The UK government said on 23 June that the Department for Business, Energy and Industrial Strategy (BEIS), the Nuclear Liabilities Fund (NLF) and EDF Energy had agreed revised arrangements to deliver safe, low cost, more efficient and cost-effective decommissioning of EDF’s fleet of seven Advanced Gas Cooled Reactor (AGR) stations once they stop generating power.

Under the revised arrangements, the AGR stations will transfer to the Nuclear Decommissioning Authority (NDA) after EDF has ceased generating and defuelled the sites, subject to regulatory approvals, with Magnox as the new Site Licence Company. The NDA will take ownership of the stations and manage the long-term decommissioning programme.

BEIS said the new arrangements provide significant potential cost savings for the taxpayer, with the potential to achieve upward of £1bn of savings, without compromising on safety and security. They will also provide government with enhanced oversight of decommissioning costs.

The arrangements will incentivise EDF to achieve the defuelling of the AGR stations in a cost effective manner. The arrangements also include real risk share, with EDF agreeing to take on the potential of up to £100m in charges for missing targets in return for the potential to earn up to £100m for meeting targets.

EDF’s costs of defuelling and decommissioning (and any EDF incentive payments) will be met from the NLF’s segregated decommissioning fund, established for that purpose.

“The transfer of the stations to the NDA will provide enhanced opportunities for realising synergies, sharing know-how and creating a coordinated and consistent strategy as well as maximising and coordinating competition through the supply chain, which will also allow for more efficient delivery.”

The new arrangements relate to the seven AGR stations (Hunterston B, Hinkley Point B, Dungeness B, Hartlepool, Heysham 1, Heysham 2 and Torness). EDF last year announced the end of generation of Hunterston B and Hinkley Point B in 2022 and recently, Dungeness B with immediate effect. The other four are all scheduled to close on a rolling basis by 2030.

Under existing arrangements, EDF was responsible for the full defuelling and decommissioning of the stations. Existing legal agreements provide the Secretary of State with the option to acquire EDF’s closed AGR sites, for a nominal fee, to arrange for their decommissioning. Under the revised arrangements the BEIS Secretary of State will exercise all HM Government’s ‘Decommissioning Options’ on EDF’s AGR sites simultaneously and on an irrevocable basis.