Nuclear companies must fund clean-up

Prospective bidders for the UK's new generation of nuclear power stations will be required to set up a clean-up fund, the government has announced.

Addressing fears that tax payers may have to pay decommission costs if firms go bust, the government insists the funds must cover the entire cost of eventual decommissioning, including overruns, and will have to be in place before any construction commences.

Companies would be required to:

• Demonstrate detailed and costed plans for decommissioning, waste management and disposal, before they even begin construction of a nuclear power station;

• Set money aside into a secure and independent fund from day one of generating electricity; and

• Have additional security in place to supplement the fund should it be insufficient, for example, if the power station closes early.

"It is in the national interest that we take every step to ensure that the taxpayer is protected from the clean up costs down the line," said Business Secretary, John Hutton. "The Energy Bill and the guidance…make clear that companies are liable by law to meet their full costs. Let me be clear -- full means full. Funds will be sufficient, secure and independent; it will be a criminal offence not to comply with the approved arrangements."

The costs appear unlikely to deter powerhouses such as EDF, RWE and E.ON who are all believed to interested in building the next wave of UK nuclear power.

Tearing down old nuclear facilities is currently the responsibility of the Nuclear Decommission Authority (NDA), which is responsible for taking out of service 20 facilities around the UK. This includes wastes and spent fuels created between the 1940s and 1960s, and the nuclear power stations created between 1950s and 1970s. Its 2007/8 budget, part-funded by the taxpayer, is £2.8 billion and this is divided between competing private contractors. The cost of bringing all facilities back to near-green field status is estimated to be £73 billion.

A recent spat between the Environment Agency (EA) and the NDA highlighted that the NDA may not be sufficiently funded to clean up Britain's nuclear legacy. The EA is critical that the NDA is concentrating its resources on decommissioning the highly toxic Sellafield site and does not have the funds to decommission Magnox power plants.

On the NDA website, there is an admission that: "The nature of the decommissioning process means these facilities can't simply be switched off and knocked down. In fact, the technical, environmental and managerial challenges are considerable. Many sites and facilities were not designed with eventual decommissioning in mind."

Decommissioning should have been the responsibility of the private sector organisations that have profited from their operations. However, the UK nuclear industry failed spectacularly when the government had to bail out British Energy, the company operating the majority of UK facilities, in 2004 with a £3 billion cash injection. This is in addition to the decommission costs currently being levied on taxpayers.

Britain has 10 power stations with 19 nuclear reactors, which generate around 18 per cent of the nation's electricity. A third of these will be decommissioned within 20 years and all will have closed by 2035. The government announced in January that it will support up to 10 new plants by 2020.

To meet the demand for nuclear skills, the University of Manchester last week set up a Centre for Nuclear Energy Technology. Cogent, the industry body responsible for forecasting nuclear skills demand, says there are currently 50,000 people directly employed by the nuclear industry in the UK, but that more than 9,000 graduates may be needed over the next 10 years, and up to 4,500 other skilled workers for jobs such as mechanical work and essential checking.

Photo: British Energy Group plc

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