Recommendation 12

In 2015, the then Shareholder Executive, on behalf of the Department undertook a review of the arrangements with EDFE for decommissioning the AGR stations. It concluded that the existing agreements did not incentivise EDFE to look at more innovative or cost- effective ways to minimise decommissioning costs. Between late 2017 and June 2021, the Department negotiated new arrangements with EDFE which included a new incentive arrangement focused on defueling.18 Under the revised arrangements agreed between the Department and EDFE that govern the decommissioning of the AGR stations, the company can now earn a fee of up to £100 million for good performance, or it could lose up to £100 million for poor performance. Most of the financial incentive is devoted to incentivising accelerated defueling with the remainder for delivering a smooth transfer.19