Nuclear reactor closure costs could still fall to taxpayer

Press release - October 24, 2006
Brussels, International — The European Commission today adopted new guidelines on how to cover the costs of dismantling old nuclear power plants. Greenpeace described the move as a 'useful step forward', but added that binding rules on decommissioning funds are urgently needed, to protect taxpayers across Europe from potentially massive bills for managing nuclear waste and redundant reactors.

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The European Commission guidelines include calls for nuclear plant operators to establish decommissioning funds separate from a company's general accounts, for independent scrutiny of cost estimates and investment strategies, and for the transparency of non-sensitive information.

Typically, nuclear reactors that operate for 30-40 years take an even longer period after closure to be dismantled, while their radioactive waste remains hazardous for centuries. Enough money must therefore be set aside to cover the costs that arise after a reactor is shut down. This ensures that the polluter pays principle is upheld and reduces market distortions.

"The new guidelines are a useful step forward," said Greenpeace EU Energy Campaigner Mark Johnston. "But many nuclear firms will ignore or obstruct advice that does not suit their short-term interests. To guarantee that all liabilities are met by the industry rather than by taxpayers, the Commission must include binding rules in new energy market legislation due next year."

Recent cases have highlighted the need for common rules on nuclear decommissioning funds, in order to cut subsidies and avoid other market distortions. For example:

  • UK: In 2002, British Energy plc, the operator of eight nuclear power plants, effectively went bankrupt. The company's failure to put enough money into its decommissioning fund led to restructuring that includes a state aid commitment totalling £3.5bn (€5.1bn) from UK taxpayers over the coming decades;
  • Slovakia: The national decommissioning fund intended to cover seven power plants is in deficit. The government in 2004 recognised the problem but still has not taken any action to fix this. Four of the seven reactors were recently privatised, with 66% of the ownership now held by Italian firm ENEL. How the deficit will be resolved and who will pay for the liabilities remain open questions;
  • Germany/Spain: The planned purchase of Endesa by E.ON would in part be financed with the €13.4bn that E.ON has reserved for dismantling its reactors in Germany. If the guidelines were binding, E.ON would not be able to use funds in this way. In contrast, Endesa under Spanish law is barred from using its reserves to buy foreign firms.

Around 150 nuclear reactors currently operate in 15 out of 27 current and soon-to-be EU member states. Most were built in the 1970s and 1980s and are due to be closed down over the next 20 years.

Other contacts:

Mark Johnston, Greenpeace EU Energy Policy Campaigner, tel +32 (0)2 274 1921 or +32 (0)477 790 416
Katharine Mill, Greenpeace European Unit, Media Officer, tel +32 (0)2 274 1903 or +32 (0)496 156 229