When the party's over ... the financial spectre at the end of nuclear power

Sunset over Sellafield ... those nuclear liabilities will cost billions, and billions, for thousands of years. Photo: Dom Crayford via Flickr (CC BY-NC-ND).
Sunset over Sellafield ... those nuclear liabilities will cost billions, and billions, for thousands of years. Photo: Dom Crayford via Flickr (CC BY-NC-ND).
There are two rules about the end costs of nuclear power, writes Ian Fairlie. It's far more than you ever knew. And whatever sum of money was ever set aside, it's nowhere near enough. Germany understands this. That's why it refused to let E.ON spin off its nuclear liabilities into a hands-off company. But the UK, it seems, has lost the ability to learn from its nuclear mistakes.
Governments and nuclear enthusiasts have assured the public that final waste repositories are nigh. But they have been saying this since the start of nuclear power in the 1950s, with little to show for it. There may, in fact, be no such method.

Nuclear power has a wide spectrum of disadvantages.

One is that when reactors are shut down for good, a host of financial liabilities continue with no income flow from the sale of nuclear electricity to pay for them.

And enormous new liabilities for decommissioning and final disposal commence at the same time.

This became crystal-clear in April when the German energy giant E.ON proposed to spin off its remaining nuclear activities [1] into a separate company, Uniper, in an attempt to protect the parent company from the multiple nuclear liabilities from the impending shutdowns of its nuclear reactors: Germany is phasing out all nuclear power by 2022.

The problem was that Uniper, with few assets and large liabilities, would likely fail and its nuclear financial problems would very likely wind up in the German Government's lap.

However the German Government stepped in to prevent this. On September 9, it proposed a law that would make nuclear companies permanently liable for the costs of dismantling reactors and managing its spent fuel. As a result, E.ON cancelled its hiving off of nuclear.

These German nuclear liabilities were revealed in a Reuters report to be between €20 and €70 billion. Indeed, Spiegel Online reported the provisional findings of an auditing company appointed by the German Ministry of Economic Affairs and Energy that the nuclear companies (E.ON, RWE, EnBW and Vattenfall) were €30 billion short of the amount they needed to set aside.

However, in an indication just how price-sensitive nuclear end costs are, the German Ministry of Economic Affairs and Energy next day refused to recognise the costs cited in Der Spiegel's Report.

The reason for the German Government's intervention is that, after the Der Spiegel report, the share prices of the above German nuclear utilities had fallen sharply to 20 year lows in some cases, and it was necessary to prop up them up.

Governments and nuclear enthusiasts have assured the public that final waste repositories are nigh. But they have been saying this since the start of nuclear power in the 1950s, with little to show for it. There may, in fact, be no such method.

The episode underlines that nuclear power's endgame is both financially and politically very serious - a matter on which the UK Chancellor George Osborne remains blissfully ignorant, or does not care about, or even is perhaps intellectually ill-equipped to grasp.

Internal Government sources indicate that Treasury mandarins are aware of the problems here, but Osborne himself is apparently not. So what exactly are the liabilities?

The long term costs of nuclear power

Spent fuel. First is the managing of thousands of tonnes of spent fuel amassed over reactor lifetimes. The adjective 'spent' is perhaps misleading, as the fuel will remain extremely radioactive for decades, and progressively less radioactive for centuries.

Most European counties keep their spent fuel intact which is the safer form. The UK reprocesses its spent fuel so the problems here are even worse, as reprocessing makes waste considerably more difficult to manage. Post reprocessing, the UK's radioactivity exists in vitrified (glass) wastes or in liquid tanks, both inferior waste forms compared to ceramic (ie unreprocessed) spent fuel.

Care, maintenance, defueling. Initially, nuclear utilities will be responsible for the continued cooling, care and maintenance of the final load of fuel in the reactor for about 5 years after closure. Then defueling takes another ~5 years.

Waste management and monitoring. Then utilities will have to carefully manage their still hot (both thermal and radioactive) spent fuel for a period of approximately 60 years either in ponds or in dry stores. After the initial 60 years of careful management, they will continue to be responsible for monitoring their cooling spent fuel for possibly up to another 240 years.

The time period depends on how long it takes to devise a politically acceptable, realistic, robust, fool-proof method to deal permanently with spent nuclear fuel. Readers are advised not to hold their breaths, as the lack of viable method constitutes a serious political and technological problem in all countries with nuclear programmes.

Governments and nuclear enthusiasts have assured the public that final waste repositories are nigh. But they have been saying this since the start of nuclear power in the 1950s, with little to show for it. We should be prepared to accept the inconvenient truths that there is unlikely to be such a method for the long-term foreseeable future and that there may, in fact, be no such method.

Why do utilities have to manage their spent fuel for so long? The period of 300 years is derived from 10 half-lives of the 2 main dangerous radioisotopes, caesium-137 and strontium-90: both have ~30 year half-lives. A period of 10 half-lives reduces the radioactivity of the nuclear fuel by a factor of about 1,000 [2], in this case 10 x 30 = 300 years.

