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UK 'still to notify EC on back-end nuclear waste management plan': DECC

Highlights

The UK's back-end nuclear waste management plans for new-build reactors have yet to be notified to the European Commission for State Aid clearance, the Department of Energy and Climate Change told Platts Wednesday.

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A notification relating to the Hinkley Investment Contract, ancillary agreements and state credit guarantee was submitted by the UK to the EC on October 22, 2013. It is this notification that the EC has decided to put through an in-depth State Aid investigation.

Meanwhile the UK government is preparing another notification to the EC of how it intends to share the costs for managing and disposing of nuclear waste from Hinkley Point C and other new nuclear power plants, DECC said.

"The nuclear waste transfer contract (which is wider than just Hinkley) is a separate notification [to the October Hinkley submission]," a DECC spokeswoman said in an emailed answer to questions. "This has not yet been submitted."


The EC's guideline for the duration of in-depth investigations is six to 18 months. If this second submission also proceeds to an in-depth investigation, EDF Energy's Hinkley Point C nuclear power project could be facing fresh regulatory delays.

Whether the EC would adopt a similarly tough line on the waste transfer contract as it is doing on the Hinkley Investment Contract "remains to be seen," said Norton Rose Fulbright competition lawyer Totis Kotsonis.

"It should be appreciated that there is an unspoken dimension to the current investigation, namely the political one, and much as the European Commission would need to focus its analysis on the strength of the legal arguments and available evidence in doing so it will be all too mindful of the political tensions that surround nuclear energy," he said.

The UK's nuclear waste transfer contract is to cover both spent fuel and intermediate level waste, the DECC spokeswoman said.

"We have published a waste transfer pricing methodology, which provides details of our policy in this," she said.

Operators of new nuclear power stations "must have arrangements in place to meet the full costs of decommissioning and their full share of waste management and disposal costs," the methodology says.

The policy, to be implemented through the 2008 Energy Act, requires operators of new nuclear power stations to have a Funded Decommissioning Program approved by the Secretary of State in place before construction can begin.

"The Government does not consider that taking title to radioactive waste, including spent fuel, for a fixed price is a subsidy to new nuclear power, provided that the price properly reflects any financial risks or liabilities assumed by the state," it says.

WASTE COSTS

In its December 18, 2013 decision to open an in-depth State Aid investigation into Hinkley Point C, details of which have only recently been released, the European Commission notes that the costs of managing and disposing of nuclear waste are difficult to quantify.

The UK plans to build a deep geological disposal facility for the permanent disposal of spent fuel and nuclear waste, something which does not yet exist anywhere in the world, the EC says.

"This project is part of the UK's set of initiatives to facilitate investment in nuclear energy, in particular given that the use of the facility will require operators of new nuclear plants to pay a price which will be subject to a maximum value, to be set in advance of construction and based on a cost model which takes into account all available information," it says.

Once notified of the UK's back-end fuel management plan, the EC said it would "assess whether it involves aid and whether, if it does, such aid can be deemed to be compatible with EU rules."

--Henry Edwardes-Evans, henry.edwardes-evans@platts.com
--Edited by Jeremy Lovell, jeremy.lovell@platts.com