A £1bn nuclear white elephant

A controversial nuclear recycling plant, approved by the Government despite warnings over its economic viability and reliance on unproven technology, has racked up costs of more than £1bn and is still not working properly.

Backers of the plant at Sellafield, which promised to turn toxic waste into a useable fuel that could be sold worldwide, had claimed the plant would make a profit of more than £200m in its lifetime, producing 120 tonnes of recycled fuel a year. But after an investigation by The Independent, the Government admitted technical problems and a dearth in orders has meant it has produced just 6.3 tonnes of fuel since opening in 2001.

With construction and commissioning costs of more than £600m, the facility, known as the Mox plant because of the mixed oxides (Mox) fuel it is designed to produce, has cost more than £1.2bn, confirming its status as the nuclear industry's most embarrassing white elephant and one of the greatest failures in British industrial history, losing the taxpayer £90m a year. Green campaigners and opposition MPs are now calling for the plant to be closed immediately, and a minister who fought its construction at the time has called for a public inquiry into how the plant was ever given the go-ahead.

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The revelations are a blow to the Government as it plans to lead Britain into a "nuclear renaissance", pinning its hopes on nuclear technology to help meet its ambitious targets on reducing carbon emissions by 80 per cent by 2050. A spokesman for the Department of Energy and Climate Change said the performance of the plant was "clearly disappointing".

The Government had tried to keep details of the plant's losses private. The Nuclear Decommissioning Authority (NDA), the publicly funded body which owns the plant, initally refused to release details of the losses, citing confidentiality agreements in commercial contracts. But in a table published by the Government on the day of the G20 summit, the embarrassing extent of the plant's losses was finally disclosed.

Michael Meacher, who tried to block approval for the plant as Environment minister, said: "This waste of taxpayer's money is unforgivable. The construction of the plant was resisted for years. But that was overridden by Tony Blair on the basis of assurances from the nuclear industry that the Mox plant would be cost-effective and a market for its fuel would develop.

"These claims have proved illusory. But even the most pessimistic judgement never predicted that the first decade of its operations would fritter away two-thirds of a billion pounds on generating no more than 4 per cent of its target production. There should be a public inquiry into this scandal and those responsible should be held to account."

Speculation has now grown that Ed Miliband, the Climate Change Secretary, is preparing to bite the bullet and close the plant, which has faced five public consultations, legal challenges and safety concerns. The NDA admits the future of the plant is "under review".

Opposition MPs slammed the performance of the facility. "The Mox plant at Sellafield has proved to be a costly white elephant and a black hole for taxpayers' money," said Simon Hughes, the climate change spokesman for the Liberal Democrats. "This is a prime example of Labour's misguided and hugely expensive continuing love affair with nuclear power. Building a new generation of nuclear power stations is throwing billions of pounds of good money after bad. They are never built on time or on budget and they will not solve the UK's energy needs."

The plant has had an unhappy history. As soon as it was proposed in the 1990s, Greenpeace raised concerns about the safety of reprocessing used uranium and plutonium, and then transporting the weapons-grade material to customers around the world. Scientists, economists and MPs also questioned the financial viability of the project. Though the Government approved the plant on the basis that it would return a profit of about £216m over its lifetime, that figure did not take into account the £500m construction costs.

The plant was dealt a further blow in 1999, when The Independent revealed that workers at Sellafield had falsified quality-control data on Mox fuel. Unsurprisingly, customers in Japan, the country that the Government believed would provide the bulk of orders for the fuel produced by its new plant, lost confidence. It left a gaping hole in the Mox plant's order book which has never been filled.

Since it opened in 2001, the plant's complex recycling procedure has also been dogged by breakdowns and on-going difficulties. At present, production problems are being experienced in making "fuel assemblies", the final stage of production in making the fuel. Despite the problems, the Government refused to acknowledge difficulties at the plant. Even after serious issues had emerged by 2004, it still argued that the economic and environmental case for the plant was as "strong as ever". Campaigners believe the final bill for the plant will be even higher by the time it is closed, because decommissioning the facility will also cost millions. "This is a staggering waste of taxpayers' money, and we doubt that these will be the full costs of this sorry saga," said Nathan Argent, head of Greenpeace's energy solutions unit.

"Just imagine what the renewable sector could have done with a subsidy like that. The spectacular failure of the Mox plant is just another reminder of why the nuclear industry has become notorious for making wildly misleading financial claims.

"For years, we urged the Government to treat the industry's predictions with the scepticism they deserved, but our pleas fell on deaf ears. Once again the same tired old lines about sparkling new equipment are wrapped in make-believe financial forecasts, and ministers are swallowing it hook, line and sinker."

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