment, as I understand it, your estimates are over-optimistic and the actual costs exceed those estimates. That sounds to me like not a very good plan.
David Peattie: Except the more recent capital projects at Sellafield—some of them are mentioned by the NAO, not in the value-for-money report on Sellafield but in the Department report. You will see that two of the projects at Sellafield are actually marked green and are doing okay. We are not bad across the board, but I do not disagree with your broader point, where I think we are still seeing optimism bias.
What are we doing about it? Well, we are doing more reference class forecasting, more sharing across the group, not allowing teams just to develop their own estimate unchallenged, and encouraging them to build in further contingency. I would be the first to say that there is more for us to do on that.
Q215 Ms Billington: For clarity and for the record, I am a pro-nuclear person. I am a member of the GMB, which is also an important declaration of interest. I am just struck by the fact that costs and contingencies should be factored in, especially when you are dealing with these high levels of risk. People who are somewhat more sceptical about this industry than I am might say, “Why do the Government continue to throw money at something where you are continually getting your estimates of costs significantly wrong?”
David Peattie: I absolutely take that; I think that is a fair comment. Thank you.
Q216 Wera Hobhouse: To add to that, are you ultimately worried that the Government or anybody will become lukewarm about further nuclear if you disclose the range of costs up to the possibly highest cost, rather than doing that optimism bias?
David Peattie: I am not personally worried about it, for two reasons. I think the world does need nuclear now as part of the solution to climate change and energy security. To repeat the point I made earlier, the bulk of our costs and the bulk of our issues are to do with the legacy of the last 70 years. Looking forward, our capital pressures are already improving. As we said, the new-design reactors will have decommissioning built in and should have a much tighter envelope of costs. We are trying to address the optimism bias point; there is more to do on that.
Euan Hutton: Can I just give a little sense of balance? You are right; the legacy ponds and silos area is one of the most challenging areas to work in. We are not where we need to be. When you meet the team there, you will find a team who are so motivated by the challenge that they are given. But if you go across the site to two of the other big programmes of work that we are delivering, one is on the receipt of all the AGR. For the last two years now, we have been receiving everything from the AGR fleet, dismantling and then storing it, getting it ready to store in the storage facility until the GDF is available.
On the special nuclear material side of things, through the regulator, they identify the most important things to them in a regulatory issue of which there are four levels, level 1 being the highest priority. In the last couple of years, we have cleared two level 1 regulatory issues to do with that material and we have done that in a repurposed, value-for-money facility that we have delivered with the teams doing it.
Sometimes it is about taking the opportunity to remember that it is not just about the things that do not go very well. As we said earlier, we do not come here very often to tell you about the things that we are doing well.
Q217 Luke Murphy: Fair point. May I ask tangentially about the on-site laboratory? Obviously analytics is crucial, and that was identified as one of the risks by the NAO: the reliance on the 70-year-old site. There have been problems with the new site that was going to be developed. Could you tell us a little about what the status is with that?
David Peattie: Yes. Euan can take you through it in some detail, but we have decided to pause a current project on that, because we found a better way, under Euan’s leadership, to deal with the analytics at Sellafield.
Euan Hutton: Yes. About this time last year, we did an inter-programme review. I will talk about programmes and projects; programmes are longer than projects. We did an inter-programme review, because the project was not going to deliver what I needed when I needed it to. Very quickly, we decided to pause that project, because what the programme review was suggesting was that there might be a different way of delivering the output that we needed. We were challenging the requirements, the timescales and so on. A fundamental piece of the puzzle—I think you alluded to it—is that the current facility is one of the first facilities that was built on the site and we were trying to replace it.
Interestingly enough, the work that we need to do to keep the old facility going for long enough for a replacement requires a significant investment in that facility, which actually afforded me different options of what to do next. In terms of my confidence in that, every engineering assessment that we do has not identified anything that causes me real worry. We have done a lot to replace the electrics, the roof and ventilation. Fundamentally, and I was really pleased by this, the attitude of the staff in the old facility has just gone through the roof, because they can see us investing in the facility with all the care and attention that we need. Effectively, because we are not getting a new one, we are looking after the old one.
