The Government has finally approved the new General Radioactive Waste Plan (PGRR)the roadmap for the coming decades on the closure and dismantling of nuclear power plants, the management of the waste they leave behind and how much all this will cost. Finally, because the plan in force until now, approved 17 years ago, had become obsolete. And, finally, because the approval comes months late due to the early elections and the subsequent political standstill.
The definitive version of the several that the new PGRR has had confirms the staggered closure of all nuclear power plants Spanish between 2027 and 2035 until total blackout; contemplates the construction of seven radioactive waste warehouses in Spain, one in each of the plants, to be stored temporarily for five decades; and anticipates the future construction of a deep geological warehouse (AGP), yet to be designed and chosen a location, and which will initially be operational in 2073 to forever house highly radioactive waste.
During the last few years, the Government has kept alive two alternatives for what to do with highly radioactive waste from the plants over the next half century: transporting and storing them all in a centralized temporary warehouse (ATC) for a few decades (which was the option was maintained for years with the idea of locating it in Villar de Cañas, in Cuenca, now completely discarded) or building seven decentralized temporary warehouses in the country (ATD).
The lack of political and social consensus, and given that no autonomous community ultimately wanted to host a large national nuclear cemetery, have pushed the Government to the option of seven warehouses. A path that will require much larger investments, with an extra cost of about 3,720 million euros compared to the total spending estimates that the Executive managed last year in case of choosing the construction of a single centralized warehouse.
According to the new updated table of total investments of the seventh PGRR now approved, the cost of the entire radioactive waste management program (from 1985 to the year 2100) with the construction of the seven warehouses will amount to almost 28,156 million euros. The last provisional version of the plan made public last year anticipated that the investments of the entire plan would be 24,436 million if only one ATC was built (3,720 million less) and 26,560 million with the option of the seven ATDs (1,595 million less soon). more than a year due to the effect of inflation and some upwardly revised costs).
The new roadmap predicts that the costs that still existue to pay until the end of this century will amount to almost 20,220 million euros (in a previous version it was anticipated that the pending investment was 19,244 million, almost 1,000 million less, but it was an estimate for a period of one year less, so it is not strictly comparable).
A 25% increase?
Under the ‘polluter pays’ precept, these investments must be covered with the fees paid by nuclear power plants to finance the management of their radioactive waste and the dismantling of the plants themselves. And given that a strong extra cost is contemplated, the Government will soon approve a million-dollar increase in this non-tax benefit paid by the electric companies that own the plants: Endesa, Iberdrola, Naturgy and EDP.
Nuclear power plants currently pay the National Radioactive Waste Company (Enresa) a non-tax capital benefit of 7.98 euros for each megawatt hour (MWh) of electricity they produce. In total, depending on the final volume of annual electricity, the electricity companies that own the nuclear plants (mainly Endesa and Iberdrola, and with residual participations also Naturgy and EDP) are paying around 450 million euros per year on average to the fund with which finances the radioactive waste plan, which currently has some 7.5 billion accumulated.
The expected extra costs in the future PGRR push for an increase in this rate of 25%, up to around 10 euros per MWh, according to several sources in the nuclear sector, as reported by El Periódico de España, from the Prensa Ibérica group. An increase that would raise the payments made each year by nuclear power plants to around 570 million euros, 120 million more than the current payments. The Ministry for the Ecological Transition, which will be in charge of approving this increase in the nuclear rate, does not comment on the future increase.
Increasing estimate of rates
In 2019, the Government agreed with the large electricity companies on the phased closure of all nuclear power plants between 2027 and 2035. And in that protocol it was agreed to apply a maximum increase of 20% in the rate paid by the companies for the electricity produced, which led to for the Executive to raise the rate to 7.98 euros per MWh generated that is currently applied. A fee that was then considered sufficient to cover the costs of managing nuclear waste and to build a centralized temporary warehouse.
