A defined benefit pension plan with liabilities above £500 million may be considered large; however, this pales in comparison to current nuclear decommissioning and waste management liabilities across the European Union (EU). The back end of the nuclear fuel cycle encompasses all activities following irradiation in a nuclear reactor, including those related to physical decommissioning and management and disposal of radioactive wastes.
Given that most costs occur after revenue generation has ceased, operators need to ensure adequate finances are available to meet these costs as and when required, usually through an advance funding arrangement during the operation of the nuclear facility.
The ability to demonstrate that these costs can be met effectively without placing an undue financial burden on public finances or future generations is crucial to the future of nuclear power generation.
The relevant oversight bodies should require more detailed consideration of the likely future rate of decommissioning and waste-management cost escalation, including clear details of methodology and the sensitivity of results to this assumption.
This paper provides a brief assessment of the funding, investment and governance arrangements in place today to help meet these liability behemoths in the future. For providers of nuclear power, the cost-effective management and disposal of nuclear waste is likely to be the key challenge of the next century.