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The escalating costs of decommissioning UK’s nuclear reactors pose a warning about new nuclear reactors.

The history of the AGR fleet provides lessons for other long-term programmes carrying significant end‑of‑life liabilities, including new nuclear energy programmes.

The government has entered into new arrangements to decommission seven AGR
nuclear power stations. While the arrangements could deliver savings, their
success will ultimately depend on the relevant parties working
collaboratively to overcome risks, according to the National Audit Office
(NAO).

The Nuclear Liabilities Fund (the Fund) was established to meet the
costs of decommissioning these eight stations, but significant additional
taxpayer support has been required with more likely to be necessary.

The UK government has provided a guarantee to underwrite the Fund in the event
that its assets are insufficient to meet the total costs of
decommissioning. In 2020, government contributed £5.1 billion to
strengthen the Fund’s position and the Fund has recently requested a
further £5.6 billion.

The Fund’s assets were valued at £14.8 billion at
the end of March 2021. The aim is that growth in the Fund’s investments
will be sufficient to meet the long-term costs of decommissioning (£23.5
billion).

However, cost estimates have doubled in real terms since 2004-05.
If this upward trend is maintained and investment growth is not sufficient,
there is a risk that the taxpayer will have to make further contributions.

In June 2021, the AGR stations’ owner EDF Energy (EDFE) agreed to defuel
each of the stations in an arrangement that the Department for Business
Energy & Industrial Strategy (the Department) estimates could save the
taxpayer around £1 billion. Once defueling is completed, ownership of the
stations will transfer to the government’s Nuclear Decommissioning
Authority (NDA) for its subsidiary Magnox Ltd to complete the rest of the
decommissioning process, which is likely to take several decades.

Initial ambitions that the existence of the Nuclear Liabilities Fund would help
eliminate taxpayers’ exposure are being tested, with rapid increases in
the estimates of decommissioning costs outstripping investment returns. The
history of the AGR fleet provides lessons for other long-term programmes
carrying significant end‑of‑life liabilities, including new nuclear
energy programmes.

 National Audit Office 28th Jan 2022

 https://www.nao.org.uk/report/the-decommissioning-of-the-agr-nuclear-power-stations/

January 29, 2022 - Posted by | business and costs, politics, UK

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