Waste costs for UK new build

09 December 2011

Disposing of waste from new UK nuclear power plants will cost operators a maximum of 71p per MWh of power produced, less than 1% of the cost of delivered electricity.

 

UK leaders have been clear for several years that they wish to facilitate private companies in building new nuclear power plants, but not to subsidise the technology. A key aspect of this is fairness in paying for a single waste disposal facility to hold the new privately produced radioactive waste as well as similar wastes from the former national program and everything from research and weapons programs.

 

Yesterday, energy and climate change minister Chris Huhne announced to parliament a framework for this, including a charging mechanism meant to give cost certainty for new plant builders and protect taxpayers at the same time. It came after a consultation that ran from October 2010 to March this year.

 

The framework is complex, but at its core is an estimate of the expected cost of the required geologic disposal facility. At present this is highly speculative - without a site or design firmly in mind - and so this will be revised every five years until the facility comes into operation in 15-30 years.

 

From the start of generation, operators of new nuclear power plants will be required to set aside enough money to meet this expected cost. A cap has also been set, giving operators certainty of the maximum that they would pay, and this is set at about three times the current estimate.

 

However, the government is responsibile for building the disposal site and wants to cover the risk it is taking that costs could escalate further. For that reason it will add on certain risk premiums set so that the UK taxpayer would not lose out unless the cost of building the disposal facility grew by over five times the current estimate.

 

What this boils down to is a charge per unit of electricity generated. An operator can expect to pay £0.20 ($0.31) per MWh if the facility is built to current cost estimates with a cap of £0.71 ($1.11) per MWh. These compare to current prices of electricity for a large industrial user of about £83 ($130) per MWh.

 

The UK government said its objective "is to ensure the safe disposal of intermediate level waste and spent fuel from new nuclear power stations without cost to the taxpayer and to facilitate investment through providing cost certainty." It added that it "is not seeking to make profits over and above a level consistent with being compensated for the level of risk assumed, but does expect operators to meet their full share of waste disposal costs."

  

Researched and written
by World Nuclear News