Nuclear Decommissioning Authority Annual Report & Accounts 2009/2010 HC477 £35.50 Nuclear Decommissioning Authority Annual Report and Accounts 2009/2010 Nuclear Decommissioning Authority Annual Report and Accounts 2009/2010 Nuclear Decommissioning Authority Annual Report & Accounts 2009/2010 Report presented to Parliament pursuant to Section 14 (6) of the Energy Act 2004 and Accounts presented to Parliament pursuant to Section 26 (10) of the Energy Act 2004 Report presented to the Scottish Parliament pursuant to Section 14 (8) of the Energy Act 2004 and Accounts presented to Scottish Parliament pursuant to Section 26 (11) of the Energy Act 2004 Ordered by the House of Commons to be printed on 15 November 2010. HC477 LONDON: THE STATIONERY OFFICE £35.50 Nuclear Decommissioning Authority Annual Report and Accounts 2009/2010 Some images supplied courtesy of site licence companies. Every effort is taken to ensure the accuracy of material or images produced or used by the NDA. However, the NDA cannot guarantee that the images shown will always be current, accurate or complete and does not warrant or endorse the accuracy or completeness of the images. © Nuclear Decommissioning Authority 2010. ISBN 9780102967470 Printed in the UK for The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office ID P002375138 11/10 Printed on paper containing 75% recycled fibre content minimum. Nuclear Decommissioning Authority Annual Report and Accounts 2009/2010 Contents 1 Foreword 2 Chairman’s Statement 4 Chief Executive’s Review 11 Health, Safety, Security, Safeguards and the Environment (HSSSE) Report 16 Financial Review 25 Directors and Executives 35 Directors’ Report 39 Corporate Governance 42 Remuneration Report 50 Statement of the Directors’ and Accounting Officer’s Responsibilities 51 Statement on Internal Control The Certificate and Report of the Comptroller and Auditor General to the Houses 55 of Parliament 57 The Annual Accounts 57 Consolidated Statement of Comprehensive Income 58 Consolidated Statement of Financial Position 59 Authority Statement of Financial Position 60 Statement of Cash Flows 61 Statement of Changes in Taxpayers’ Equity 62 Notes to the Financial Statements 117 Introduction to the Site Licence Company Reports 120 Sellafield Limited – Sellafield, Capenhurst 126 Magnox North Limited – Chapelcross, Hunterston A, Oldbury, Trawsfynydd, Wylfa Magnox South Limited – Berkeley, Bradwell, Dungeness A, Hinkley Point A, 138 Sizewell A 150 Dounreay Site Restoration Limited – Dounreay 153 Research Sites Restoration Limited – Harwell, Winfrith 157 Low Level Waste Repository Limited – Low Level Waste Repository 160 Springfields Fuels Limited - Springfields 163 NDA Owned Subsidiary Reports 163 Direct Rail Services Limited 164 International Nuclear Services Limited 165 NDA Properties Limited 166 Rutherford Indemnity Limited 167 Glossary 176 Contact Details Annual Report and Accounts 2009/2010. Copyright the Nuclear Decommissioning Authority 2010 ISBN 9780102967470 Nuclear Decommissioning Authority Annual Report and Accounts 2009/2010 Nuclear Decommissioning Authority Annual Report and Accounts 2009/2010 Foreword Charles Hendry Minister of State, Department for Energy and Climate Change As Energy Minister, tackling the nuclear legacy is at the top of my agenda. Having seen at first hand the challenges at Sellafield, it is clear to me that there is a vital and significant amount of work that must be done there and across the NDA estate to reduce risks and clean up the legacy. We need to tackle it urgently and vigorously. Tackling the nuclear legacy is an expensive business, made more so by a failure to act in the past. Pressure to reduce public sector expenditure is also great and it is essential that the NDA provides value for money. The NDA should be congratulated for seeking ways to improve the affordability of its programme whilst maintaining a focus on safety and tackling the highest hazards. It is also showing strong leadership by reducing its own costs, and in doing so setting a good example to its sites. Tough decisions lie ahead but the Government is totally committed to the NDA’s mission. Foreword 1 Nuclear Decommissioning Authority Annual Report and Accounts 2009/2010 packaging hazardous radioactive material; Chairman’s Statement putting in place management arrangements for low, intermediate and high level radioactive waste; safe storage of nuclear materials; demolishing redundant facilities and environmental restoration of land. Good progress has been made in all these areas and performance is reported in detail in the following pages. One of the paradoxes we face is that, in many cases, before we can decommission and demolish some facilities we must first invest in major capital projects such as constructing waste treatment and interim waste storage facilities, which are pivotal to reducing risk and hazard. With a programme of £1.4 billion on major construction projects over the next three years we are one of the largest construction customers in the UK. Although