Integrated financing schemes

INTEGRATED FINANCING SCHEMES

Due to the great interdependences between decommissioning, storage, and disposal, an integrated, external, segregated, and restricted (“ringfenced”) fund seems to be the most suitable approach to finance the future costs for these processes.285 Integrated funding means the scope of the fund covers decommissioning and waste management. Countries with an integrated funding system include Sweden, Switzerland, and the UK (but only for the operational EDF Energy reactors).

In Sweden, the contributions (from a fee on the electricity price) to the Nuclear Waste Fund are based on cost estimations done by SKB, the utility-owned Swedish Nuclear Fuel and Waste Management Company, and reviewed by SSM, the Swedish Radiation Safety Authority. The cost estimates are based on detailed surveys and decommissioning plans interlinked to the openings of the disposal facilities. These surveys also include the planned decommissioning actions, including the planned timing and the sequence of actions, and the related costs in detail. A working group comprising members of the SKB, from the operators, and experts from the providers of technological systems of the facilities undertake these surveys. These publicly available decommissioning plans additionally increase transparency.

For the operational reactors of EDF Energy, the UK government introduced the Nuclear Liabilities Fund in 1996 with the only function of funding the costs stemming from waste management and decommissioning. The fund is fed from two sources: a small quarterly payment by EDF Energy and the return on investments from the fund. If EDF Energy wants to receive payments from the fund to meet liabilities, it can only be made by application to the NDA, which acts as an agent of the government. The NDA as the administrator of the Liabilities Management Agreements approves the NLF payments for decommissioning and waste management. However, the UK government can decide to transfer the decommissioning responsibility to the NDA at any point after the electricity generation at the power stations ends.286

The Swiss funding system is comparable to the Swedish (for example, cost estimates for specific nuclear reactors determine contributions to the fund), but Switzerland has created two funds: one to finance decommissioning and one to finance the disposal of waste. Operators of nuclear power plants have to pay fees to both funds, which are under the supervision of the Swiss Federal Council.287 But, as in most countries, the cost studies are not public and done by the a private company, in this case the same company as for the German decommissioning cost estimates (NIS).

Table 8 gives an overview of the integrated financing schemes for decommissioning and waste management. Information is given on who controls the funds (i.e. external, internal, segregated) and on the cost estimates for decommissioning. The data reveals that countries fall short of setting aside enough funds for the estimated costs that will occur. Sweden has set aside funds for decommissioning and waste management of so far only two thirds of the estimated costs, the UK less than half (for its operational reactors), and Switzerland not even a third.

285 Wealer, Hirschhausen, and Seidel 2019. 286 Neri et al. 2016. 287 Swissnuclear 2011, Cost Study 2011 (CS11) Overview Report.