Announcement

New nuclear clean-up proposals avoid public subsidy

Guidance sets out requirements for new nuclear clean-up funds Waste disposal charging method provides certainty but no subsidy…

  • Guidance sets out requirements for new nuclear clean-up funds
    • Waste disposal charging method provides certainty but no subsidy

The Government today published proposals on how operators of new nuclear power stations will have to make secure financial provision for decommissioning without recourse to the taxpayer, in line with the Government’s policy that there should be no subsidy for new nuclear.

New nuclear operators will be required by law to put money aside from day one to pay for the eventual decommissioning costs and their full share of waste disposal. This is in line with the coalition commitment that new nuclear can proceed provided there is no specific subsidy.

The consultation on draft Funded Decommissioning Programme Guidance sets out how operators will be required to meet their obligation to have robust decommissioning plans and secure funds in place before constructing a new power station.

Also published today is the consultation on a Waste Transfer Pricing Methodology. The Government intends to ensure the safe disposal of radioactive waste from new nuclear power stations without cost to the taxpayer, while facilitating investment through providing operators with the cost certainty they need to be able to invest.

The consultation sets out how a price will be determined for the disposal of new build higher activity waste in the planned Geological Disposal Facility, the Government’s preferred solution for dealing with legacy waste regardless of any new nuclear build.

The consultation includes the proposal that the Government should set a cap on the waste transfer price, to provide operators with cost certainty. The cap will be set at a very high level - the consultation suggests three times current cost estimates. However the Government accepts that it is impossible to be certain that costs will not exceed the cap so, in return for setting the cap, the waste transfer price charged to new nuclear operators will include an additional ‘risk fee’ to compensate the Government for accepting this small residual risk.

Charles Hendry, Minister of State for Energy said:

“We are committed to making Britain the best place in the world to invest in low carbon energy. So it’s vital that we give new nuclear operators as much clarity about long term costs as possible. At the same time though we have to make sure that there is no hidden subsidy and that the taxpayer is protected from costs that are rightly the responsibility of the operator.

“Today we are asking for views on our proposals to ensure that operators have robust decommissioning programmes in place and how to make sure costs are covered long after any new plants are closed”.

Alongside this, the Department has today published a consultation on the Strategy for the Management of Solid Low Level Radioactive Waste from the Non-Nuclear Industry in the United Kingdom.

This strategy will provide greater clarity to radioactive waste managers, the environmental regulators, waste planning bodies and operators of all waste disposal facilities over the importance of adequate disposal arrangements. It will demonstrate the need for the continued availability of existing radioactive waste disposal facilities and the creation of new facilities.


Notes for editors

  1. The consultations are available to view on the DECC website at: http://www.decc.gov.uk/en/content/cms/consultations/rev_fdp_guide/rev_fdp_guide.aspx and http://www.decc.gov.uk/en/content/cms/consultations/waste_trans/waste_trans.aspx
  2. The Secretary of State reconfirmed the Government’s policy that there will be no public subsidy for new nuclear power in a Written Statement to Parliament on 18 October 2010 - http://www.decc.gov.uk/en/content/cms/news/en_statement/en_statement.aspx
  3. The UK has a legacy of higher activity radioactive waste and the Geological Disposal Implementation Board (GDIB) has been established to enhance Ministerial oversight of the implementation of geological disposal as a solution for dealing with that waste as well as equivalent waste from new nuclear power stations. It will enable local communities, the Committee on Radioactive Waste Management (CoRWM), key waste consignors, regulators and others to provide direct input to the programme. The first meeting of the Board took place last week.
  4. The consultation on low-level radioactive waste from the non-nuclear sector is available at http://www.decc.gov.uk/en/content/cms/consultations/nni_llw/nni_llw.aspx
  5. Non-nuclear waste refers to organisations producing radioactive waste but which are not on part of the nuclear industry. It includes hospitals, the pharmaceutical sector, research and education establishments, all of which depend on the use of radioactive materials to conduct their business. The non-nuclear industry also includes those businesses that produce radioactive waste as a by-product of processing material containing natural radioactivity (principally, the oil and gas industries).

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