The government today outlined how operators of new nuclear power stations will have to secure funding for decommissioning without dipping into the public purse.
New nuclear without public subsidy has been the coalition’s energy mantra since coming to power, but the issue of decommissioninghas often been seen as the true test of the plan.
Today, the government said that 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.
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, which outlines how radioactive waste will be disposed of without public funding.
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.
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.
Energy Minister Charles Hendry today said: “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”.