Meg Hillier MP Chair Public Accounts Committee House of Commons London SW1A 1AA Our Ref: CEO(20)-0066

23rd October 2020

Dear Ms Hillier,

Re: Public Accounts Committee Hearing - The Nuclear Decommissioning Authority's management of the Magnox contract (HC 653) – Follow-Up Actions I was grateful for the opportunity to talk to you and other members of the Committee on 5 October. By way of a follow up, I committed to providing some further information, which was helpfully summarised by the Clerk in an email on 8 October.

I have set out my responses below and in the attached appendices.

1) Exit payment terms I have recently spoken to BEIS officials regarding this topic and they have undertaken to reply on behalf of BEIS and the NDA

2) Detailed plans on each of the [Magnox] nuclear stations, including the order in which new sites will complete, and old sites fully decommissioned

AND

3) Which of the 10 Magnox nuclear power stations the NDA would like to get into care and maintenance first Please see the attached appendix A. This sets out the current plans for the sites as well as information regarding the latest proposals set out in the draft NDA strategy, which is currently subject to consultation.

4) Provide the latest quarterly performance report Attached as appendix C is a copy of the current Quarter 2 Performance Report for

the NDA group. This is the report provided to the NDA Board, BEIS and UKGI for the purposes of our performance review discussions. I am happy to provide this to the Committee, however due to reasons of nuclear, security and commercial sensitivity this report should not be shared beyond the Members and Clerks of the Committee and the National Audit Office.

5) Provide details regarding the NDA’s efforts to improve public image Please see attached as appendix B, details of some recent NDA activities which have been of wider international, UK Government, trade and public benefit. Due to security and nuclear sensitivity some of these achievements have not been previously published. The attached note has been drafted to be suitable for publication, however I would be happy to talk to you privately in more detail about these and further examples of the NDA’s recent achievements.

6) David Peattie agreed to meet with Mr Liddell-Grainger I spoke with Mr Liddell-Grainger by phone on Wednesday 21st October and had a very constructive discussion.

If you have any further questions or require clarification, please let me know.

Yours sincerely,

David Peattie C.Eng. Chief Executive Officer & Accounting Officer Nuclear Decommissioning Authority

Copy:

Sarah Munby, Permanent Secretary, BEIS

Stephen Speed, Director, Nuclear, BEIS

NDA Board Members

Appendix A – Magnox Decommissioning Timescales

I undertook to write to the Committee regarding the current plans for the Magnox sites to enter their Care and Maintenance state and for final completion.

We work closely with stakeholders to define site plans, with the pace of decommissioning and remediation set by factors such as priority and achievability. Achievability is influenced by elements such as resources, waste management infrastructure and technology.

End states and interim states

We use the terms end and interim states to describe a site’s decommissioning journey. End states are the planned‐for conditions of a site at the end of decommissioning.

Interim states describe the milestones and decision points on the way to a site’s end state and help focus near‐term delivery. Our current strategy for Magnox includes taking the sites to an interim state also referred to as ‘care and maintenance’. This describes the point after which a site’s reactor has been made safe for a planned period of inactivity before decommissioning activities recommence to achieve the end state. This is known as a ‘deferred decommissioning strategy’.

In 2019 Bradwell became the first of the Magnox sites to reach care and maintenance.

Magnox schedule

The recent NAO ‘Terminating the Magnox Contract’ report highlighted the difficulties in updating lifetime plans for the Magnox sites and recognised that, as a consequence of this, the plan under the previous parent body model was not up to date. Work is now ongoing with the new Magnox subsidiary organisation to review and update the plans for each of the sites, incorporating latest thinking and new learning.

In light of the previous plan not being up to date, in 2019 NDA commissioned a review. As stated by NAO this: “was partly intended to validate existing information on CFP performance, improve its [NDA’s] intelligent client capability in the final stages of the contract and to facilitate the transfer of responsibility for Magnox sites to the new management.” The NAO also recognised the inherent uncertainties involved in cleaning up the UK’s nuclear sites and its impact on forecasts.

The NDA’s 2019 review was principally focused on financial modelling to provide a better estimate of the likely cost of the work required to progress to the care and maintenance state for each site. The review necessarily (due to timescales) was informed by risk analysis and conducted at a high level, providing indicative dates. These dates have not been fully validated or assured and so the Magnox subsidiary’s development of the lifetime plan will provide greater accuracy going forward. It is acknowledged there will be some impact on the outline dates for the sites’ interim states. At the time of transitioning Magnox to a

A/1 subsidiary the review information was provided to the then incoming Magnox Executive Team, who are currently assessing and updating the lifetime plan.

Previous iterations of important interim state milestone dates have been published in the NDA’s annual Business Plan however, due to the ongoing re‐assessment of the site plans and consultation on a new strategy (see below), the revised dates have not yet been published.

