NAO on the decommissioning of the AGRs

I think that this report by the National Audit Office (NAO) is quite worrying. It seems that the only thing we know about the defuelling and decommissioning of the AGR sites is that it will cost a lot of money; almost certainly more than has been put aside for the job.

The current agreement is that as soon as EDF declare a station off the bars permanently the costs of the site transfers to the decommissioning fund, EDF are paid to defuel the site and then ownership “of all land, assets and contracts required by Magnox Ltd to commence (commence not finish!) deconstruction on the sites” transfers to the NDA i.e. it seems that EDF can maybe choose to retain the assets they fancy.

EDF estimated that the fixed costs to manage and maintain a station that is not generating electricity but still holds fuel are around £140 million per station per year, compared with around £25 million to £35 million per station per year once the fuel has been removed. It does, of course, remain to be seen how realistic these values are.

The NDA will not know the exact details of what will transfer nor have a full understanding of the associated costs and liabilities until closer to the expected transfer. The long-term success of this scheme then depends on the ability of the NDA to deliver efficiencies from combining the AGR stations with the existing portfolio. Not that they have an unblemished history.

Since 2021 the NDA has adopted what it terms a rolling decommissioning strategy for its Magnox stations. This approach, it believes, could allow reactors to be decommissioned sooner. Stakeholders the NAO spoke to with technical expertise and knowledge of the AGR stations expressed differing views on the applicability of a rolling strategy to the AGR fleet.

I find it worrying that the way in which EDF, NDA and Magnox Ltd will work together to plan for transfer of the stations is set out in a Memorandum of Understanding because they could not agree the terms of a legally binding agreement. Meanwhile the Department is reliant on there being continuing goodwill between EDF and the NDA to resolve potential differences.

The UK government has yet to put in place arrangements by which it can assure itself that the Department is fulfilling these roles and the decommissioning programme is performing effectively.

Finally, what does the statement that it should be possible to save £1 billion in an estimated cost range of £3.1 billion to £8.0 billion mean? Surely you save £4.9 billion by hitting the lower estimate rather than the higher.

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