RISK AND REWARD | DECOMMISSIONING
Left:
Hinkley Point is another of the UK’s AGR sites Photo credit: jgolby/
Shutterstock.com
agreements with EDF Energy and has other roles and responsibilities, such as being the NDA’s ‘sponsoring department’ and working in new nuclear. “The centre of government has yet to put in place arrangements that can provide assurance that the Department is discharging its various responsibilities appropriately and that the decommissioning programme is performing effectively,” said PAC.
Fund failing Looking at the funding strategy for decommissioning, the PAC said the government had achieved poor returns in its investments for the Fund, requiring the taxpayer to top it up. While the funds have made minimal returns, decommissioning costs have almost doubled since March 2004 to an estimated £23.5bn ($28bn) in March 2021, and they could rise still further. Most of the existing fund was invested in the National
Loans Fund – as required by government – which achieved a very low return, unlike the 20% of the fund that was invested in private sector assets (which generated average
annual returns of 6.2%/year in the three years to 2020-21). For seven years the Fund has failed to meet the target return judged necessary to meet the expected costs of decommissioning. The taxpayer had to provide a £5.1bn ($6bn) top-up in 2021 and another £5.6bn ($6.7bn) in 2022 (via HM Treasury). “There remains a strong likelihood that more
taxpayers’ money will be required” to meet the costs of decommissioning the AGRs, the PAC says. The performance of the fund has implications for
nuclear new-build too because the UK’s regime requires nuclear operators to build up a ring-fenced fund that will eventually pay for decommissioning. This mechanism aims to defuse an ongoing objection to new nuclear over the potential for high and unquantified costs to decommission reactors and to provide certainty for nuclear investors and taxpayers. But the PAC was not convinced: after its investigation it asked BEIS to report back on what decommissioning improvements have been built into Hinkley Point C and what proposals there are for small modular reactors. ■
Below: Torness turbine hall Photo credit: EDF Energy
www.neimagazine.com | August 2022 | 33
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45
