SPECIAL REPORT | DECOMMISSIONING AGR arrangements
A new report from the UK’s National Audit Office examines whether the government’s arrangements for decommissioning Britain’s fleet of advanced-gas-cooled reactors offers value for money
The decommissioning of the AGR nuclear power stations, a 66-page report published by the National Audit Office (NAO) examines whether these arrangements will lead to better value for money. The NAO scrutinises public spending to help Parliament
hold government to account and improve public services. It says that while the arrangements could deliver savings, their success will ultimately depend on the relevant parties working collaboratively to overcome risks.
Timeline and process EDF Energy confirmed in September that three AGRs — Dungeness B, Hunterston B and Hinkley Point B — will start defueling operations from 2022. Hartlepool and Heysham 1 are expected to close in 2024 and Heysham 2 and Torness in 2028. “Each power station will be defueled as efficiently
Above: Hunterston B pile cap and fuelling machine Photo credit: EDF Energy
as possible and taken to a fuel-free state, before being transferred to the Nuclear Decommissioning Authority (NDA) for the next stages of decommissioning,” EDF said. Defueling involves removal of the used fuel and
THE UK HAS EIGHT SECOND generation nuclear power stations accounting for around 16% of total UK electricity generation in 2020. Seven of the eight stations are Advanced Gas-cooled Reactors (AGRs), the design of which built on that of the first generation of now closed Magnox reactors. Under current plans, all the AGR stations will have stopped generating electricity by 2028. Decommissioning is envisaged to take just over 100 years under current plans. The Nuclear Liabilities Fund (the Fund) was established
to meet the costs of decommissioning all seven AGRs plus a pressurised water reactor at Sizewell B, but significant additional taxpayer support has been required, and more is likely to be necessary. The UK government has provided a guarantee to underwrite the Fund if its assets are insufficient to meet the total costs of decommissioning. In 2020, government contributed £5.1 billion ($6.8bn) 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 (currently £23.5 billion). However, cost estimates have doubled in real terms since 2004/5. If this trend is maintained and investment growth is not sufficient, there is a risk that the taxpayer will have to make further contributions. Last year, the government entered into new
arrangements to decommission the seven AGR nuclear power plants, making EDF Energy responsible for defueling.
14 | March 2022 |
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radiological waste from the reactors, fuel ponds and stores and transport to Sellafield for processing and consolidated storage. This process is expected to take 3-10 years, according to the NAO report. EDF said the first station transfer from Hunterston B,
is due to take place in 2025/6. However, it presents “new demands on the ability of EDF Energy to increase its defueling capacity, and on Nuclear Transport Solutions and Sellafield Ltd to transport, dismantle and store the fuel,” the report states.
What are the financial arrangements? In June 2021, plant owner EDF Energy agreed to defuel the stations in an arrangement that the UK Department for Business, Energy & Industrial Strategy (BEIS) estimates could save the taxpayer around £1 billion. Ownership of the stations will transfer to the Nuclear Decommissioning Authority (NDA) once defueling is complete. NDA’s Magnox Ltd subsidiary will complete the decommissioning, which is likely to take several decades. A 2015 government review had highlighted concerns about the ability of the existing arrangements with EDF to incentivise efficient decommissioning of AGR stations. BEIS’s revised agreement with EDF provides the company with “greater clarity about its role, and a commercial incentive to accelerate defueling and transfer stations to Magnox Ltd,” the report notes. EDF could earn up to £100 million in bonuses or incur penalties up to £100 million, depending on its performance during defueling. NAO says the rate at which stations can be defueled will
affect overall costs, which could be anywhere from £3.1 billion to £8 billion. A bottleneck between EDF removing fuel
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