UK consults on conservative waste framework
08 December 2010
Reiterating its policy of no subsidy for new nuclear, the UK government yesterday released draft consultation documents on how operators can expect to pay for waste and decommissioning.
The consultations are the latest of the UK's preparations for the construction and operation of new nuclear plants. Recent consultations have already determined much of the framework for waste and decommissioning charges and the purpose of the current consultations is primarily to address the details.
Charges capped high
Under the waste framework developed recently, operators can expect to pay a 'waste transfer price' when they relinquish ownership of waste to the government, which is the body ultimately responsible for final disposal. In the modified provisions just published as part of the consultation on an updated waste transfer pricing methodology for the disposal of higher activity waste from new nuclear power stations, the maximum possible price will be capped so as to provide operators with a level of certainty and to encourage adequate investment into new plant.
This cap will be set at a high level in order to protect the UK taxpayer from the risk of accidentally subsidising the cost of new nuclear. Acknowledging its conservative nature, the UK government set the cap at a rate some three times higher than the current best estimates for the actual cost of waste disposal.
The waste transfer price also includes a contribution to the fixed costs of an underground permanent disposal site, known as a geological disposal facility, which the government remains committed to building regardless of whether or not new plants go ahead. As well as new waste from power generation, this facility would also house all the UK's wastes from nuclear weapons development and maintenance as well as from the national program to develop nuclear power from the 1950s onwards.
The cap represents the upper boundary of what operators will pay for waste; the actual final price is unlikely to be decided before a plan for a site-specific geological disposal facility is finalised so that the real costs can be better known. The deadline for making the final price determination is 30 years after the start of generation, though operators may request a final price earlier if they wish, though this will likely be set at the level of the cap. The proposed final price also contains a separate 'risk fee', which government will charge to compensate for the fact that it believes that there can be no absolute guarantee that the operator's final waste liabilities will not exceed the cap.
Given its say over matters relating to final disposal, the government acknowledges that it is heavily responsible for influencing the costs of disposal and therefore is best placed to handle the long term risks. Accordingly, a further revised proposal is for early transfer of waste from industry to government following decommissioning. Operators will need to make a further lump sum payment to cover additional costs, but the government is confident that it can determine this fee accurately.
Decommissioning
The framework for operator liabilities when the time comes to dismantle and decommission a power plant was largely determined during a consultation process launched March 2008. The purpose of the just-initiated consultation on revised funded decommissioning program guidance for new nuclear power stations is to seek wider input on comments that the consortia wishing to undertake new build have made as a result of preparing their own funded decommissioning programs. In the UK's new system, these programs are considered as part of the safety case of the power plant design at the time of applying for consent to construct a new plant.
The government's response to the March 2008 consultation has already been published. One notable amendment is that operators are now allowed to become minority owners of the funds set up for plant decommissioning, though these must continue to be otherwise free from operator control.
Another revised proposal allows for the possible return of surplus assets to an operator, if it is determined that the fund goes above its target value, and that it is otherwise prudent to do so. One more introduces flexibility into the base case of the decommissioning and waste management plan guidance, allowing operators to argue the case for realistic alternatives - such as a plant lifetime exceeding 40 years. In fact the design lifetimes of designs being considered in the UK is 60 years, meaning that full decommissioning funds should have accrued far earlier than they are actually needed.
Researched and written
by World Nuclear News