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Geological Disposal Facility Programme: Accounting officer assessment 2019 (HTML)

Updated 12 June 2023

Department for which the accounting officer who made the assessment is responsible:

Department for Business, Energy and Industrial Strategy

Project title:

Geological Disposal Facility Programme

Main scheme project stage:

Full Programme Business Case was approved by BEIS PIC March 2019 and HM Treasury approval in Oct 2019 following a TAP meeting in July 2019.

Introduction

It is normal practice for Accounting Officers to scrutinise significant policy proposals or plans to start or vary major projects, and then assess whether they measure up to the standards set out in Managing Public Money. From April 2017, the government has committed to make a summary of the key points from these assessments available to Parliament when an Accounting Officer has agreed an assessment of projects within the Government’s Major Projects Portfolio.

This Accounting Officer Assessment was made of the Geological Disposal Facility Programme, following its Full Programme Business Case stage. I have made the assessment as the Principal Accounting Officer for the Department for Business, Energy and Industrial Strategy (BEIS) charged with oversight of the Nuclear Decommissioning Authority.

Background and context

The Nuclear Decommissioning Authority’s (NDA) overall mission is to decommission and clean up the UK’s nuclear legacy – both sites and materials. Critical to this is the need to identify and deliver a final disposal solution for the UK’s most hazardous radioactive waste. Currently, this waste is treated and safely packaged in solid form and held safely and securely at over 20 surface storage facilities across the country. While these facilities are safe for the short to medium term, they need to be rebuilt every 50-100 years to ensure they continue to be safe and secure. Without a final disposal solution, this above ground storage would need to continue for many thousands of years.

Geological disposal is agreed by the scientific and international community as the only available disposal solution for highly radioactive waste. It involves isolating radioactive waste deep (between 200m and 1000m) inside a suitable rock volume to ensure that no harmful quantities of radioactivity ever reach the surface environment. A geological disposal facility will be a highly engineered structure consisting of multiple barriers that will provide protection over hundreds of thousands of years.

The Geological Disposal Facility (GDF) Programme is a complex, multi-billion-pound infrastructure programme with a development and operational lifecycle that spans more than 150 years. It will generate many thousands of jobs at the facility and in the wider supply chain, delivering a significant economic benefit through the development of capability in skills, qualifications and ongoing research and development.

BEIS and NDA have commissioned the GDF Programme within Nuclear Waste Services, an Operating Company of the NDA Group, to deliver a geological disposal facility for the UK

There are 3 GDF Programme Objectives:

• to identify a suitable site in which to develop a GDF by building trust and working in partnership with one or more communities and gaining their consent and support; through ensuring the programme facilitates economic benefits and growth, delivers regional jobs and skills and a positive legacy
• to deliver a permanent solution for the safe disposal of Higher Activity Waste (HAW) through the safe, sustainable, and cost-effective design, construction, operation and closure of a GDF
• to enable the timely retirement of the significant and currently enduring financial liability and risk associated with above ground storage of Higher Activity Waste

Assessment against the Accounting Officer standards

Regularity

The Energy Act 2004 provides the powers for the Secretary of State to make annual financial grants to the Nuclear Decommissioning Authority for the purpose of carrying out its responsibilities as designated in the Act, which includes facilities for disposing of hazardous material. The Energy Act also provides the powers for the NDA to provide funding to parties, which includes ensuring its subsidiaries, to undertake designated responsibilities on its behalf. The NDA is required to obtain BEIS’ and where appropriate HM Treasury’s prior written approval before entering into any undertaking to incur any expenditure that falls outside the delegations or which is not provided for in NDA’s annual budget as approved by BEIS. For the GDF programme a programme level business case was approved by BEIS and HMT in 2019 with an overall cost range envelope of £20.3 billion - £53 billion. Individual stages of the programme, most of which have a total projected spend >£100 million, will then also require project level business cases to be approved by BEIS and HMT and these are considered on a case-by-case basis. Actual expenditure by on the GDF programme is limited by the annual funding limit for Nuclear Waste Services set by NDA and will be a portion the NDA annual funding allocation agreed with BEIS and HMT at each spending review period.

Overall assessment: My assessment is that the regularity test is satisfied.

Propriety

As a nationally significant infrastructure programme with novel, contentious and repercussive (NCR) elements, the reputational risks are being actively managed in conjunction with BEIS. This will minimise the risk of unacceptable damage to all associated reputations. All projects within the GDF programme that are of a value greater than £100m or deemed NCR, follow a clear governance route through NDA into BEIS for the Project Investment Committee (PIC) and Ministerial approval followed by Treasury Approval Point (TAP) and Chief Secretary to the Treasury approval. The GDF Programme Business Case was presented to the Treasury Approval Panel (TAP) on 09 July 2019 and received formal HMT approval on 02 October 2019.

Taking learning from other similar large-scale programmes, the GDF and supporting boreholes have been designated as Nationally Significant Infrastructure Projects (NSIPs). Development Consent Orders (DCOs) will be raised against the National Planning Statement for a GDF, which was debated and approved by parliament.

Additional controls have been put in place as the programme delivers specific community related arrangements, meaning the community investment fund grants and property value protection provisions for community properties. Both of these have been subject to fraud assessments, have additional controls in place, and are monitored through regular internal audits.

