Doubts over commercial future threatens to scupper BNFL privatisation proposals

The UK Government’s hopes of even partially privatising British Nuclear Fuels (BNFL) have receded.

The UK Government’s hopes of even partially privatising British Nuclear Fuels (BNFL) receded further last week when its own advisory committee on nuclear waste cast doubt on the future of the company’s core reprocessing business.

The Radioactive Waste Management Advisory Committee (RWMAC) said BNFL’s £3bn Thorp reprocessing plant at Sellafield would exhaust its current contracts by 2010, and following that the company would find it ‘difficult’ to secure further contracts from the UK or overseas.

In its 20th annual report, published last week, the committee concluded that ‘reprocessing at Thorp may be a time-limited activity’.If the reprocessing of spent fuel has no future beyond the next 10 years, then the company has little prospect of becoming a commercial proposition that will attract investors.

The activity is currently the company’s main source of revenue, and its attempts to diversify its sources of income are likely to founder if reprocessing is halted.

Its troubled Mox fuel business — which makes commercial reactor fuel from a mix of plutonium and uranium oxide — depends on its ability to offer reprocessing customers their plutonium back in a safe and usable form.

Mox is otherwise hopelessly uncompetitive with new uranium fuel.The loss of reprocessing revenues would make it very hard for the company to realise its ambitions in the international decommissioning market.

Revenue from its ageing fleet of Magnox power stations is also time limited, given the company’s commitment to close all but two of the stations by 2008.

RWMAC suggested they may have to close even sooner to allow the old B205 Magnox reprocessing plant at Sellafield to complete operations by 2012 in line with the company’s undertaking.

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