The timetable provided below is one based on the 2019 high‐level modelling exercise* described above. Revised dates will be informed by the update to the lifetime plan, future agreement of our revised strategy, and uncertainties that arise at each of the sites:

Magnox Former Power Interim ‘care and Station Sites maintenance’ state* Bradwell 2019 (achieved) Chapelcross 2026/27 Hunterston ‘A’ 2026/27 Wylfa 2026/27 Dungeness ‘A’ 2028/29 Sizewell ‘A’ 2028/29 Berkeley 2029/30 Trawsfynydd 2029/30 Oldbury 2030/31 Hinkley Point ‘A’ 2032/33+

Under the previously agreed strategy, the date set for all Magnox stations reaching final site clearance was 2105, noting that under Scottish Waste Policy, waste will continue to be stored onsite until 2314.

Strategy 4 and site‐specific proposals

We have recently reviewed the Magnox reactor decommissioning strategy and outline the current thinking in our ‘NDA Strategy 4’ draft, which is currently out for public consultation. While a deferred decommissioning strategy (with a period of care and maintenance) may remain the most appropriate strategy for some sites, we have concluded that it should not be the blanket approach for all sites. Rather, a site‐specific approach should be adopted; selecting the most appropriate decommissioning strategy based on factors including a site’s condition, design, location and age. For some sites this could result in decommissioning work being brought forward. New site‐specific decommissioning strategies and revisions to the lifetime plans will be defined and implemented over the next 18 months and take account of the latest learning. Any changes will be subject to the necessary consultation, stakeholder engagement and approvals.

A/2 Appendix ‘B’ – Examples of NDA’s recent achievements

Internationally Renowned Transport Capability NDA’s subsidiary International Nuclear Services (INS) is the only organisation in the world that offers a high‐security “Category 1” nuclear shipping capability. Working alongside the Civil Nuclear Constabulary’s Strategic Escort Group it has used its unique transport capabilities to deliver a number of critical UK decommissioning programmes and high‐profile international security projects, including significant non‐proliferation and global threat reduction efforts. In recent years INS has transported sensitive materials including Highly Enriched Uranium (HEU) and Plutonium to and from countries around the world including Japan, Germany, Switzerland and the United States. In 2016 INS completed a transport project involving the removal of plutonium and HEU from the Fast Critical Assembly facility in Japan to the United States. This was hailed by the then President of the United States, Barack Obama, as “The largest project in history to remove nuclear material from a country.” These transport operations are important milestones in securing nuclear materials and reducing the risk of nuclear proliferation. They were delivered by UK assets and expertise in collaboration with international partners and have helped make the world a safer place. Transfer of Plutonium from Dounreay The safe and secure management of civil separated plutonium is a priority for the UK government and an important part of the NDA’s mission ‐ to clean up the UK’s nuclear sites safely, securely and cost‐effectively with care for people and the environment. In 2019 the NDA completed a programme to transfer civil separated plutonium held at Dounreay, to Sellafield. This means that all significant UK stocks of this material are now held in storage at Sellafield ‐ the UK’s centre of excellence for plutonium management. The successful completion of this important programme involved the co‐ordinated efforts of a committed team of extremely skilled people from several organisations including the licensees of the two sites (Sellafield Ltd and DSRL), our specialist transport companies (INS, PNTL and DRS), the UK Government, regulators, the Civil Nuclear Constabulary (CNC) and the police services in both Scotland and England. Completion of this programme was a significant milestone for our mission. It meant further progress towards the decommissioning and remediation of the Dounreay site itself, while the NDA and Sellafield Ltd can now prioritise the management and treatment of the material during its safe storage at the site.

B/1 Direct Rail Services (DRS) ‐ Operating throughout the COVID‐19 pandemic NDA subsidiary Direct Rail Services (DRS) also undertakes non‐nuclear business in consumer goods and general freight markets in order to maintain and enhance its capabilities. DRS has pulled out all the stops to make sure it has carried on delivering essential services throughout the Covid‐19 outbreak. As demand for supermarket goods soared DRS has ensured it continues to operate at full capacity despite the challenges of operating within a national crisis. In the months from April to September 2020 DRS delivered 74,467 containers full of essential supplies across the country, running some of their longest trains and heaviest loads. If placed end to end these containers would stretch further than Land's End to John O'Groats. As well as keeping supermarkets stocked their vital mission of keeping the UK’s nuclear power stations running was also of national importance. In the same period, DRS ran 82 services taking spent nuclear fuel for safe processing, ensuring the country’s nuclear power stations could operate and the lights were kept on. DRS also provides specialist services to the Ministry of Defence. Transfer of highly enriched uranium: In December 2018 the NDA and US Department of Energy’s National Nuclear Security Administration (NNSA) completed the project to transfer around 700kg of highly enriched uranium (HEU) from Dounreay, in northern Scotland, to the USA. The HEU transfer was undertaken as part of UK Government’s commitment to the 2016 Nuclear Security Summit held in Washington DC. Completion of the transfer was an important milestone in the decommissioning and clean up of the Dounreay Site. The HEU will be processed in the US to be used as fuel in civil nuclear reactors ‐ for entirely peaceful purposes. The US is sending a different form of the material to Europe, where it will be used as research reactor fuel and in the production of medical isotopes." More than a dozen US and UK organisations participated in the transfer. The HEU was moved in batches from Dounreay to Wick John O'Groats Airport and then flown to the USA using US military Boeing C‐17 transport aircraft. Removal of the material from Dounreay is part of a worldwide effort to increase nuclear security by reducing HEU inventories. It also is part of a 2014 agreement between DOE/NNSA and the Euratom Supply Agency to reduce HEU while supporting medical isotope production and research reactors in Europe.

