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Government unveils plans to place financial risk of nuclear decommissioning on developers

The government today revealed plans to place responsibility for decommissioning on operators of new nuclear power stations, which are in line with the government’s policy that there should be no subsidy for new nuclear, it said.

New nuclear operators will be required by law to put money aside from day one to pay for the eventual decommissioning costs and their full share of waste disposal.

The proposals are revealed in the draft consultation on Funded Decommissioning Programme Guidance, published by the government today. This sets out how operators will be required to meet their obligation to have robust decommissioning plans and secure funds in place before constructing a new power station.

Also published today is the consultation on a Waste Transfer Pricing Methodology to ensure safe disposal of radioactive waste from new nuclear power stations without cost to the taxpayer, while attempting to encourage developers by creating the cost certainty they need to be able to invest. 

The consultation sets out how a price will be determined for the disposal of new build higher activity waste in the planned Geological Disposal Facility, the government’s preferred solution for dealing with legacy waste regardless of any new nuclear build. 

The consultation includes the proposal that the government should set a cap on the waste transfer price, to provide operators with cost certainty. The cap will be set at a very high level – the consultation suggests three times current cost estimates. However, the government said it accepts that it is impossible to be certain that costs will not exceed the cap so, in return for setting the cap, the waste transfer price charged to new nuclear operators will include an additional risk fee to compensate the government for accepting what it called “this small residual risk”.

“It’s vital that we give new nuclear operators as much clarity about long term costs as possible,” said energy secretary Charles Hendry. “At the same time though we have to make sure that there is no hidden subsidy and that the taxpayer is protected from costs that are rightly the responsibility of the operator.

Alongside this, the Department has today published a consultation on the Strategy for the Management of Solid Low Level Radioactive Waste from the Non-Nuclear Industry in the United Kingdom.

This strategy will provide greater clarity to radioactive waste managers, the environmental regulators, waste planning bodies and operators of all waste disposal facilities over the importance of adequate disposal arrangements. It will demonstrate the need for the continued availability of existing radioactive waste disposal facilities and the creation of new facilities.

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