We are currently preparing to come through to the DESNZ pick. I think it is going to be just after Easter. We have made the decision that we will, which we need to govern—so we have made the decision internally. There are governance steps to go through to confirm that decision, but we believe that that decision will deliver the alternative that I need to deliver the programmes of work that we have. It is more than likely that that will be available four years earlier than the project was and within the range of the original outline business case, which plays into a saving of somewhere between probably half a billion and a billion.
Q218 Luke Murphy: Is this proposal assessed by the NAO, or is this subsequent to its report?
Euan Hutton: The NAO did its fieldwork in the summer. It is through the autumn that we have completed our work, and we now have where we are going to get to.
Q219 Luke Murphy: This is my final question. Given all the discussion about value for money and performance metrics, how does the NDA—and Sellafield specifically—measure productivity, and what are the hard metrics for whether it is improving or declining?
David Peattie: We use a number of metrics, as you can imagine. The first is around hazard reduction. We have milestones for removing waste; as we heard, we are not achieving all those as best as we can. We carry financial metrics as well, so we are tracking the costs around our sites and benchmarking across the estate. Then we have human measures, around diversity and inclusion metrics. We have regular surveys of our staff, which I think is an increasingly important part of our cultural improvement. We track those monthly in a monthly report and then at quarterly reviews that the NDA holds with the four operating companies. Then we meet quarterly with the Department and UKGI and annually with our sponsor Department.
Q220 Luke Murphy: I have one very brief question. Following the NDA report, there was lots of reporting around tensions with the Treasury and discussions around the wider fiscal environment. If you ever thought that your fiscal settlement was compromising the safety, which is fundamental to your operation, would you feel able to raise the alarm in public around that?
David Peattie: Ultimately, yes. We certainly would raise it with our regulator and with our sponsor Department. That would be our prime vehicle for communicating our concerns. We are always careful about making public statements; we are an arm’s length body of the Government, and it is for the Government to make public statements.
Q221 Chair: You have told us a lot about your constraint on the site, the challenges you face, equipment going wrong and rewiring the site, and then you compared the much bigger facilities in the United States. Should you be considering an alternative to Sellafield?
David Peattie: We have Sellafield, so we must deal with what we have there. I would say that there are lots of successes. Interestingly, colleagues from the United States, Canada and Japan are always incredibly impressed by what we do at Sellafield, and that reputation is unrivalled internationally.
Q222 Chair: You mentioned the benefits of the SMR programme and the fact that you will get repeat business, which will help with your economies of scale. Do you think that there is also an argument for new gigawatt capacity for building sites and, indeed, more beyond that? Will this help you with your decommissioning efficiency?
David Peattie: Yes, I think that is right. To the extent that reactors are standardised, whether they are gigawatt or small, that does help our job of decommissioning.
Chair: Which will help with your value for money, which is the point that the NAO is making, too.
David Peattie: Correct.
Chair: That is helpful. Thank you.
Q223 Wera Hobhouse: Thank you for coming. I do not have any interests to declare, and I am possibly in a minority, if not the only one, who is a little more sceptical about nuclear power. I also recognise that our overarching aim has to be to get to net zero. I am a liberal; I am always persuadable by good arguments.
The cost thing, of course, is that the Government can spend money on anything, but not on everything. It is ultimately about choices. I want to follow up on one thing that was said earlier about new technologies and the range that is out there, and about how it is currently too early to put money on any particular technology. Is there any point at which you think there could be a benefit in the Government backing a particular technology? Otherwise, you will ride a lot of horses, and that could also be costly for the taxpayer.
David Peattie: Thank you for the question. I have three quick points, which are a focus of the Government. The process that GBN is doing on SMRs is the right one, I think, and it has multiple suppliers with different technologies. Taking one, two or three of those forward is the right thing. Then come the advanced modular reactors, which could potentially deliver much higher-temperature, more efficient reactors, albeit that they are a decade or so away. Then, of course—perhaps not that far away; maybe closer than many of us have felt over the last few decades—there is nuclear fusion.
If you get the opportunity to visit Culham, there is some extraordinary work being done there on the development of fusion. I think we as a species, frankly, should be able to take heart that nuclear fusion is more and more possible, even doable within the next—let’s see. I do not want to offer optimism bias at this point.
