Power Engineering - Industry will foot bill for UK nuclear waste says London

20 August 2007 - The private sector would foot the entire bill for the decommissioning and waste disposal costs of any new nuclear power station in the United Kingdom, according to the energy minister.

In a Financial Times interview, Malcolm Wicks said that his forthcoming energy bill is expected to set out how industry would be required to pour hundreds of millions of pounds into a funding pot for disposing of radioactive waste from the new plants. Construction and operation of power stations will also be paid for by private operators.

Mr Wicks confirmed that the most likely locations for the new plants would be on existing reactor sites where local communities were "supportive" of nuclear power. "If one was an investor, you can see the attractions of that," he said, citing Sellafield in Cumbria as an example.

There was "a lot of interest" from the private sector, with a number of companies wanting to build plants. At least six companies had signalled their interest including EDF Energy, E.ON and RWE NPower.

The energy bill, which could be published this autumn, would put in place a "state framework" requiring operators to make regular contributions to the huge cost of disposal. The scheme would be designed to protect the taxpayer from liabilities should unforeseen costs, such as an operator collapsing, arise later.

Ministers have already ruled out economic subsidies or tax breaks to stimulate investment. "The starting principle is that if we go for nuclear, the private sector have to pay for it, and that includes this area of nuclear waste," said Mr Wicks.

The government had backed plans for burial of radioactive waste from existing reactors deep underground. The repository would take waste from new plants too but the financing for this had yet to be resolved. "How we achieve that is what we're working on at the moment, but it is not sensible to think of them [the operators] being asked to write a cheque in 50 years' time," Mr Wicks said. "There has to be some ongoing arrangement."

A number of options were being considered, including requiring operators to make payments to a government-controlled fund or direct to the Treasury. Money could alternatively be paid into independent funds that would be shielded from claims by creditors. In the US, the utilities pay a levy into the government's nuclear waste fund to cover the costs of disposal.

Like the UK, the US is still evaluating a plan for a new national depository at Yucca Mountain in Nevada. France has a similar levy set aside by EDF, the state-controlled electricity company that runs the country's nuclear power plants.
Gordon Brown, the prime minister, plans to make a final, formal decision by the end of the year on whether to clear the way for a fresh wave of private investment in nuclear energy.
After a court ruling earlier this year ordering the government to consult again on its plans, more than 1000 people are to be canvassed next month in a nationwide polling exercise designed to gauge public support for new plants.

Mr Wicks said it was not inconceivable the government might reverse its view that nuclear power should remain part of the UK's energy mix, and disclosed that civil servants were doing preparatory work on alternative strategies should nuclear be rejected.

"If new evidence or new arguments came up that made us think again, then we would think again." However, Britain could not afford to become too dependent on foreign imports of natural gas for its energy needs. By 2020, the UK would be sourcing 80 per cent of its gas from overseas.

"We would be wise as a nation if we tried to build up what I would simply refer to as home-grown energy." Renewables such as wind, solar and tidal power were part of the answer. But the importance of energy security, more efficient energy use and tackling climate change were the reasons why ministers felt nuclear "could be part of the mix".

Three bills are likely to follow in the Queen's Speech. One will set up a planning commission to fast-track big infrastructure projects such as nuclear plants. A second will set goals for cutting carbon emissions. The third, the proposed energy bill, will tackle waste disposal.

The bill for disposing of the current stock of 470 000 cubic metres of nuclear waste will be paid by the government, which historically has been the owner of nuclear power plants, writes Fiona Harvey. It is likely to cost at least £10 bn ($19.82 bn) to build the deep bunker necessary.

The disposal cost will come on top of the £65 bn-plus bill, also to be paid by the taxpayer, for decommissioning the country's existing fleet of nuclear reactors, most of which are scheduled to shut by 2023.

If new nuclear plants are built, they will produce much less waste than has come from the current generation of nuclear power stations.

A fleet of 10 new reactors with a 60-year lifespan would add only 10 per cent by volume to the amount of existing waste.

The government's Committee on Radioactive Waste Management, which was set up to decide the future of nuclear waste disposal, concluded last year after a three-year examination of the options that the waste should be stored between 300 and 500 metres underground in stable geological formations in the long term.

But the government has still not decided on the sites for long-term storage. In the meantime, existing waste is being kept at interim storage facilities at about 500 sites around the country. It is likely to remain there for some time - it could take 30 years for a long-term storage site to be built.

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