B/2 Decommissioning Progress on Sellafield’s Legacy Fuel Storage Ponds Sellafield’s legacy ponds and silos are some of the most complex and difficult decommissioning challenges in the world, not just the UK. They date back to the 1950s and the very start of the UK nuclear industry. They may be a unique and difficult decommissioning challenge to overcome today, but these facilities played a vital role in keeping the UK's nuclear power stations operating and generating low carbon electricity for over half a century. Tangible progress is being made with decommissioning these complex and challenging facilities:  All the main retrievals systems are now in place and both legacy ponds are in full 'production' emptying their radioactive contents.  In the original Pile Fuel Storage Pond we have: o Removed 300 tonnes of solid radioactive wastes o Removed the bulk of the nuclear fuel inventory and eliminated the criticality hazard o Made good progress in removing the radioactive sludge and the radioactive content of the pond has been reduced by 75%  In the later First‐Generation Magnox Storage Pond we have: o Exported over 100 tonnes of nuclear fuel o Removed around 100m3 of radioactive sludge and areas of the pond floor are now visible for the first time in 50 years. Progress is also being made in Sellafield’s legacy silos where the complex equipment required for waste retrieval is being installed and tested and we plan to conduct active trials during next financial year. Magnox fuel storage pond decommissioning: Three of our Magnox sites ‐ Dungeness A, Oldbury and Sizewell A ‐ achieved major milestones in their ponds’ decommissioning programme. The different nature and issues of the ponds meant deploying a variety of technologies and techniques. Teams of commercial diving specialists were deployed at Dungeness and Sizewell to cut up and retrieve underwater items, while Oldbury’s relatively clean ponds were emptied using more standard methods. Across the 10 Magnox reactor sites, the ponds clean‐up programme was anticipated to cost around £300 million. Introducing innovative processes and shared learning have reduced the earlier original estimate by £45 million. The techniques for using divers are now also being deployed in one of Sellafield’s ponds.

B/3 Magnox sites defueled: In September 2019 the NDA reached a major decommissioning milestone when the defueling of the last Magnox site was completed. Defueling the Magnox reactors is one of the most important steps towards completing the NDA’s mission of decommissioning the legacy from the earliest days of the nuclear industry. The last of the spent fuel elements were finally removed from the nuclear reactors at Calder Hall, and Wylfa, which accounted for over 99% of the radioactivity on those sites. Integrated Innovation Competition In 2017 we launched a challenge for our supply chain ‐ Integrated Innovation in Nuclear Decommissioning (IIND) – calling for ideas to tack a high‐hazard decommissioning challenge at Sellafield. The challenge was to develop remote or robotic solutions that could access confined spaces at Sellafield, accurately measure radioactivity levels and deploy robotic equipment to cut up large items, separate the waste and retrieve it for safe storage. Funded by ourselves, Innovate UK and BEIS, the challenge totalled £8.5million over two years and attracted over 100 businesses. Two winning projects, led by Barrnon and Jacobs, were chosen to take their ideas forward. In addition, I mentioned to the committee about the innovative technologies that are now being deployed which have benefitted from early research and development funding support. The particular example that I used was the ‘Laser Snake’ which is a remotely deployed piece of equipment employing a laser to cut up materials in hard to reach radioactive environments which would preclude personnel access. Nuclear graduates In 2018 the NDA’s nucleargraduates scheme celebrated its 10th anniversary. NDA marked the occasion with a pledge to recruit more graduates into the scheme each year with the aim of helping to futureproof and diversify the UK’s nuclear workforce. This year’s intake of graduates is the largest ever. The NDA will put around £15 million in total skills investment over the next 10 years. It links closely with the NDA’s role in the Nuclear Sector Deal in helping to create a sustainable and diverse future workforce for the industry. NDA’s skills strategy and focus is designed to ensure a workforce ready to take on the future challenges and developments the nuclear sector will bring.

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