Furthermore, EDF Energy entered into a separate contract with the Nuclear Decommissioning Authority (NDA) for management of AGR spent fuel and associated radioactive waste resulting from operation of power plants other than Sizewell B after 15 January 2005, and bears no responsibility for this fuel and waste once it is transferred to the processing site at Sellafield. The corresponding costs of £150,000 (indexed to inflation) per tonne of loaded uranium – plus a rebate or surcharge dependent on market electricity price and electricity generated in the year – are included in inventories (see note 1.3.16.1).
EDF Energy and the British authorities began discussions in 2019 to clarify the terms for implementing certain agreements concluded in January 2005 when British Energy was restructured, particularly the Nuclear Liabilities Funding Agreement (NLFA), in view of future nuclear plant closures. The purpose of these discussions is to have a more detailed definition of the dismantling costs to be recovered by EDF Energy from the Nuclear Liabilities Fund (and potentially from the UK Treasury which guarantees the NLF), and of the conditions in which the British authorities can exercise their option to purchase the nuclear power plants after the defueling phase (a right governed by the Option Agreement). A set of principles was agreed in 2019 as a result of these discussions, which are continuing with a view to achieving comprehensive binding agreements.
EDF Energy is drafting a modification for the Baseline Decommissioning Plan (BDP), which was approved in 2017 and is currently in force, in order to reflect the proposed change in the division of liability between EDF Energy during the defueling phase and the NDA (Nuclear Decommissioning Authority), a public body, during the decommissioning phase. In the first stage, concerning updating the estimated cost of removing the fuel, EDF Energy filed its Decommissioning Plan in January 2020 and the NDA’s response is expected in April 2020. The second stage, concerning updating the estimated cost of decommissioning, is expected to take place in 2021.
Spent fuel from the Sizewell B PWR (pressurised water reactor) plant is stored on site. Spent fuel from other plants is transferred to Sellafield for storage and reprocessing.
EDF Energy’s provisions for the back-end of the nuclear cycle concern obligations for reprocessing and storage of spent fuel and long-term storage of radioactive waste, required by the existing regulations in the UK approved by the Nuclear Decommissioning Authority (NDA). Their amount is based on contractual agreements or if this is not possible, on the most recent technical estimates.
| 31/12/2019 | 31/12/2018 | |||
|---|---|---|---|---|
| (in millions of euros) | Costs based on year-end economic conditions | Amounts in provisions at present value | Costs based on year-end economic conditions | Amounts in provisions at present value |
| Spent fuel management | Spent fuel management 31/12/2019 2,655 | Spent fuel management 31/12/2018 1,503 | 2,665 | 1,464 |
| Waste removal and conditioning | Waste removal and conditioning 31/12/2019 1,979 | Waste removal and conditioning 31/12/2018 532 | 1,856 | 369 |
| Long-term radioactive waste management | Long-term radioactive waste management 31/12/2019 3,886 | Long-term radioactive waste management 31/12/2018 1,053 | 3,645 | 743 |
| BACK-END NUCLEAR CYCLE EXPENSES | BACK-END NUCLEAR CYCLE EXPENSES 31/12/2019 8,520 | BACK-END NUCLEAR CYCLE EXPENSES 31/12/2018 3,088 | 8,166 | 2,576 |
Provisions for decommissioning of nuclear plants result from the Group management’s best estimates. They cover the full cost of decommissioning and are measured on the basis of existing techniques and methods that are most likely to be used for application of current regulations.
As explained above, in late January 2020 EDF Energy undertook the first phase of the Decommissioning Plan Submission (DPS 2020). The plan submitted contains an update for the strategy, plan and estimates for the defueling phase of Advanced Gas-Cooled Reactor (AGR) power plants. This led to a €1.9 billion increase in the provision (to €3.9 billion, against the previous estimate of €2 billion), notably reflecting i) the extension of the defueling period following risk and contingency modelling, ii) better definition of the costs covered, and iii) an updated estimate of the costs of preparing and removing fuel, following a review of the industrial scenario.
The NDA is due to examine the proposals in the DPS 2020 by April 2020. All the costs stated in these proposals are considered admissible by the NDA, and the NLF receivable has therefore been updated.
The second phase of the DPS 2020 should take place in 2021. It will involve updates of all the other decommissioning activities for the AGR plants, decommissioning of Sizewell, and an update to the non-contractual commitment plan.
| 31/12/2019 | 31/12/2018 | |||
|---|---|---|---|---|
| (in millions of euros) | Costs based on year-end economic conditions | Amounts in provisions at present value | Costs based on year-end economic conditions | Amounts in provisions at present value |
| PLANT DECOMMISSIONING EXPENSES | PLANT DECOMMISSIONING EXPENSES 31/12/2019 19,278 | PLANT DECOMMISSIONING EXPENSES 31/12/2018 10,187 | 15,741 | 6,637 |
The table above concerns decommissioning obligations excluding the present value of decommissioning contributions payable to the NLF, which is €117 million at 31 December 2019 (see note 32.2.1).
The discount rate has been calculated using an average series of data for a sample of UK Government gilts over the longest available durations plus the spread of UK Corporate bonds rated A to AA, again over the longest-term duration. The implicit inflation rate used in determining a discount rate is based on a long-term forecast of adjusted retail prices (the UK’s CPIH index).
At 31 December 2019, EDF Energy applied a real discount rate of 2% to nuclear liabilities in the United Kingdom (2.5% at 31 December 2018).