Q224 Wera Hobhouse: Thank you. You have already answered one of my questions, which is whether you think new technology will get things done faster and more cheaply. That has already come out in your answers to the previous set of questions.
Can you characterise the efficiency and effectiveness of the Sellafield site operation, so we understand a little bit more about what you think is particularly effective about it and what is efficient?
Euan Hutton: Thank you very much for that question. I would couch this in two fundamental terms. We have touched on the creation of new capital assets and our ability to predict more accurately—reference case forecasting is an example—so that we can be more assured of how much it will cost and when I will have them available to me. That is one side of it.
The other side is the delivery of the operations. Every day, as David mentioned, we safely undertake a number of operations that utilise our resources. We are very keen to make sure that we can do that more efficiently and effectively. Covid, I have to say, provided us with a real challenge because, as you will remember, we very quickly had to make the site quiescently safe as people were left at home. We had to switch off chemical facilities—sorry, when I say quiescently safe, I mean putting it into a place where we could look after it very easily, so we were not moving nuclear material around, running chemical processes and so on.
Coming out the other side of that has been a real challenge, because it is quite an old facility. Switching it off and leaving it for a while before switching it back on has been a challenge. Being able to undertake the routine maintenance we had to do meant taking nuclear risk-balanced decisions on what maintenance we could do during that period, getting back on and delivering all that. That plays into the point that Luke was making around our ability to deliver what we have to deliver as quickly as we can.
When we talk about a crane failing, you might think that we should be able to predict that and maintain a crane beforehand. Our focus is on the availability of the asset and the availability of the equipment, so we can operate it more and get on with the task in hand. That is our focus.
Q225 Wera Hobhouse: We have already talked about how much of this has been picked up by the taxpayer; I understand most of it, but will there eventually be a point at which it is complete and no more monetary support is required?
David Peattie: The current estimate runs out 120 years for the work we know about now. New nuclear build will add beyond that. Our expectation is that the people who fund and benefit from SMRs, for instance—I am thinking about companies now—would be paying for their decommissioning costs up front through a fund or directly.
I think there is a point at which the taxpayers should not have to fund the decommissioning, but we still have the legacy clean-up from the last 70 years, which is going to last for another century.
Wera Hobhouse: So not in my lifetime.
Q226 Chair: Do you think that the way that technology develops means we could have a degree of optimism bias, just to choose a phrase, and that we might see the legacy clean-up speeded up?
David Peattie: Yes, we would hope so—absolutely. We are actually using robotics. You might have seen this thing called Spot the Dog. It is typically a yellow quadruped in the shape of a dog. It has now moved beyond just turning up at conferences and people saying, “Oh, isn’t that cute?” It is now being used for real in hazardous buildings to do real clean-up work, and we are keeping people away from harm. There is real leverage to be had there.
We can do laser cutting now. There is something called a laser snake, which is a very long-armed laser cutting device. It is an extraordinary piece of technology. Again, it keeps humans out of contaminated areas and is incredibly efficient. It can do work in minutes that could take a human hours, if not days.
Q227 Wera Hobhouse: When it comes to persuading people—let’s say people like me—that this is a safe technology and that we should not worry too much about human health and the risk assessment that we have already talked about, don’t you have anything that could make that a little bit more transparent? Can you say, “What took us this amount of time in the past, with a robot or with our laser cutting technology will now take three or four years out of that operation?”
Euan Hutton: Absolutely. The challenge that you have, to build on the question you asked, is that in a plan that goes out for 100 years—we used to call them innovation insertion points, and that sounds a little bit glib, but it is not. It means that something will happen; a new technology will develop. Either we make an assumption that it will happen and that therefore things will reduce in cost and time, or—and this is how we do it—we set a baseline on the assumption of the technology that we have and the techniques that will play out for those 100 years.
It is very difficult to get, in that way of thinking, to how you put those things in, but I am absolutely certain. I always say to my children that iPhones were invented in 2007; they think they have existed since the dawn of man. It is very difficult, over a 100-year plan, to put things in which are assured, if you like, with the ability to scrutinise them. You might be saying, “In 20 years’ time, we anticipate this,” and I do not know what that is. I will say that those things will happen, which will make it cheaper and bring the end in.