Reactor hulks. Here the main nuclides of concern in reactor metalwork are cobalt-60 and iron-55, both with ~5 year half-lives. Applying the 10 half-life rule, means nuclear utilities will have look after the reactor hulks for at least 50 years. If it is found that their concrete containments are severely contaminated with tritium (hydrogen-3) with a half-life of 12 years, then about 10 x 12 = 120 years will be needed instead.

In Britain, there is an additional problem: radioactive graphite from the moderators in AGR and Magnox reactors. Thousands of tonnes of this waste already exist inside the closed Magnox reactors and more will be in the AGR reactors when they close.

Although graphite waste is not highly radioactive, it's still a problem because the main radionuclide, carbon-14, has a half-life of 5,700 years. No one really has any idea what to do with this radioactive carbon. But we can be sure that future generations will be grappling with and paying for it. They will not thank us for leaving this problem to them.

Final nuclear waste repository. Finding a long term safe home for nuclear waste is the most expensive headache. There are no operating repositories in the world, and only one planned prototype repository (in Sweden). Such final nuclear waste dumps - if they are ever built - will not only be highly expensive but remain very contentious in all nuclear power countries.

Schemes for paying for nuclear wastes

The German Government has apparently proposed a deal to put nuclear liabilities (ie both spent fuel and decommissioning) in a trust, funded jointly by German nuclear utilities. This sounds a rational idea, but there's something already like that for spent fuel in the US and its experience is discouraging [3].

Since the 1960s, all US nuclear utilities have had to pay into a national escrow fund held by the US Department of Energy who, for its part, was (and remains) mandated to find a technical solution for the wastes and to 'take title' of all US spent nuclear fuel.

However it has done neither: the result has been a long-running saga of political recriminations and lawsuits which make for pretty grim reading. It continues with no solution in sight.

The UK has a similar scheme with the Nuclear Decommissioning Authority (NDA) 'receptacle'. BNFL's and Magnox's liabilities have already been transferred to the NDA [4], and (under a 2008 Act) the former British Energy's AGRs, the Sizewell PWR and any new-build remnants are scheduled to go same way.

The NDA, which currently spends about £2.6 billion a year on decommissioning the UK's first generation Magnox reactors, estimates that the total cost of handling all nuclear wastes will exceed (an undiscounted) £100 billion although these estimates tend to vary [5] according to who is reporting them.

However AGR decommissoning costs could be much greater than the NDA anticipates as it has no experience here: all AGRs are still operating. Rather worryingly, all proposed new reactor types involve higher fuel burnups than at present. This means their spent fuel will be more dangerous and will stay radioactive for longer that at present.

UK taxpayers should not be sanguine about this. None of these huge end costs were properly factored into the price of nuclear electricity at the beginning as they should have been.

And taxpayers should remember that in the 1980s the former CEGB's (substantial) decommissioning fund was raided by the Government to pay for the construction of Sizewell B nuclear power station. Guess where the AGR / PWR decommissioning fund may wind up?

Will they ever learn? Not in the UK ...

At the end of nuclear, onerous financial chickens come home to roost for nuclear utilities - and the squabbling begins as to who is going to carry the can. No wonder E.ON was keen to offload these liabilities, and the German Government less keen to accept them.

In a nutshell, the problem is that a coal-fired or gas-fired power station can be decommissioned and dismantled in a few years, but nuclear reactors and their fuels could well take centuries. This means that nuclear end costs will inevitably be very large and remain contentious in all nuclear power countries.

Such end costs constitute a major political issue which deserves open, well-informed, debate. Until recently, such meaningful debate was largely absent in the UK because a pro-nuclear consensus existed among the three main political parties.

With the recent election of Jeremy Corbyn MP as Leader of the Labour Party, this consensus has been broken and with luck we may see more debates on the large nuclear end costs in Britain.

Another problem is the lack of transparency in estimates of future decommissioning and spent fuel costs. The German Government which initially seems to have tried to be more open was apparently shocked at the true scale of their nuclear end costs and had to deny independent estimates in order to protect the share prices of its large nuclear energy companies.

Pity the nuclear-obsessed UK Government which says it's proceeding with plans for yet more nuclear reactors which will create more nuclear wastes. It seems it won't or can't learn from the recent German experience of the high end costs of nuclear power.

More importantly, pity UK taxpayers in decades, centuries and millennia to come.



Thanks to Pete Roche, Professor Steve Thomas, Dr Marvin Reznikoff and Mark Johnson for comments on initial drafts. Any errors are the responsibility of the author.


[1] E.ON currently operates three nuclear power plants and has minority stakes in three others.

[2] In fact, a factor of 1,028

[3] A separate US fund deals with reactor decommissioning.

[4] The NDA is mainly funded by the Treasury with some income from the NDA's commercial operations and some from the Nuclear Liabilities Fund.

[5] UK funds for decommissioning and for spent fuel are complex and not easy to understand. They require a whole article or perhaps a book to themselves, especially the arcane disputed practice of discounting future liabilities to present values.

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