Energy firms in Britain will pick up much more of the cost of a nuclear accident under new rules agreed last week. Nuclear operators will now have to have seven times the amount of insurance than they have previously.
The Government confirmed it will increase the third party liabilities of operators in the event of a nuclear incident to €1.2billion (£750m). This is part of changes to the Paris and Brussels Conventions, the international treaty governing nuclear liability.
It follows events in Japan where the Japanese government has had to take on huge amount of the clean up cost for the Fukushima nuclear power plant disaster, helping the plant’s owner with nearly $9 billion (£5.6bn).
The UK’s nuclear trade body welcomed the news for creating more “certainty” for operators.
The Nuclear Industry Association said: “We fully support the decision to increase liability to €1200 million. The conclusion of this consultation serves to provide further certainty to the companies involved both in new nuclear build and the existing programme.”
French energy firm EDF Energy, which already operates nuclear reactors in the UK and has plans for several more, offered a similarly measured response.
“EDF Energy agrees with the need to reflect the changes to the conventions within the NIA in order to ensure a consistent model across signatory states, and as the Government pointed out these amendments impose a more stringent regime for operators than the current one,” said a statement.
“However, liability in the event of an incident is only part of the answer. We believe it is far more important to engineer out the risk of an incident than to simply insure against it.”
DECC echoed this, saying it has introduced “a robust framework to deal with the risks and considers the probability to be exceedingly small.”
Despite the “stringent” new insurance requirements, DECC acknowledges if an accident were to take place, €1.2 billion “would not be enough to cover it” and admits the Government has not estimated the cost to the public purse.