Chair: I think I almost heard you say something will come up. It is very seasonal, for those of you who did not catch the reference. Josh MacAlister wanted to come in.
Q228 Josh MacAlister: It was just on this point about innovation insertion points. I guess there is also a case for saying that you could do some innovation development points as well, back to the point of shaping?
David Peattie: We are doing that.
Josh MacAlister: If Sellafield were to make itself a global hub for testing robotics in hazardous environments, for example, it could spur some of that on.
David Peattie: Yes, I agree with that.
Chair: Rather than looking for an alternative to Sellafield, as I might have suggested just now.
Josh MacAlister: Indeed, Chair, yes.
Chair: The constituency MP is springing to your defence.
Q229 Torcuil Crichton: Corhyn, David and Euan, thanks for coming in, for your evidence and for your expertise and for keeping us safe, I guess. I have technical questions about R&D and where we get value for money out of that, but I want to go back to a version of the question that the Chair asked you at the beginning about what keeps you awake at night. Does what is happening in Ukraine and to Ukraine’s nuclear industry, with the pressure on Ukraine to lean more into its nuclear power, worry you at all?
David Peattie: Yes, it does worry me: the energy security for the world, the impact, and of course the impact on Ukraine—and Russia, actually. I lived and worked in Russia for five years and got to know very many good Russians. It might seem an odd thing to say, but I do fear for both nations and worry about that.
In my professional life, we worry about where we are going to help the sector with its sources of fuel; we touched earlier on the need for the UK to have its capability to develop its own fuel and not rely on Russia. That is a constant care for us. I am pleased that the Department is making steps in that area, so we will have national capability for fuels.
Q230 Torcuil Crichton: Our plants do not have missiles flying over them every night like Ukraine’s do, but we are in almost a cyber war with hostile actors. You mentioned that security and cyber are among the pillars of the NDA. Have you seen an uptick in cyber-attacks in the last couple of years?
David Peattie: Yes, certainly over the last 12 months. I am personally attacked most days with directed phishing attacks. We have a very strong protective mechanism, but we have to be incredibly vigilant. We have built a new cyber protection central hub up at Herdus House in Josh’s constituency, which services the whole of the group. We are well plugged into the National Cyber Security Centre as well, because we are part of the national infrastructure for the UK.
It is a constant care of mine. It will just take a moment of inattention by one of our team to allow a cyber-attack to be successful. Obviously we exercise recovery plans for a cyber-attack, but you are right: it remains an area of the world’s warfare, frankly, which is growing and will continue to grow.
Q231 Torcuil Crichton: Let’s move on to the technical stuff now. I am interested to hear how Tesco uses the NDA to deliver stuff to supermarkets, and how you make money like that. You spend something like £100 million on R&D each year and you are at the edge of innovation; with everything you do, it is the first time it has been done. Are things like Spot the Dog used? What technologies have come in that you have invented?
David Peattie: I have mentioned two earlier: the robotic dogs and the laser snake, which we have supported. We support 150 PhD students around the UK. We have a very strong graduate programme. We like them to work on new stuff, because they have fresh, open minds. We work with many of the universities around the UK. We have had an approach where we offer big challenges like keeping humans out of harm’s way, with awards to universities to follow up on that.
I think £100 million a year is a good investment. It is about the right scale. Arguably it should be a bit more, but we are confident that we are getting some good, strong results from that.
Q232 Torcuil Crichton: What do you get out of that? Do you get patents that you can then sell on?
David Peattie: We tend not to get patents, but we do get practical applications on our site. We have touched on a couple. We do get great people who come and join us, who want to work with us. This year we are recruiting 100 graduates and we have had 11,800 applications, so it is strong. People want to come and join the NDA, whether that is for R&D or for the technical work that we do.
Q233 Torcuil Crichton: Do you have to buy in technology and patents from other sites around the world?
David Peattie: Yes, from time to time we do, where we have a specific need. Valves come to mind: we have used valves of a particular design at Sellafield for hostile service condition, and there are very few manufacturers of those in the world. Sometimes we have to bring in what is intellectual property owned by other companies, yes.
