Guidance on UK waste

25 February 2008

The UK's nuclear revival has taken a small step forward with the publication of draft guidance on how companies could assure government of financial arrangements for waste management.

 

Waste_silo_ILW 
How intermediate-level radioactive waste
is stored in Sweden (Image: SKB)

It sets out the detail involved in implementing the energy bill of 10 January, assuming no reprocessing of used nuclear fuel and only a 40-year operating life for power plants.
 
Business and enterprise minister John Hutton said that nuclear power operators in the UK's new industry would have to set money aside for plant dismantling and waste management "by law" and from "day one". This will then make the UK consistent with normal practice in the nuclear industry elsewhere.  

At several stages of its 53-year history the operators of Britain’s civil nuclear power plants have in fact done this, at levels up to about 0.4 p/kWh just for used fuel alone. However, inconsistency of government policy has meant that these future funds have been sucked into general state revenue and disappeared, leaving a very large bill for today's and tomorrow's taxpayers. In fact Britain’s long-term lack of strong policy on radioactive waste management is unique in the Western world.

 

The draft guidelines say that companies building new nuclear power stations would have to:

  • "Demonstrate detailed and costed plans for decommissioning, waste management and disposal, before they even begin construction of a nuclear power station."
  • "Set money aside into a secure and Independent Fund from day one of generating electricity."
  • "Have additional security in place to supplement the fund should it be insufficient, for example if the power station closes early."

The key issue is then how much per kilowatt hour of electricity needs to be set aside. This will be addressed by the new Nuclear Liabilities Financing Assurance Board, to be set up in 2008 to advise the government in relation to each proposal. It will have a strong actuarial function. 


The draft guidance document shows that the government expects to set a "fixed unit price for disposal of intermediate-level wastes and spent fuel," which "will include a significant risk premium" and escalate with inflation. The government will then take title to the wastes and accept liability for disposing of them.

Mid-2009 is given as the earliest date that generic fixed unit price figures for intermediate- and high-level wastes will be available to aspiring operators. Final figures will then be negotiated in the light of specific proposals. Operators will need to make their own arrangements regarding disposal of low-level operational wastes, and fund that as they go along.

All other waste and decommissioning costs will be met from the Independent Fund set up by each operator for each plant. The fixed unit price will be paid into each fund and form part of its corpus alongside other provisions.

Hutton emphasised that companies will be expected to meet the full costs of wastes and decommissioning: "Funds will be sufficient, secure and independent" - hopefully of government purloining as well as corporate diversion.

The timeline for likely nuclear power development shows eight years for preparation and planning (with unchanged regulatory regime), then six years for construction. The government expects the first application to build a new nuclear power reactor to be made in mid-2009.

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