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UK Taxpayer could be hit by nuclear waste bill for new reactors

Written By Krishna on Sunday, December 18, 2011 | 11:39 PM

Note: India and the UK signed a joint declaration on civil nuclear cooperation on February 11, 2010. Srikumar Banerjee, the then chairman, India's Atomic Energy Commission and British high commissioner Richard Stagg signed the declaration. The two countries had finalised the text of the declaration earlier this month during commerce minister Anand Sharma's visit to London for the UK-India joint economic trade committee meet. Pat McFadden, Britain's minister for business, innovation and skills was in India to promote civil nuclear technology. Will India ever a legislation to regulate nuclear waste?

Gopal Krishna
ToxicsWatch Alliance (TWA)

• Fears new disposal levy could underestimate cost
• Radioactive waste 'could be traded like commodity'

The nuclear industry could end up passing on to taxpayers the costs of disposing of waste from new reactors under government plans, according to official documents seen by the Guardian.

This is despite ministers' claims the industry would no longer receive any public subsidy – repeated today by energy secretary Chris Huhne as he unveiled the next step in the UK's new nuclear reactor programme.

The government has been consulting with nuclear operators about how they will pay their waste disposal costs. But the response by the Ministry of Defence, which has a fleet of nuclear-powered submarines so must also pay a disposal levy, said the proposals favoured private reactor companies and could encourage a "'someone else's problem' attitude".

The Nuclear Decommissioning Authority (NDA), the partially state-funded body responsible for cleaning up the UK's publically owned civil nuclear sites, also said the levy could underestimate the disposal costs, leaving the taxpayer to cover any shortfall. The NDA said such a levy could inadvertently lead to a "futures market" where nuclear reactor companies trade radioactive waste like a commodity.

Industry experts said that if the government underestimated the costs, companies could buy options to store the waste from planned reactors if they believed the disposal levy would increase in the future.

Highly radioactive waste from the UK's old reactors and nuclear weapons programmes is currently dotted around the country in interim storage facilities. The cost of disposing of this will be met by the taxpayer via the MoD and the NDA. The plan is to eventually build a £12bn underground repository to store this waste permanently. This repository could also house waste from new civil nuclear power stations.

The industry will only invest in new reactors if the government fixes a disposal levy to cover their contribution towards disposal in such a repository. The taxpayer will be liable for any shortfall if the actual costs exceed this levy decades from now.

Today, the government outlined how companies would have to pay for decommissioning costs but will not announce how they will contribute towards a new repository until later this autumn.

Jean McSorley, a Greenpeace consultant, said: "The NDA's document reveals there is a substantial risk of underestimating the cost of disposing of waste from new reactors. Any shortfall would have to be paid by the taxpayer, resulting in a significant subsidy to the nuclear industry. The government has to stick to its promise of no more subsidies for new reactors and must act to close any loopholes in the proposed funding arrangements."

The "fixed unit price" (FUP) levy proposed by the government charges operators on the amount of electricity they generate, rather than the volume of waste they produce. The MoD's submission said this would favour reactor companies which typically produce more waste for the electricity they generate than the UK's fleet of nuclear-powered submarines. "The current proposal aimed at removing uncertainty could encourage perverse behaviour, poor technical choices, short-term thinking and a 'someone else's problem' attitude," its submission said.

The NDA said its response to the consultation on the disposal levy was "very positive in tone" and supported the idea of delaying the setting of the FUP until more was known about the future costs. "It is in this context that our author raised the possibility of operators being given an 'asset' if, over time, the FUP turns out to be an underestimate. This is not a scenario we believe to be likely."

A government spokesman said: "We are keen to ensure that operators of new nuclear power stations meet in full their waste management, waste disposal and decommissioning costs."

Tim Webb

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