Q234 Torcuil Crichton: You alluded to Sellafield possibly becoming an innovation centre for robotics in nuclear waste handling. Are you working on that?
David Peattie: I think that is the natural place for it to be, yes.
Euan Hutton: The great thing about Sellafield is that we have all these challenges, and in order to deliver them we will be creating new opportunities, not necessarily for the NDA to exploit, but for the UK to exploit. For example, with the robot dog, the base robot is a Boston Dynamics robot. We use it to deploy either radiological instrumentation or cutting tools or picking things up—all that great stuff, keeping the individual away from harm. I totally support expanding that, so if you have some robots you can come and utilise them on our site. We get two things from that: we get the development of the technology, and hopefully the UK can exploit that, but I also get work done, and getting work done is my primary concern.
Q235 Torcuil Crichton: This is a bonus question from DESNZ. DESNZ has just issued a strategic review of the National Nuclear Lab, which we have not had time to digest. I do not know if you have had time to do that, but did you feed into the review?
David Peattie: Yes.
Q236 Torcuil Crichton: How do you get on with the National Nuclear Lab? What is your relationship like?
David Peattie: We are a key customer for the lab. We provide much of the analytical requirements that the lab conducts. The NNL site, as we mentioned earlier, is an enclave within Sellafield; it is a site within a site. We interact regularly at all levels with NNL. I meet Paul Howarth, who is the current chief exec, regularly.
Q237 Torcuil Crichton: I notice that the report calls for greater transparency with key stakeholders and for key stakeholders to reciprocate this transparency. That seems like a civil service criticism.
David Peattie: I think we can all probably do a better job of more open sharing. It is good to see that in the report, yes.
Q238 Anneliese Midgley: I refer to my entry in the Register of Members’ Financial Interests; I am a member of Unite and the GMB.
I want to talk a bit about the workforce and the growth of the nuclear sector. You are facing a shortage of the right people with the right skills. In your introduction, you said that you believed that there were the right skills at Sellafield. You have just said in answer to one of Torcuil’s questions that you have 100 graduate places and over 11,000 applications, but the Nuclear Skills Delivery Group is also estimating that sector-wide you need to recruit 40,000 additional workers into the sector, which is double the current recruitment rate, as I understand it.
Are you concerned about the demand from other parts of the sector leaving you without the right people and the right skills?
David Peattie: You are right: the skills agenda is a major concern of mine. I was on the taskforce with Sir Simon Bollom over the last year. We have the demographics of an ageing population and people retiring. You are absolutely right to highlight the skills agenda. Corhyn has been personally involved over the last couple of years on our behalf, working not just with apprentices and graduates, but—as you might have seen—with Destination Nuclear, where we bring in mid-career people from other sectors, potentially oil and gas or manufacturing.
I think we should be more creative about later-life employees and how they can stay on part-time in an advisory capacity. We need to be much more flexible in how we treat pensions, rather than making people’s only choice to retire. We are going to lose a huge amount of capability with people who are in their 50s and 60s at the moment.
We work very closely with the trade unions. I meet regularly with the national leaders and they are key partners in helping to develop the skills. You are right that it is a massive challenge for the sector. We do compete with the private sector and we always have to bear that in mind, but I think we have some unique selling points. We are doing work now today on our sites in many areas that is very exciting, whereas some of the private sector work is still some years ahead. You are right: it is a massive challenge. Corhyn, I do not know if you want to add anything.
Corhyn Parr: The only thing to add is that we find we are attracting people who are very interested in environmental clean-up and environmental protection, so it is a slightly different sell within our part of the sector. That said, when you look at the numbers of graduates and apprentices coming through, there are not enough to meet the demand set out by skills sector group of 40,000 by 2030.
One thing we are looking at, although we are very site-based, is more flexible working around those areas and support functions. In NWS, for example, we now recruit from every corner of the United Kingdom to support our programmes, whereas we did not do that before covid. I think being more flexible will make us a more attractive part of the sector, but that unique environmental protection piece and the challenges that you have heard about do help us to attract a different set of individuals, like the 11,800 graduates who applied.
