Stephen Tromans QC 39 Essex Chambers, London

1 © Stephen Tromans QC, 39 Essex Chambers

CAMBRIDGE NUCLEAR WORKSHOP

NUCLEAR LAW IN THE UK: A PRACTITIONER’S PERSPECTIVE

Stephen Tromans QC

39 Essex Chambers, London

The history of designing, constructing and operating new nuclear power stations in the UK

has been described as an “often depressing story” (Simon Taylor, Privatisation and Collapse

in the Nuclear Industry” (Oxford, Routledge, 2007). At the inception of the nuclear

programme there was huge optimism. The White Paper, A Programme of Nuclear Power,

published in 1955 (Cmnd. 6618) described nuclear power as “the energy of the future”, and

thought it might take as much as “five or more years” to complete a nuclear power station,

“including finding the site, designing the station and building it.” At that stage, this was

undertaken by the state, through the Central Electricity Generating Board (CEGB).

Within this framework of publicly promoted and financed projects, the UK’s nuclear fleet

was constructed, comprising the nine Magnox stations in the 1960s, under the second phase

of the programme, the seven Advanced Gas Cooled Reactors (AGRs) in the 1970s and 80s,

and the single Pressurised Water (PWR) reactor at Sizewell B. These plants have provided a

stable baseload contribution to UK energy needs for 5 decades, and look set to continue to

do so for some time yet. Recently (17 February 2016) EDF as the operator of four AGRs at

Heysham 1 and 2, Hartlepool and Torness has obtained safety clearance from the regulator

to continue to operate the first 3 until 2024 and Torness until 2030. EDF has calculated that

this extension has the potential to avoid 80 million tonnes of CO2 emissions, equivalent to

taking all the cars in the UK off the road for three and a half years.

At the same time, the future for nuclear power in the UK does not seem as secure as would

be desirable, despite strenuous efforts by the UK government to create a favourable

legislative, regulatory and economic climate. Pro-nuclear policies have almost invariably

been driven by political, energy security and economic circumstances: the Suez crisis of

1956 provided impetus to the Magnox programme, as did the OPEC oil embargo and oil

price crisis to the 1970s AGR programme and the miners’ strike of 1983-4 to the PWR


initiative. At the same time, the wider issue of energy economics has been and remains the

key constraint. This is especially so following privatisation of the nuclear generating

industry in 1996. In December 1995, just before privatisation, the state-owned company

Nuclear Electric announced it would not proceed with investment in two further PWRs at

Hinkley Point and Sizewell, on the basis that the future of UK energy prices was not

sufficiently certain. At that point, the investment would have been between £2-3 billion for

each site. That decision has contributed to the energy gap now faced by the UK.

At the start of the 21st century, it did not appear that the nuclear industry had much of a

future in the UK. However, by 2008 the Business Secretary John Hutton was promoting the

goal of the UK becoming “the world’s number one location for new nuclear investment”.

This has entailed a number of steps by the government to promote and ease the path of

developing new nuclear power stations. These include:

1. A strong national policy in favour of nuclear power, underlain in particular by the need

to improve energy security and to reduce greenhouse gas emissions: see the White

Paper, The Future of Nuclear Power – the Role of Nuclear Power in a Low Carbon UK

Economy (Cm. 7124, May 2007).

2. A much more efficient planning regime to fast track major national infrastructure

projects, including nuclear power stations, under the Planning Act 2008. This avoids the

delays caused by monster planning inquiries, such as that for the Sizewell B project in

the 1980s and aims to conclude the examination of projects in a matter of months,

rather than years. This is underpinned by national policy statements, and applications

are to be determined in accordance with such statements, except in narrowly defined

circumstances (see s. 104 of the Planning Act). The process is heavily front loaded, and

in the case of nuclear power projects extends to the assessment and identification of

suitable sites for the period up to 2025: see NPS EN-6 Nuclear Power Generation (July

2011). In the case of Hinkley Point C, development consent (including many linked

items of infrastructure and considerable compulsory purchase powers) was granted on

