New nuclear decommissioning costs

Energy Secretary Edward Davey said policies to ensure new nuclear operators cover their waste and decommissioning costs will mean that future generations do not pay the price for nuclear electricity used decades before they were even born.

This came as the Government published a report by Professor Gordon MacKerron of SPRU (Science and Technology Policy Research), University of Sussex, into the history of managing nuclear wastes and decommissioning.

The report said:

  • Delays by governments and public bodies in tackling nuclear liabilities led to a progressive escalation of costs and deterioration in facilities, which has only begun to be addressed in recent years. The problem was compounded by the military and research origins of the nuclear industry.
  • Government has learned important lessons from this history: in the creation and funding of the Nuclear Decommissioning Authority to deal with the legacy, the Nuclear Liabilities Fund for the reactors run by British Energy and in the legal framework that has been put in place for liabilities resulting from any new nuclear build.
  • The military origins of the post-war UK nuclear industry led to the early civilian nuclear programme of gas-cooled reactors, which are inherently more complex and expensive to decommission than light water reactors.  The choice of second generation advanced gas-cooled reactors, made on the basis of conflicted advice, compounded the effects, and the commitment to reprocessing spent fuel added further to costs.
  • Little or no thought was given to decommissioning facilities at end of life. The organisations which owned them had other objectives, either the pursuit of research into new nuclear technologies or the pursuit of profitability. Although the prospect of electricity privatisation in the late 1980s focused attention on the costs of the legacy, the opportunity was not taken to address it properly.
  • The 2002 White Paper which led to the creation of the Nuclear Decommissioning Authority (NDA) marked a turning point. Government is now committed to long term planning to deal with the nuclear legacy and has put in place  structures to do so that are clearly superior to those that came before.
  • Spending on nuclear decommissioning, which is ring-fenced within DECC’s budget has increased significantly and spending on the highest priorities is protected.

Commenting on the report, Mr Davey said: “Professor MacKerron’s report is a valuable contribution to an important debate.  It paints a warts and all picture of the UK’s nuclear history, and explains why we have such a difficult legacy of old facilities and waste to manage.

“It also shows that in the last few years, government and industry has been getting their house in order. The Coalition has made cleaning up and decommissioning the nuclear legacy a priority– even at a time when it faces difficult spending decisions.

“It’s hard to imagine a starker salutary lesson. The public purse is now picking up the tab for previous mistakes. This kind of short-sightedness cannot and will not be allowed to happen again. We will not place a costly new millstone around the neck of future generations.

“The coalition wants to see new nuclear power come forward as part of a balanced energy mix.  It is secure, low carbon and will support thousands of jobs in construction and operation.  But there will be no subsidy, operators will be required to put money aside from day one to meet future clean up and waste costs and we intend to substantially increase operators’ third party liabilities.” 

Professor Gordon MacKerron said: “The history of managing and funding our nuclear legacy has, until very recently, been dire.  Funds collected from consumers for decommissioning and waste management were diverted to other ends.  And for decades minimal attention was paid to deteriorating nuclear facilities – and the cost of remediating them is consequently now much higher, probably by several billion pounds, than it would have been had serious work started up to two decades ago.  Continuing commitment to separating plutonium from spent fuel, long after any economic justification had ceased, compounded the problem. 

“The establishment of the NDA in 2005 was a substantial step forward – for the first time a single body focussed entirely on managing the nuclear legacy.  Unsurprisingly this has led to the discovery that the (discounted) costs of managing our nuclear liabilities will be over £20 bn. more as at 2011 than expected in 2005.  And there are indications that, when affordable, speeding up the work of remediation may offer good value for money. Government has learned lessons from history and the funding regimes for the UK’s current reactors, as well as any future reactors, are much more robust.”

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