Q239 Anneliese Midgley: Could you go a bit more into some of the specific and proactive steps that you are taking to address the risks of that skills shortage?
I want to understand a bit about how it works, in terms of the majority of the NDA Group being subject to public sector pay and spending. Are you buying in skills from third parties? How does it work?
David Peattie: We don’t do much in terms of third-party specialist advice, very broadly. Where we have targeted needs, we will bring in specialists; for instance, if we want some work done on forensic accounting, we will bring in one of the big four companies, but that is a transitory piece of work.
For me, it comes back to the three stages of a person’s career. I think we are doing a very good job at the front end, getting in the 22-year-olds, whether they are apprentices—obviously apprentices are often younger than that—or graduates. We have a good programme that is dedicated to them for two to three years, where they try some different roles and then decide what they wish to pursue their career in.
Destination Nuclear has been a very successful advertising campaign across the sector. It was developed by the young generation network in the Nuclear Institute, which is a great thing that the youngsters did.
We must hold on to people later in their careers. You are right; there are some specific areas around project management and commercial skills where I think we can attract good people and compete well with the private sector for the key roles. I do not want to overstate it; it is a massive problem, and it is one of the things I do worry about.
Q240 Anneliese Midgley: That is helpful. From looking at the NAO report, it seems that you have had a change in approach on return to the workforce and prioritising the workforce over the last couple of years, over the needs of Treasury budget commitments. How is that going?
David Peattie: Working with our trade unions across all our sites, we have particularly doubled down our efforts to reach out to make sure that we have the community of the workforce with us for the future. It is so important that the workers feel part of the future in that respect and that our approach is fair and they can see it. We have a lot of networks now built across the groups, often self-initiated by the workers and by our teams. We have a women’s network, an LGBT+ network, a mental health network, a menopause network and men’s health networks. It has certainly been my approach to encourage those, not some top-down management drive. Allowing those to flourish has been a part of it.
We have been very open about surveying. We are very willing to hear criticism and have people tell us their concerns and where we need to improve. We are getting better engagement scores on that. I have brought in a head of ethics and compliance now across the group and we are working closely on that, to be very open with our channels for things like whistleblowing or raising concerns.
Painting all that as a picture, people like to talk about culture change, but I think it is better to look at the detail of what we are doing to engage with our staff and listen hard, especially when we do not get it right.
Euan Hutton: On the point that you were making about the NAO report, when you look at the demographic of the organisation you can see that there is a significant portion who could retire and take their pension in the next 10 years. For resilience and to make sure that we have suitably qualified and experienced people to undertake all the amazing things that we do, we took the decision to recruit to the point where we could train up before people left. It seems very straightforward. I think last year we took on over 400 grads and apprentices just into Sellafield. I could give you the number for the whole group.
At the moment I have about 1,000 people in recognised training programmes. I had a great session on Monday morning, where I welcomed 120 degree apprentices. These are 18-year-olds who have not gone to university and are joining the NDA to get a degree qualification over five years. That was one of those very good days at the office, meeting all those young people.
Q241 Anneliese Midgley: I am very pleased to hear that you have a valued and collaborative relationship with the trade unions, in terms of working on the wellbeing of the workforce in general, but the GMB has highlighted concerns about the future of the NDA’s budget and its impact on Sellafield, the workers and the local community. You have gone into what steps you are taking to safeguard Sellafield’s operations, the community and wellbeing, but what would you do if the budget were cut?
David Peattie: We have a pretty good sense now of what the budget is for next year. As we said earlier, I think we are confident. It is going to be a very tough year for us next year. This new group structure allows us the benefits of the portfolio. Sellafield is the area that has the intolerable risks, as defined by the regulator. It is where the lion’s share of our funding rightly goes. We will be protecting that as we go into next year. Early in 2025, we will be starting to think about the years beyond the next financial year and the spending there. I think we are going to have to look again at how we organise it and our back office costs, making sure we improve efficiency and productivity wherever we can, and working very much in partnership with all our trade union colleagues.
Q242 Anneliese Midgley: I have a similar question about the health and safety of your workforce and of the community. We have already seen budget cuts leading to workforce reductions, raising concerns about shutdowns and operations not going as smoothly as they could. How would the potential reductions have an impact on the rigorous health and safety standards?