19 March 2013, the application having been made on 31 October 2011. The

examination by the Panel was completed within 6 months (March – September 2012),

the report to the Secretary of State was issued within a further three months, and the


decision made within three months thereafter. That is a remarkably swift timescale for

such a massive, potentially controversial and first of its kind project. The consent

survived a legal challenge by the National Trust for Ireland on transboundary

environmental assessment: R (An Taisce (The National Trust for Ireland) v. The Secretary

of State for Energy and Climate Change [2014] EWCA Civ 1111. The Court accepted the

Secretary of State’s argument (para. 40) that “… evidence that the risk of a severe

nuclear accident is not merely unlikely, but extremely remote, is capable of being

‘compelling evidence’ that a proposed nuclear power station is not likely to have

significant transboundary effects, since it is common ground that such effects would be

likely to occur only if there was such an accident”. It has been pointed out by one

commentator that the legal challenge took 509 days since the decision was taken,

whereas the application took 496 days to be decided from when it was made, so that

the challenge more than doubled the time from application to possible implementation

(Angus Walker, Bircham Dyson Bell, 2 August 2014: https://www.bdb-

law.co.uk/blogs/planning-act-2008/570-an-taisce-loses-hinkley-case-at-the-court-of-

appeal-but-may-fight-on/).

3. Efficient systems for the prior justification of the practice of generating electricity from a

particular type of nuclear reactor, and for generic design assessment of reactor types so

as to reduce the time later taken in considering and determining applications for a

nuclear site licence. The Justification of Practices Involving Ionising Radiation

Regulations 2004 have been used to obtain robust decisions justifying generation of

energy from the Areva EPR and the Westinghouse AP 1000 (October 2010) and the

Hitachi-GE ABWR (February 2015). The first decision survived a legal challenge (see R

(Walker) v. Secretary of State for Energy and Climate Change [2011] EWHC 2048

(Admin)) and the ABWR decision was not challenged. Generic design assessment (GDA)

is an administrative process developed by the Office for Nuclear Regulation and the

Environment Agency allowing the regulators to assess the safety, security and

environmental implications of new reactor designs, separately from the applications to

build them at specific sites. It allows them to get involved with designers at the earliest

stage, where they have the most influence. By assessing at the design stage, any

potential issues can be identified and highlighted so that they can be addressed by the

companies who have submitted a design for assessment, before commitments are made

https://www.bdb-law.co.uk/blogs/planning-act-2008/570-an-taisce-loses-hinkley-case-at-the-court-of-appeal-but-may-fight-on/




to construct the reactors. The system has many benefits, both for regulators and

industry. In December 2012 ONR confirmed that EDF and AREVA's UK EPR reactor

design is suitable for construction in the UK and a Design Acceptance Confirmation

(DAC) and Statement of Design Acceptability (SoDA). The Westinghouse AP1000 reactor

design re-entered the GDA process in August 2014 with 51 outstanding issues remaining,

which will need to be resolved before Design Acceptance Confirmation and a Statement

of Design Acceptability can be granted. ONR are currently assessing Hitachi-GE's UK

Advanced Boiling Water Reactor (UK-ABWR ).

4. The UK has managed proactively any negative implications of the Fukushima accident.

This has involved playing a prominent role in international work within the IAEA, G8, G20

and other international fora, to provide an action plan in response; participation in the

EU stress test initiative; revisiting its own arrangements on public contingency planning

for such emergencies and how such arrangements are tested; and implementing

recommendations on planning controls around nuclear sites. The former chief nuclear

inspector, Dr Mike Weightman, published a comprehensive report in September 2011

on the implications for the UK nuclear industry, and this was followed up by a report on

implementation in October 2012: Progress in Implementing the Lessons Learnt from the

Fukushima Accident, which records the responses by operators to the industry-facing

recommendations. It does not appear that the Japanese accident has presented a

serious impediment to the development of new reactors in the UK.

