When will the new nuclear operators be required to put money aside for decommissioning?

4 May 26
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New nuclear operators are required by law to set aside funds for decommissioning and waste disposal from the very first day of a plant’s operation . Under the legal framework established by the government, energy firms must have a robust, funded decommissioning plan (FDP) in place and approved by the Secretary of State before they are even granted permission to begin construction on a new power station

Key Funding Requirements

The regulations are designed to ensure that the financial risk of cleaning up nuclear sites remains with the developers rather than the taxpayer. According to the government’s Funded Decommissioning Programme Guidance:

Insolvency-Proof Funds: Operators must establish funds for clean-up that are administered independently of both the operator and the government to ensure they remain protected even if the company faces financial difficulties .
Full Cost Responsibility: Operators are responsible for the full costs of decommissioning and their share of waste disposal. Energy Secretary Charles Hendry stated that requiring a credible funding plan “is the best way to protect taxpayers from having to pick up the bill” .
Waste Transfer Pricing: To provide cost certainty for investors, the government proposed a cap on the waste transfer price for disposing of higher-activity waste in a Geological Disposal Facility (GDF). This cap was suggested to be set at a high level—roughly three times current cost estimates—with an additional risk fee charged to operators to compensate the government for accepting any residual risk .

Evolving Models: The Sizewell C Precedent

While the standard requirement involves operators building up independent funds, the government has introduced a new financial model for the Sizewell C project. As detailed in the written ministerial statement Sizewell C | Public on the hook for decommissioning costs of up to £12bn, this project utilises a Regulated Asset Base (RAB) model:

Consumer Funding: Decommissioning for Sizewell C will be funded via the RAB, which can include additional costs on consumer electricity bills .
Contingent Liabilities: While the RAB includes protections to minimise public risk, the government has acknowledged a potential exposure of up to £12bn in “remote circumstances” where a fund shortfall materialises .
Timeline: For modern plants like Sizewell C, decommissioning is expected to be a long-term process, potentially beginning toward the end of the 21st century and continuing until 2160

The government continues to update these roadmaps to ensure they remain suitable for new technologies, such as Small Modular Reactors (SMRs), while protecting future generations from bearing legacy costs .

You may be interested in learning more about the estimated total cost of the UK’s nuclear cleanup mission, the progress of the Geological Disposal Facility, or how the Regulated Asset Base model impacts consumer energy bills.