AGR reactors are the second set after Magnox, but before PWRs for decommissioning

Posted: 29th January 2022

National Audit Office – Hikes in AGR Shutdown and Clearance costs.

The government has entered into new arrangements to decommission seven AGR nuclear power stations. While the arrangements could deliver savings, their success will ultimately depend on the relevant parties working collaboratively to overcome risks, according to the National Audit Office (NAO). The Nuclear Liabilities Fund (the Fund) was established to meet the costs of decommissioning these eight stations, but significant additional taxpayer support has been required with more likely to be necessary. The UK government has provided a guarantee to underwrite the Fund in the event that its assets are insufficient to meet the total costs of decommissioning. In 2020, government contributed £5.1 billion to strengthen the Fund’s position and the Fund has recently requested a further £5.6 billion. The Fund’s assets were valued at £14.8 billion at the end of March 2021. The aim is that growth in the Fund’s investments will be sufficient to meet the long-term costs of decommissioning (£23.5billion). However, cost estimates have doubled in real terms since 2004-05. If this upward trend is maintained and investment growth is not sufficient, there is a risk that the taxpayer will have to make further contributions. In June 2021, the AGR stations’ owner EDF Energy (EDFE) agreed to defuel each of the stations in an arrangement that the Department for Business Energy & Industrial Strategy (the Department) estimates could save the taxpayer around £1 billion. Once defueling is completed, ownership of the stations will transfer to the government’s Nuclear Decommissioning Authority (NDA) for its subsidiary Magnox Ltd to complete the rest of the decommissioning process, which is likely to take several decades. Initial ambitions that the existence of the Nuclear Liabilities Fund would help eliminate taxpayers’ exposure are being tested, with rapid increases in the estimates of decommissioning costs outstripping investment returns. The history of the AGR fleet provides lessons for other long-term programmes carrying significant end‑of‑life liabilities, including new nuclear energy programmes. National Audit Office 28th Jan 2022  https://www.nao.org.uk/report/the-decommissioning-of-the-agr-nuclear-power-stations/