Polls suggest that the majority of the public support nuclear power, largely on the basis

of energy security and job-creation. Those opposing it tend to be more concerned about

long-term waste management than operational safety. There have been a number of

YouGov surveys, but the most thorough is probably the survey conducted in March 2013

by the UK Energy Research Centre (Public Attitudes to Nuclear Power and Climate

Change in Britain Two Years after the Fukushima Accident, Poortinga, Pidgeon, Capstick

and Aoyagi, 19 September 2013). This shows that public support for new nuclear build is

linked to tackling climate change and improving energy security. By contrast to Japan,

and some other European countries, the UK public’s confidence in nuclear power and

those regulating it has been largely unaffected by Fukushima. Indeed, between 2005

and 2013 the public’s attitude to whether the benefits of nuclear power outweighed the

risks reversed. In 2005 around 40% believed risks outweighed benefits and just over 30%

believed the opposite. By 2013 the respective figures were just under 30% and just


under 40%. As of 2013, more respondents favoured building new nuclear power

stations (42%) than opposed it (32%).

Much has been made in some quarters of e-mails provided to The Guardian in the

immediate aftermath of Fukushima which showed collaboration between officials at the

Department for Business, Innovation and Skills and nuclear industry companies, which it

is said showed an “attempt to draw up a co-ordinated public relations strategy to play

down the Fukushima nuclear accident”. Whether or not this was a storm in a teacup, it

does of course illustrate a serious point, which is that regulation of the nuclear industry

must be rigorously separated from commercial and political interests which support the

industry. This is, or should be, a central tenet of nuclear regulation world-wide, though

unfortunately it was not properly implemented in Japan pre-Fukushima. What is striking

about the position in the UK is that on 14 March 2011, within 3 days of the accident, HM

Chief Inspector of Nuclear Installations, who is entirely independent of BiS, DECC or the

nuclear industry, had been requested to examine the circumstances of Fukushima and

what lessons could be learnt on safety. He had produced an interim report within 2

months, and a comprehensive 288 page report within about 6 months. As Dr

Weightman put it (p. (v)), in the UK the regulator (ONR) “operates independently both of

the industry and of Government, which is important given the Government’s policy of

promoting nuclear power”. BiS is not the regulator, nor is DECC. So long as they do not

mislead the public, they are free to promote nuclear power and if they see fit, manage

the adverse political or opinion consequences of an accident such as Fukushima. What

is much more important is that there is an independent regulator which the public can

trust to apply the highest safety standards and to ensure that operators are accountable

for learning lessons and improving safety in the light of such incidents.

5. The Government has been working to implement changes to the third party liability

regime made by the 2004 Protocols to the Paris and Brussels Conventions. The relevant

order (the Nuclear Installations (Liability for Damage) Order) was finally laid before

Parliament on 23 February 2016, and will come into force once the 2004 Protocols

themselves come into force. This will widen significantly the heads of liability for which

claims can be made and will increase the limit of liability to € 1.2 billion. It is however

fair to say that many types of loss or detriment which might result from a major incident

(e.g. enforced evacuation) would not necessarily be legally eligible for compensation in


the absence of physical injury or damage to property and nor would € 1.2 billion

approach the potential levels of compensation required in a worst case incident. The

OECD has estimated third party damage ranging up to $100 billion for the most extreme

event, and third party claims for Fukushima could it appears be around half that sum.

6. Finally, the government has attempted to create acceptable financial conditions for the

massive private sector investment necessary to build a new nuclear power station. On

October 22, 2013 the UK notified to the European Commission its proposed measures in

respect of Hinkley Point C in terms of an Investment Contract (the precursor of a

Contract for Difference under its Electricity Market Reforms in what was then the Energy

Bill) and a Credit Guarantee by HM Treasury under the UK Infrastructure Guarantees

Scheme. Essentially the proposal was that the company developing Hinkley Point C

would receive a fixed price (the Strike Price) for the electricity produced up to a

maximum cap, effectively guaranteeing a fixed return. The Strike Price was set at £92.50

per MW hour, indexed to the Consumer Price Index, to be reduced to £89.50 should a

second station be built at Sizewell C. It was the subject of commercial negotiation,

informed by modelling. The duration was 35 years. In addition the Investment Contract

would contain provisions to address the situation where the plant was shut down for

political reasons. It appeared that the UK might be in for a hard time in convincing the

Commission of the merits of its case that the support measures were acceptable under

State Aid rules. However, on October 8, 2014 it was announced that the College of

Commissioners had approved the proposals. This followed what Commission Vice-

President Almunia described as “significant” modifications to the proposals, which

would limit distortions of competition within the EU, as well as benefiting UK taxpayers.