David Peattie: We are uncompromising on rigorous health and safety standards, absolutely. That is our priority at all our sites and indeed in all our offices. We start all our meetings with safety moments, and whenever I visit sites—and colleagues are the same—this is our priority. Our overall safety record has deteriorated since covid and we are absolutely on that. Compared with other industrial sectors, we do perform well by most measures, but it is no reason to be complacent. We will keep it as a priority.
Looking forward, we want to avoid any job losses or any impact on employment. We will need to see how next year plays out and then see the future spending, but we recognise the pressure on the public purse that all Departments face.
Q243 Chair: You mentioned the oil and gas industry, in which there are 200,000 workers, as a potential source of skilled workers for the NDA. Have you made any progress in recruiting?
David Peattie: Yes, we have, but only on a small scale. There is probably a broader approach that could be taken with the oil and gas sector, potentially with the establishment of Great British Energy, based in Aberdeen. For instance, as an engineer from a few decades ago, I know that some universities set up a postgraduate MSc degree around petroleum engineering and oilfield engineering: engineers who had studied in electrical or mechanical engineering would then do a year of training in oil and gas expertise. Imperial College and other universities did it. I think there is an opportunity for some universities to follow that model and have a one-year postgrad in a variety of nuclear types of engineering or science to help the transition of the workforce, which will be reducing, particularly in the UK North sea.
Q244 Chair: You have put your finger on it by talking about the transition. The workforce area is a very well-trained workforce and there will be reduced opportunities for them there. You are confident that there is opportunity in your part of nuclear.
I have a question along those lines. Your sites are not necessarily where people are working at the moment. How do you address that challenge?
David Peattie: That is correct. Our sites tend to be in remote coastal locations, but I think there is an opportunity to transfer some of the skills from the oil and gas sector. They are used to a high-hazard, regulated industry, and I think we can do more on that.
Q245 Chair: Yes. I would be interested to follow that over the coming months and years with you.
Let me turn to something else. In 2021, the BBC reported a culture of bullying and harassment at Sellafield. What has been done to address that?
David Peattie: Quite a lot. That has been a topic of personal interest to me over the last few years. I touched on some of those things earlier in the answer to Anneliese about listening to the workforce more, with regular surveys. A phrase we use is, “You say, we did”, so we have listened to the feedback and acted on it. The establishment of networks, often self-generated, has been very important. I have put in place a new ethics and compliance function across the whole of the NDA Group. We are working on a code of conduct that will play into our organisation.
Ultimately, it is about the leadership setting the tone across the group and then being seen to act, because there is nothing worse than concerns being raised and us not acting on them. Certainly on my watch, we have done everything we can to act on those. It is a very large organisation; we have had perhaps historic pockets or areas at some of our sites where behaviours need to improve, and we have taken action appropriately when those things have occurred. Again, there is more to do on this, but it is a constant drive to get the culture where the 21st century should expect it to be.
Q246 Chair: What evidence do you have that motivation and teamwork have improved since those allegations?
David Peattie: That is a question I asked.
Chair: It goes to the point about productivity, which we heard about earlier.
David Peattie: Absolutely. I think the evidence comes from our survey results, how people are feeling about working in our operations, the level of engagement that we have in those surveys and simply how many people fill the form in. That is now at record levels. Our “speak up” policy is standard—previously we had different approaches, different phone numbers, different procedures—across all of the NDA.
We hold each other to account. I hold people who work for me to account in this area. As I said, I will not go into any specific details, but we have let people go because they have not behaved appropriately. That will continue in our drive to improve the culture and evidence it, to measure it and see that things are getting better. Where they are not, we need to be seen to act as well.
Q247 Chair: Have you worked with the trade unions on addressing culture?
David Peattie: Yes, absolutely. I meet regularly with colleagues from Prospect, GMB and Unite. They are a key ally in this area. They too will raise concerns directly with us, which I welcome, and we address them appropriately.
Q248 Luke Murphy: I should have declared my membership of GMB and Unite earlier.
Your last five-year strategy was consulted on in 2020 and published in March 2021. Will you put out a similar consultation next year?
