Universal Registration Document 2020

Other movements include the changes in nuclear liabilities with a corresponding adjustment in the amount of reimbursements receivable from the Nuclear Liabilities Fund (NLF) and the British government, and the change in the provision for last cores via an adjustment to fixed assets.

The overall change mainly results from the decrease in the discount rate for an amount of €644 million, of which €322 million was recognised through the receivable representing reimbursements to be made by the Nuclear Liabilities Fund (NLF) and the British government, and €322 million recognised via an adjustment to fixed assets.

15.2.1 Regulatory and contractual framework

Amendments signed with the Nuclear Liabilities Fund (NLF – an independent trust set up by the UK Government as part of the restructuring of British Energy) following the EDF group’s acquisition of British Energy had a limited impact on the contractual financing commitments made to British Energy by the UK Secretary of State and the NLF under the “Restructuring Agreements”. These agreements were entered into by British Energy on 14 January 2005 as part of the restructuring led by the UK Government from 2005 in order to stabilise British Energy’s financial position. These agreements were amended and restated on 5 January 2009 as part of the acquisition of the British Energy Generation Limited by the Group. British Energy Generation Limited changed its name to EDF Energy Nuclear Generation Limited on 1 July 2011 and replaced British Energy in these agreements and amendments.

Under the terms of the Restructuring Agreements:

• the NLF agreed to fund, to the extent of its assets: (i) qualifying contingent and/or latent nuclear liabilities (including liabilities for management of spent fuel from the Sizewell B power station); and (ii) qualifying decommissioning costs for EDF Energy’s existing nuclear power stations;
• the Secretary of State agreed to fund: (i) qualifying contingent and/or latent nuclear liabilities (including liabilities for the management of spent fuel from the Sizewell B power station) and qualifying decommissioning costs related to EDF Energy’s existing nuclear power stations, to the extent that they exceed the assets of the NLF; and (ii) subject to a cap of £2,185 million (in December 2002 monetary values, adjusted accordingly), qualifying known existing liabilities for EDF Energy’s spent fuel (including liabilities for management of spent fuel from plants other than Sizewell B loaded in reactors prior to 15 January 2005);
• EDF Energy is responsible for funding certain excluded or disqualified liabilities (e.g. those defined as EDF Energy liabilities), and additional liabilities which could be created as a result of failure by EDF Energy to meet minimum performance standards under applicable law. The obligations of EDF Energy to the NLF and the Secretary of State are guaranteed by the assets of the principal members of EDF Energy.

EDF Energy also made commitments to pay:

• annual decommissioning contributions for a period limited to the useful life of the plants as at the date of the “restructuring agreements”; the corresponding provision amounts to €101 million at 31 December 2020;
• £150,000 (indexed to inflation) per tonne of uranium loaded in the Sizewell B reactor after the date of the “restructuring agreements”.

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 13.1).

EDF Energy has been in discussions since 2019 with the UK government to agree changes and clarifications to the Restructuring Agreements to provide for efficient recovery of qualifying costs and clarity that once the AGR stations have finished defueling, they will transfer to the Nuclear Decommissioning Authority (NDA) for subsequent decommissioning activities.

EDF Energy in early 2020 submitted phase 1 of the decommissioning plan submission (DPS 20) which was an update to the defueling liability. The NDA response to the DPS 20 is expected as part of the conclusion in the discussions with the UK government.

The second phase of the DPS 20 should take place late 2021, it will involve updates of all the other decommissioning activities for the AGR plants and decommissioning of Sizewell. At the same time, there will also be an update to the uncontracted liability discharge plan.

15.2.2 Provisions for the back-end of the nuclear cycle

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.