The final decision is (EU) 2015/658. The Commission noted that the final

Investment/CFD Agreement would incorporate new “gain share” mechanisms on

construction costs and return on equity. On the question of whether the proposals

pursued EU objectives of common interest, the UK’s position was that the relevant

objectives were decarbonisation, security of supply and diversity of supply; that other

measures such as energy efficiency and demand side response were important (and

were being deployed) but could not attain their objectives alone; that it would be unduly


risky to rely on other technologies without nuclear; that in any event the UK had

determined that nuclear should be part of its energy mix, which it was entitled to do;

and that its energy policy was consistent with an objective of common interest under

the Euratom Treaty (promotion of the peaceful uses of nuclear energy). The UK also

clearly devoted considerable effort to explaining the various facets of market failure

which needed to be addressed, both for new and low carbon energy technologies

generally and nuclear energy in particular. These were not purely theoretical, but were

real, as witness the absence of investment in new nuclear power stations since market

liberalisation in the UK. Essentially the Commission accepted this case. The Minutes of

the 2100th meeting of the Commission held on 8 October (PV(2014) 2100 final) at which

the decision was taken indicate its political sensitivity and that it could be regarded as a

very important precedent. It was stressed that the scale of economic analysis to which

the proposals had been subject was enormous, if not unprecedented: the Chief

Economist at the Directorate-General for Competition had applied no less than 24

econometric models to it. A key finding was that the rate of return applied was

reasonable in view of the risks incurred in constructing and operating the plant. Whilst

the Commission was at pains to stress that subsequent proposals for State Aid approval

in the nuclear sector would be assessed individually, the decision will inevitably have

some precedent effect. The decision that the package was compatible with the internal

market under Article 107 TFEU will have been greeted with relief by the UK and no

doubt EDF. However, almost immediately there was speculation about possible legal

challenge to the Commission’s decision. Such challenges have now been formally

instigated by Austria (Case T-356/15 Austria v. Commission) and by a German energy

company founded by Greenpeace (Case T-382/15 Greenpeace Energy v. Commission).

The precise legal basis of the challenges is at present unclear. However, certainly in the

case of Austria it appears to be politically motivated. The decision to take action was

taken by the Council of Ministers on 22 June and subsequently approved by Parliament.

The Austrian Chancellor, Werner Faymann, is reported as having expressly stated that

the action is intended as a "… deterrent to investors, not only in Britain but throughout

Europe" and as "… a further step in [Austria's] anti-nuclear policy, whose long-term

objective is a nuclear-free Europe." It appears to argue that nuclear is not an innovative

technology, that it has an overall negative environmental impact, and opposes the


reasoning that it contributes to the promotion of an industry: It is of course a puzzling

conundrum that the Euratom Treaty, with its express objective “… to create the

conditions necessary for the development of a powerful nuclear industry which will

provide extensive energy resources …”, now has not only parties who support nuclear

energy but also parties who are ideologically opposed to it.

All this represents an unprecedented Governmental effort to support an industrial

technology. The question still remains however of whether it will be enough. The costs and

risks of building a new nuclear power station which will operate in a liberalised energy

market, constantly competing against other sources of electricity, may be just too great for

even the largest companies. The UK’s existing power stations were built on a very different

economic model, essentially by centrally-planned government utilities, simply seeking to

meet consumer demand at the lowest cost in the long term over the life of the project.