Q249 Luke Murphy: What are the biggest changes that you might expect this time?
David Peattie: The biggest changes will be about how technology can improve what we do. That includes some of the things we talked about earlier, but potentially it goes beyond that. We also want to reflect on what the ultimate end state of our sites is likely to be; that is an area that we would like to consult on as we think about it. With the spending review and the potential for a tighter fiscal settlement for us over the next five to 10 years, we are looking at where we can make productivity improvements and do more for less.
Q250 Luke Murphy: Reflecting on the current strategy, what do you think are the biggest successes and failures or areas for improvement in it?
David Peattie: The biggest successes have to be that we are now, for the first time, cleaning up all the legacy ponds and silos at Sellafield. It was not that long ago that there was no technical solution. We did not know how we were going to do it, but now we have proven on them all that we can do it. Now it is a matter of pace. As we said earlier, we are not meeting our operational targets there; we are proceeding cautiously, but there has been great success in cleaning up those.
I think we have also been successful, to use one of our phrases, in being trusted to do more. In other words, the AGRs will now be entrusted to the NDA for decommissioning, so that is a vote of confidence in our capability and strategy.
Thirdly and finally, the success of being able to recruit and retain people is something I never take for granted, but we have some fantastic people in our business, the very best in their field, dedicated every day to making a positive difference, so that is it.
On the downside, we have not made as much progress as I would have hoped on the high-hazard areas. On our capital projects, efficiency is not where it needs to be, as highlighted in the NAO report. In answer to the questions about culture, the overall culture in the NDA is not yet where it needs to be. We are making progress, and I think bringing in the younger generation is a massive help in that regard.
Q251 Sir Christopher Chope: I have a brief question. I am sorry that I was not here at the beginning; I have been at the Procedure Committee.
Nuclear is described by the Government as clean power. Almost all the evidence that you have been giving today has been about the waste, the contamination and the need for cleaning up as a result of nuclear power, so do you think that to describe nuclear as “clean power” is a misnomer?
David Peattie: No. Certainly, “low carbon” is a fair description of nuclear. It comes down to semantics, really, but it is a lot cleaner than many other sources. Perhaps the bias you have heard today is because we are the Nuclear Decommissioning Authority. We are not the nuclear development authority and it is not our job to develop new—
Q252 Sir Christopher Chope: Would you describe, for example, nuclear as cleaner than gas?
David Peattie: I would, yes.
Sir Christopher Chope: Why would you say that?
David Peattie: Because we are not depositing tonnes and tonnes of carbon dioxide in the atmosphere. We have a much smaller, measurable quantity of waste, which we can control and ultimately put away safely, without heating up the planet. In that sense, I believe it is a cleaner source than natural gas.
Chair: Just for Chris’s benefit, you might want to repeat what you said earlier about the more efficient decommissioning processes of new nuclear, compared with the historical challenges.
David Peattie: Future nuclear reactors will be much more efficient in their use of fuel, so there will be smaller volumes per unit of power generated in the future than there have been in the past.
Sir Christopher Chope: But your answer is based on the premise that CO₂ emissions are innately dirty.
David Peattie: That is interesting. If clean power is intended to help protect the planet, minimise the impact of humans on climate change and allow us to have energy security, then yes, I am basing it on that premise.
Sir Christopher Chope: The reason I ask is that there is a lot of confusion among members of the public, because obviously they know that CO₂ is not, in itself, inherently dirty, and they do not want to lose access to gas. As we heard from one of my colleagues, there is quite a lot of scepticism about nuclear. People look at Germany and see that it is preferring to carry on with coal rather than nuclear.
David Peattie: Yes.
Chair: They are trying to phase coal out, to be fair, Chris.
Q253 Ms Minns: I should have declared my membership of the APPG for nuclear energy. I am also a Prospect trade union member.
Just to circle back on the strategy, in your last strategy document you were anticipating high-level waste being transferred into the GDF in 2075. Are you anticipating any shift in that?
Corhyn Parr: We are holding that date of 2075.
Chair: Thank you all very much. I thank David Peattie, Euan Hutton and Corhyn Parr for their evidence this afternoon, and I wish everybody a very merry Christmas and a prosperous new year.