Enresa, the public company in charge of managing radioactive waste in Spain, prepared in 2020 a first draft of a new general plan for radioactive waste in which only the option of building a single ATC was contemplated and whose financial memory maintained the rate at those 7, 98 euros per MWh. In the next version of the plan prepared by Enresa and submitted to a public hearing, the two alternatives were included: building a single ATC or building seven warehouses throughout the country, which would imply applying a rate of 8.1 euros per MWh or raising it to 9.6 euros per MWh, respectively.
In another previous version of the PGRR, which already contemplated only the construction of the seven warehouses, it was anticipated that the necessary capital benefit would be 9.7 euros per MWh. Every year Enresa prepares an update of financial forecasts linked to the development of long-term waste management and in its latest report, prepared last June, it raised its estimate of the necessary rate to 10.15 euros per MWh, according to knowledgeable business sources point out. The nuclear companies predict that the Government will finally slightly adjust that amount (due to lower inflation than estimated when that estimate was made) and will approve an increase in payments to around 10 euros per MWh.
Maintain the plants to avoid raising rates
From the nuclear sector, it is estimated that an extension of the two-year operating period of each of the nuclear power plants would serve to avoid an increase in rates, delaying the total nuclear blackout in the country until 2037. The estimates handled by the nuclear companies take into account the expected payments for the electricity production of the plants each year (the longer the plants operate, the more electricity will be produced and the more will be contributed to the fund managed by Enresa); the amount already available in the Enresa fund that has been feeding the power plants for years, currently about 7.5 billion euros; and the discount of 1.5% of the financing needs for the profitability obtained by investing that billion-dollar fund.
With all these variables, the extra cost contemplated in the future general waste plan would be covered if all the nuclear plants operated for two more years or if some of the plants extended their life beyond that two-year period (the fewer plants that extended their operation, the longer it would be necessary to extend it), according to the sector’s calculations.
In 2019, the Government agreed with the large electricity companies on the phased closure of all nuclear power plants between 2027 and 2035. The protocol signed by Iberdrola, Endesa, Naturgy, EDP and the public company Enresa contemplates gradual closures of the seven Spanish reactors and establishes that Almaraz I will close in 2027, Almaraz II in 2028, Ascó I in 2030, Cofrentes in 2030, Ascó II in 2032, and Vandellós II and Trillo in 2035. The nuclear companies assume that changing these dates would require agreeing on a new protocol to propose a new path and new deadlines towards the nuclear blackout.
Charge the extra cost to the electricity bill
The large electricity companies, owners of the Spanish nuclear power plants, have been showing their refusal to assume higher costs of the new PGRR, and criticize the possibility of the Government raising the rate that companies pay to finance the costs of the plant closure plan. and waste management. This is how the observations sent to the Ministry for the Ecological Transition on the draft of the PGRR by the Nuclear Energy Committee (CEN) were collected, which groups Endesa, Iberdrola, Naturgy and EDP as owners of the reactors located in Spain, as this newspaper reported. .
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The electricity companies blame these extra costs on the enormous delay that accumulated the old ATC construction project in Villar de Cañas, in Cuenca, due to lack of political and institutional consensus, and that is why they refuse to assume them. The proposal of the large electricity companies included in their report of allegations is to consider these additional amounts as costs of the electrical system and charge them to the electricity rate paid by all consumers. The capital benefit paid by nuclear power plants, in any case, is not a tax figure, but rather it is one more operating cost of the plants themselves (that of assuming the expenses of managing the nuclear waste they generate) and which is articulated through Enresa.
Companies in the nuclear sector have been complaining in recent years about their profitability problems due to the tax burdens and property benefits assumed by the plants, with a cost of about 25 euros per MWh of electricity produced. Among their usual claims to the Administrations is a reduction in their tax obligations, and more recently also the application of some formula that guarantees reasonable profitability to the plants, such as long-term contracts with the electrical system itself that set stable prices (which makes the system compensate the electricity companies if the market price is lower than the agreed one and the nuclear companies return the surplus if the price is above) or through a mechanism of payments for capacity, which would imply that the plants are compensated with a specific remuneration for always being available and providing stability to electricity production.