Where new nuclear build is proceeding, it is essentially under that model. In the UK, despite

all the impediments to developing new nuclear power stations having been resolved or

overcome, the front-runner, EDF, has not yet made a firm commitment to proceed with the

£24.5 billion Hinkley Point C project. It is now partnered with China General Nuclear

Corporation, holding a 33.5% share in the project. The delays not only present increasing

risks to the UK’s energy security until the project begins generating electricity – now no

earlier than 2025 – but also will play havoc with the UK’s carbon budget. It has been

estimated by Carbon Brief that each year of delay adds about 8-11 million tonnes of CO2 to

the UK’s emissions. To replace Hinkley Point’s contribution to zero-carbon emissions, it is

estimated that around 3,000-5,500 onshore wind turbines would have to be built, or 800-

1,500 offshore turbines, i.e. roughly doubling current capacity. Even then the intermittent

nature of wind energy means that fossil fuel back up would be needed. It is interesting in

this respect to note that the threat posed by unconstrained carbon emissions has

superseded for many environmentalists the perceived detriments and dangers of nuclear

power. The UK’s Committee on Climate Change regards new nuclear powers stations as

indispensable in reducing the carbon intensity of the energy sector.

Reticence in committing to investment decisions is not unique to the UK: in February 2016

the US federal Nuclear Regulatory Commission approved the construction of two new

reactors at the South Texas Project site near Houston, a process which had taken several

years. However, the costs of the project coupled with currently low power prices in Texas


mean that the projects promotor, NRG Energy, does not currently plan to implement the

licenses and is seeking other sources of funding for the $14 billion project.

There are three emerging areas which present challenges to new build, aside from these

economic issues. These are (1) security and safeguards; (2) corporate control and structures;

and (3) long term management of sites and wastes.

Security and safeguards

Unfortunately, nuclear terrorism and nuclear proliferation remain growing threats. Security

and safeguards therefore must assume an ever increasing importance in nuclear regulation

and in the design and construction of new reactors. This extends back to the GDA phase. As

the ONR website says:

“Security forms a major part of the Generic Design Assessment process and requires

the power station design company to submit Conceptual Security Arrangements

providing sufficient information to enable ONR to make an informed judgement of

the adequacy of the security aspects of the generic design. ONR Security Inspectors

work as part of the wider ONR regulatory team to ensure the design company

incorporates security by design across the full spectrum of protective security

measures, including physical protection, cyber and information and personnel

security. The Conceptual Security Arrangements will ultimately form the basis of a

Nuclear Site Security Plan for any licensed site using the design.”

Similarly the once recondite area of Export Controls over fissile materials has become a

mainstream area of concern. Its importance is shown by the collaboration in 2015 between

governments and industry in the BOTTICELLI project seeking to enhance and promote best

practices, the first meeting of the parties being held in Brussels in September 2015. They

subscribe to Ten Export Control Principles, which include establishing and implementing an

effective Internal Compliance Programme with commitment at the highest levels of

management.


Corporate control and financial structures

A key issue for the ONR in the current world of licensing is the management structure and

capabilities of the licensee. In the old world, the operator had all the relevant technical

know-how, and access to government funding. As the then Nuclear Installations

Inspectorate pointed out to the government in 1994 (Health and Safety Commission,

Submission to the Nuclear Review), when the Nuclear Installations Act was drafted the

operators of nuclear installations were government-owned organisations, which had

longevity, financial security and adequate resources. In today’s world these matters cannot

be taken for granted. There will be complex commercial and corporate relationships

underlying the project. All the main projects are the product of joint ventures between non-

UK parties: Hinkley Point C and Sizewell C between EDF (France) and CGN (China), with

Areva providing the reactor system; Wylfa and Oldbury between Hitachi (Japan) as owner of

Horizon and Hitachi-GE Nuclear Energy (Japan and USA) as technology provider; and

Moorside (NuGeneration) between Toshiba (Japan) and GDF Suez (France).

