Source · Select Committees · Public Accounts Committee
Recommendation 17
17
The Department emphasised that it was applying significant learning from the experience of decommissioning the...
Conclusion
The Department emphasised that it was applying significant learning from the experience of decommissioning the Magnox and AGR stations. For new nuclear stations a funded decommissioning plan has to be in place before construction begins. The Department told us that it was “building from the start with decommissioning in mind” and that this should mean that when the new nuclear stations cease operation there will be sufficient funds in place to carry out decommissioning.28 It also explained that new legislation also included provisions to enable provider contributions to be adjusted during the life of assets. The Department also expected that new technologies would mean that the proportion of whole-life costs accounted for by decommissioning would reduce for the new generation of nuclear reactors.29 25 Qq 59, 60; C&AG’s Report paras 1.9, 2.3 26 Q 5; C&AG’s report para 2.2 27 Qq 60–61 28 Q 29 29 Qq 29, 64 14 The future of the Advanced Gas-cooled Reactors 2 Defueling and decommissioning the AGR stations Impact of closures on generating capacity
Government Response
Not Addressed
HM Government
Not Addressed
3: PAC conclusion: The terms of the 2009 sale of the nuclear stations agreed by the Department with EDFE placed a disproportionate amount of risk for meeting future decommissioning costs on the taxpayer. 3: PAC recommendation: As proposals for building new nuclear stations are firmed up, the Department needs to learn lessons from AGR decommissioning for how the decommissioning of new nuclear stations will be funded, for example linking contributions more closely to reliable estimates of liabilities, and building in mechanisms for adjusting contributions from operators should estimates of liabilities increase. 3.1 The department agrees with the Committee’s recommendation and will respond by August 2022. Target implementation date: August 2022 3.2 The funded decommissioning plan (FDP) policies in place to support the development of new nuclear stations already build upon what was learnt from the AGR stations. 3.3 The Energy Act 2008 requires prospective operators of new nuclear power stations to have a Funded Decommissioning Programme (FDP) approved by the Secretary of State before nuclear-related construction can begin. The FDP is submitted by prospective nuclear power station operators to the BEIS Secretary of State, who must approve it before nuclear- related construction can begin. The FDP is intended to ensure that operators regularly put funding aside throughout the operating life of the plant in order to meet the future cost of decommissioning. 3.4 The specific design of the FDP arrangement is flexible and up to the operator, but it must meet the requirements as set out in the Energy Act 2008 and is expected to follow BEIS guidance (published in 2011) and methodology for determining the cost of nuclear waste management. The HPC FDP also includes a rachet that allows contributions to be increased as the liability estimate changes. 3.5 The FDP arrangements provide for periodic reviews of sufficiency and for the possibility of operator contributions to increase as required.