decommissioning is our long term Stephen Henwood focus we are also responsible for the Chairman continued operation of critical parts of national It is five years since the formation of the NDA nuclear infrastructure such as the reprocessing and, whilst this report focuses on the activities plants at Sellafield that are essential for and progress made in the last financial year, it dealing with spent fuel from the first and is also appropriate for us to reflect on progress second generation of nuclear stations, which in our mission since 2005. are between them producing nearly 20% of the UK’s electricity. The NDA was established in order to deal with the nuclear legacy created by the early nuclear In 2005 we inherited various commercial research programme and subsequent first assets and contracts. We aim to both deliver generation of nuclear power stations, dating appropriate value from them in order to offset back more than half a century. Our role is to be the call on the public purse for our programme a strategic authority that sets direction for the and to provide an optimum service to our sites under our control and to form a coherent customers, both in the UK and overseas. We and co-ordinated strategy to tackle the many have generated over £7 billion of income in our complex challenges we face. Our first strategy five years of operation comprising revenue was approved in 2006 and we are now in from electricity generation from the remaining consultation on our five yearly update. Magnox stations, spent fuel reprocessing and the disposal of assets such as land sales to In line with the approved strategy, we develop new nuclear operators. the priorities and major objectives for our sites to enable them to develop detailed plans for Other significant duties we continue to fulfil which they are then held to account to deliver. include the creation of pension arrangements In order to enhance performance, introduce for the 18,000 strong workforce across our 19 innovation and deliver greater value for money, sites, investment in nuclear-related skills so private sector expertise has been brought in, that we have the ability to complete our through competition, to manage delivery at our mission in the decades to come, and also sites. We have run two competitions; for our working with communities around our sites to largest and most complex site, Sellafield, and plan for and mitigate as far as possible the for the Low Level Waste Repository (LLWR). socio-economic impacts of decommissioning. The third competition, for Dounreay, is underway and the fourth will follow. One fundamental difference to the context in which the NDA operates today from that which In terms of our decommissioning and clean-up existed back in 2005 is the nuclear activities our primary focus is on retrieving and renaissance. The ‘new build’ agenda has Chairman’s Statement Nuclear Decommissioning Authority Annual Report and Accounts 2009/2010 placed our work into a greater spotlight and process as well as improving their raised public perception of its importance. It understanding of the estate through Board has already created new opportunities, such visits to Sellafield, Harwell, Chapelcross, as the sale of land to potential new build Sizewell and Bradwell in the year. operators, and we believe there are other synergies to be explored especially with regard At the executive level, the arrival of Tony to skills and in the nuclear supply chain. Fountain as CEO has brought a real focus on delivery and performance. Tony took over from We are clear in our responsibility to deliver our Richard Waite who was acting CEO until programme efficiently and we remain October 2009. Richard left the NDA at the end committed to reducing the pressure on the of August 2010 to take up a new role within the public purse particularly during a period of private sector, and I would like to thank him for extreme global economic challenge. In this his outstanding contribution not only as acting regard, one of our objectives is to improve the CEO but his various other roles since the start affordability of our programme, and we are of the NDA’s journey. Earlier in the year seeking to do this in the following ways. William Roberts and James Morse left the NDA having both made significant In each of our first five years we have contributions to the development of the incentivised our site licence companies to organisation in its first five years. deliver more work than planned, and for less cost. Cumulatively, this has delivered over It is a great credit to the executive team and £800 million of savings since 2005. our delivery partners that, once again, we have managed to control expenditure and generate Maximising income from our commercial income such that we have stayed within our assets helps to reduce the need for allocated budget despite the complexity of the Government funding but as our assets are estate for which we are responsible and the disposed of or come to the end of their lives, ageing infrastructure we rely upon.