It is a fundamental tenet of nuclear site licensing in the UK that a single corporate body

should have responsibility under the licensing system (both for compliance with the licence

and for the purposes of liability and insurance under the Nuclear Installations Act) and that

there must be no ambiguity as to its identity. This presents novel and potentially difficult

challenges to ONR to ensure through the site licensing process that the licensee has the

intelligent customer capability to control the installation and operation of the reactor, the

corporate structure to ensure a clear chain of command on decisions affecting safety, and

the financial capability to plough in fund where necessary, possibly many years into the

future, to ensure that safety is maintained. Since privatisation of the nuclear industry, the

NII and later the ONR have developed site licence conditions to require approval of

management systems which give due priority to safety (licence condition 17), , the

appointment of suitably qualified and experienced person (licence condition 12), control

and supervision of operations by such persons (condition 26), , organisational capability in

the sense of adequate financial and human resources to ensure safe operation (condition

36(1)) and the making of arrangements for the control of changes to structure or resources

which may have safety implications (condition 36(2)).


Long term management of the site

One area that has perhaps been neglected in regulatory terms is the long term management

of nuclear sites. Decommissioning is of course an important aspect of site licensing as is the

decision by ONR as to when the site is deemed to have ceased to represent any danger from

ionising radiation (see Nuclear Installations Act 1965, s. 5(3)). That is however only one

aspect of the regulatory scheme. Decommissioning of a nuclear site will result in large

quantities of radioactive waste, subject to environmental permitting by the Environment

Agency, Natural Resources Wales, or SEPA in Scotland. Not all of this material will be

removed for disposal off-site. Buried structures such as foundations, drains and pipework,

may well be sufficiently contaminated to themselves become radioactive waste when no

longer in use, as may excavated soil which is redeposited on the site. When the present

generation of nuclear power stations was built little, or in truth probably no, consideration

was given as to these issues.

The relevant agencies have recently issued a consultation document providing guidance on

these issues: Guidance on Requirements for Release of Nuclear Site from Radioactive

Substances Regulation (February 2016). Under this guidance operators of new facilities will

be expected to have regard right from the outset as to how they intend to design, build,

operate and decommission the facilities so as to meet regulatory standards for release from

regulation. The overarching requirements are the reduction of radiological risk to as low as

is reasonably achievable (ALARA) and the concomitant principle of optimisation. In

particular, operators will need, at the outset, to ensure the site for the reactor is

characterised before construction commences and that an appropriate Waste Management

Plan (WMP) and Site Wide Environmental Safety Case (SWESC) are in place. The WMP

should provide “… a comprehensive description of the current intent for dealing with all the

anthropogenic radioactivity remaining on or adjacent to the site”. The SWESC should be a

set of claims addressing “… the present state and all envisaged future states of the site, both

during its lifetime of the permit and during the indefinite period after the permit has been

surrendered”. This may require the assumption of a period of restricted use pending

radioactive decay and attenuation processes, provided the operator can demonstrate that


reliable controls can be put in place: such a period is unlikely to exceed 300 years “because

of the major social changes that may take place over long periods of time” (para. 3.3.10).

Conclusions

Over the past decade the UK government has made strenuous and sustained efforts to

promote a nuclear renaissance by putting in place the policy, legal, regulatory and financial

frameworks necessary for new build. Ultimately however, it is probably the market which

will decide whether this takes place and to what extent.

Biography: Stephen Tromans QC is a barrister specialising in energy, infrastructure and environmental law. He

has a particular focus on nuclear law and has worked with both EDF and Horizon in relation to their current

projects in the UK. He is the author of the leading textbook, “Nuclear Law” and is a board member of the UK

arm of the International Nuclear Lawyers’ Association (INLA UK). He represented the Nuclear Industries’

Association in successfully defending the legal challenge to justification of the EPR reactor design.

Further information is available at http://www.39essex.com/barrister/stephen-tromans-qc/

http://www.39essex.com/barrister/stephen-tromans-qc/

Stephen Tromans QC 39 Essex Chambers, London

Documents

Transcript of Stephen Tromans QC 39 Essex Chambers, London