Double threat to future of Sellafield

New crises at Sellafield are posing a fresh threat to its future, The Independent on Sunday can reveal. Its two newest and most controversial processes are in deep trouble, and ministers are planning to build two new reactors that undermine its raison d'être.

In the first part of an ominous double whammy, British Nuclear Fuels Ltd, which runs the Cumbrian nuclear complex, last week admitted that it will be at least a year late in completing its first order for plutonium fuel from a new plant – a delay that it has previously warned would jeopardise its viability.

In the second, key customers of its much-criticised Thorp reprocessing plant are threatening to boycott it in retaliation against an attempt by BNFL to raise prices.

The two crises strike at the heart of the Sellafield's main function. It takes highly radioactive used nuclear fuel from atomic power stations in Britain and overseas and "reprocesses" it to separate out plutonium and uranium, which are supposed to be used again in reactors.

The problem is that there is no need for it, as the world is awash with plutonium and uranium: Britain already has a vast plutonium stockpile, which is causing increasing concern as a potential target for terrorists. Fifteen months ago BNFL opened a new plant to produce mixed oxide (Mox) fuel, which combines the two elements, but it is expensive and the company has struggled to find customers.

Meanwhile, the cost of reprocessing was a key factor in the collapse of British Energy and is credited by ministers with helping to kill nuclear power, which was omitted from last week's Energy White Paper. And even before the latest developments, the economics of both reprocessing and the Mox fuel plant were shaky. BNFL persuaded the Government to allow it to open the Mox plant in December 2001, despite opposition from British critics and the Irish government, by arguing that "any significant delay" on completing its first order for nuclear reactors in Switzerland – due to be finished by this spring – would "seriously prejudice" its operation.

It now admits that the order will not be ready until spring 2004 because it has taken longer than expected to get the plant fully operational. The Swiss customer is reluctantly prepared to accept this, but BNFL had previously argued that such a delay would have a knock-on effect on further orders, costing it "several tens of millions of pounds".

In the second crisis, German nuclear companies – which make up BNFL's largest European customer for reprocessing – are threatening to withdraw their business in the face of demands for a price rise. The British firm is demanding cost-escalating "adjustments" to their contracts to ease the economic difficulties of its Thorp plant.

BNFL has refused to discuss the crisis, saying that the issue was "confidential" and that it would not "conduct negotiations through the press".

Now, in a final irony, ministers are planning to build two new reactors at Sellafield at a cost of £1.8bn, to burn up unsold Mox. This would be justified on "environmental grounds" to eliminate the growing plutonium stockpile.

So, in an extraordinary state of affairs, used fuel would be entering Sellafield at one end of the complex and be reprocessed to extract plutonium and uranium. These would be made into fuel in the Mox plant. This would then be taken to the new reactors to be turned into spent fuel again, completing the circle.

Martin Forwood, campaign co-ordinator for Cumbrians Opposed to a Radioactive Environment, said yesterday: "This would be the final act in a long-running farce. As its business collapses Sellafield is ending up swallowing its own tail at the cost of billions of pounds to the taxpayer. The Government must now put an end to the whole ludicrous affair and put reprocessing, and Britain, out of its misery."