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Decommissioning of the AGR nuclear power stations: National Audit Office UK

The decommissioning of the AGR nuclear power stations, National Audit Office 

Published	January 28, 2022
Full report	The decommissioning of the AGR nuclear power stations

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 UK has eight second generation nuclear power stations, accounting for around 16% of UK electricity generation in 2020. Seven of the eight stations are Advanced Gas-cooled Reactors (AGRs), which are all due to stop generating electricity by 2028.

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.2 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.

The rate at which stations can be defueled will impact on overall costs. The estimated cost of defueling could be between £3.1 billion and £8.0 billion. A bottleneck at any point between EDFE removing fuel, and the NDA transporting the fuel to safely store at Sellafield, could have repercussions across the programme. The costs to be borne by the Fund are therefore dependent on how quickly defueling begins once a station stops generating electricity, as well as the rate of defueling. Early unexpected closures of stations may increase costs……………………

“Government needs to maintain a clear view of how the nuclear decommissioning programme is performing as a whole, and given the large amounts of public money at stake it must act decisively should performance begin to lag.”

Gareth Davies, head of the NAO………………

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk        https://www.nao.org.uk/press-release/the-decommissioning-of-the-agr-nuclear-power-stations/

January 31, 2022 - Posted by Christina Macpherson | business and costs, UK