The GDF programme is subject to considerable scrutiny and challenge through programme, NDA and BEIS governance and assurance arrangements, which ensure all significant spend and procurements are justified, value for money, and subject to financial and process scrutiny. New governance arrangements are in place, implemented through the NDA Group Operating Framework, and the programme is operating in accordance with the NDA Group Governance Roadmap.

Overall assessment: My assessment is that the propriety test is satisfied.

Value for money

A GDF will provide a safe, secure, value for money permanent solution to the UK’s legacy and future higher activity radioactive waste. The value for money assessment and economic appraisal consistent with HM Treasury’s Green Book, as presented in the GDF Programme Business Case 2019, continues to be robust.  Without a route for permanent disposal of the Higher Activity Waste designated to be disposed of in the GDF will alternatively require safe and secure storage in on surface facilities over an indefinite time period. This will require the redevelopment of storage facilities as they degrade over time and also facilities to unpack and repack the Higher Activity Waste as the storage containers degrades. These requirements alongside an ongoing security presence for these materials, which will represent a hazard for many centuries and millennia to come, mean that indefinite storage is not a credible option.

The economic case as presented within the FBC considered 4 short listed options: a ‘do minimum’ option of long-term storage with GDF deferral of around 250 years (option 1); continuous GDF programmes with progress being made as rapidly as feasible (option 2); and 2 further options delaying the first emplacement of waste compared with option 2 by 20 and 50 years respectively (options 3 and 4).

The options assessment considered the strategic fit including the reduction in risk from long term surface storage, the ability to complete the decommissioning missions and support to nuclear new build through effective waste options in place. The expected costs for each option were assessed considering the construction and operation costs as well as the cost for safe and secure of the HAW over a period of 433 years. Deferral of first waste emplacement results in significant additional costs to build or replace facilities that would not otherwise be needed, (for example, Option 1 an additional £50 billion of lifetime costs), hence option 2 provides the lowest lifetime costs.

The GDF programme is still at an early stage of development. It will not have a confirmed location until the 2030s, and only then can we confirm the timescales and costs, which are heavily dependent on the geology and location. So, the costs ranges should be understood as early estimates.

The whole life costs for the programme range from £20.3 billion as a baseline minimum cost estimate for an assumed inventory to £53.3 billion as an upper estimate including risk, optimism bias and uncertainty, covering a programme lifecycle of around 190 years.

The costs of the development and the operation of a GDF are and will be met by the waste owners. This is primarily 3 entities; the NDA and Ministry of Defence met by the UK government and EDF Energy Nuclear Generation Group Limited (EDFe) covered by the Nuclear Liabilities Fund. In addition, waste arising from the operations of Nuclear New Build will be backed by a funded decommissioning programme.

The benefits of a GDF are wide-ranging and will span many future generations. It is an essential environmental protection project - by finally disposing of legacy and new nuclear build radioactive waste and providing a safe, permanent solution. This avoids the costs and risks of keeping the waste safe and secure in storage facilities above ground for many thousands of years.

As a large-scale infrastructure, construction and operational programme, it will also provide a number of additional benefits through a transformational opportunity for its host community, creating thousands of long-term jobs, a highly skilled local workforce, and business opportunities for more than 100 years.

In conclusion the GDF programme being delivered was the preferred VFM option supporting the current plans for decommissioning whilst minimising additional expenditure due to extension of interim storage arrangements.

Overall assessment: My assessment is that the value for money test is satisfied.

Feasibility

The GDF Programme is complex because it must deliver the first of a kind nuclear related infrastructure in the UK and deliver the societal aspects of a community consenting to the development. To do this the GDF Programme will; identify a technically suitable site (both feasible and acceptable), with a willing host community, in which to design, build, and operate safe and secure geological disposal facilities and finally to close the facility once disposal is complete. These facilities will involve a surface site (to receive packaged waste) connected to a series of disposal vaults and tunnels located 200m-1000m underground.

The GDF Programme, although a first of a kind project within the UK is being delivered in line with international good practice and experience. The International Atomic Energy Agency (IAEA) advocates that disposal in geological formations is a long-term management solution for high level and intermediate level waste and as such sets the safety and security standards that apply to it. The GDF programme has worked with the international community for many years and has built its programme based on international best practice and learning. There are ongoing arrangements for learning from similar infrastructure and methods of site selection and delivery being used by Finland, Sweden, Switzerland, France, and many other international partners.

The programme features on the Government’s Major Project Portfolio and is subject to regular IPA assurance reviews.

Overall assessment: My assessment is that the feasibility test is satisfied.

Conclusion

As the BEIS Principal Accounting Officer, I have considered this assessment of the Geological Disposal Facility Programme. The case received scrutiny and approval by the BEIS Accounting Officer in March 2019. It has undergone relevant scrutiny within the NDA Group, and I am content to align my approval to this given the information provided to BEIS at that date.

I have prepared this summary to set out the key points which informed my decision. If any of these factors change materially during the lifetime of this project, I undertake to prepare a revised summary, setting out my assessment of them.

The summary included in this letter will be published on the government’s website (GOV.UK). Copies of this letter will be deposited in the Libraries of the House and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Sarah Munby
Permanent Secretary, BEIS
March 2019