Nuclear companies are asking the Government for more time and trying to delay a multi-million dollar increase in their rates

The Ministry of Ecological Transition, led by Vice President Teresa Ribera, activated the process of approving the increase in capital assistance paid by electric companies up to 11.14 euros per megawatt hour (MWh) 39.6 percent of the electricity produced by nuclear power plants is above the currently applied rate of 7.98 euros per MWh.

Nuclear Forum, The employers’ association, which brings together the country’s major electric companies and the nuclear industry, has officially requested from the Ministry all the financial and economic information it used to determine this strong increase (well above the 25% the industry fears and has already set). was seen as a threat to its continued existence). The business association has also asked the Government to extend the deadline for submitting claims under the proposed royal decree, which is due to expire on February 2.

Nuclear Forum specifically requested Ecological Transition paralyzing the time for submission of claims until all financial information is obtained Once all this data is available, elaborating on the details and extending the deadlines will result in postponing the start of the increase planned for next July, thus giving them time to negotiate other alternatives that will not impose an additional million-dollar burden on them. operating costs of nuclear power plants.

Nuclear power plants pay a non-tax capital allowance, the correct name for this tax, to the National Radioactive Waste Company (Enresa) based on the electricity each produces. In total, depending on the final volume of annual electricity, the electricity companies that own the nuclear power plants (mainly Endesa and Iberdrola, and Naturgy and EDP with the remaining participation) pay an average of around 450 million euros per year into the fund. It currently funds the plan for approximately 7.4 billion accumulated radioactive waste.

The government’s proposed increase would increase payments made by nuclear power plants each year to around 630 million euros, 180 million more than current payments. It’s a strong enough increase that it could lead to a direct conflict between the executive branch and major electric companies, which have complained for years that excessive taxes imposed by nuclear power plants are jeopardizing their economic sustainability.

HE Nuclear Forum President Ignacio Araluce, realized that nuclear power plants are now profitable due to the increase in electricity prices. “We will see it with the increase in the Enresa rate,” he said in his meeting with the press. An old financial report ordered by nuclear companies from consultancy firm PWC reveals that on average the profitability threshold is reached with an electricity price of around 60 euros per megawatt hour (MWh). According to sources in the sector, in recent years the entire production of nuclear power plants has been sold for 65 euros by large electricity companies.

Companies in the nuclear sector have complained about profitability problems in recent years due to the tax burdens and property rights assumed by power plants, with a cost of approximately 25 Euros per MWh of electricity produced (with this rate increasing). the amount offered is now expected to rise to 28 euros per MWh). Their usual complaints to the administrations include the reduction of tax liabilities and, more recently, the implementation of certain formulas that guarantee a reasonable profitability for the facilities.

“Nuclear power plants seem to be cash cows that can be squeezed bottomless and pay for anything because they have so-called benefits raining down from the sky,” Araluce argued. “30 to 40 percent of the industry’s revenue goes to taxes and the Enresa rate. “Nuclear would be much more competitive if we had tax breaks on other technologies,” emphasizes the head of Foro Nuclear, underlining the stability provided by the plants’ electricity production (20% of the total national production last year). It is an unrivaled rate compared to other production sources.

Government’s new nuclear plan

The increase in the rate prepared by the government is a result of the new General Plan for Radioactive Waste (PGRR), which was approved by the Cabinet two weeks ago and is a new road map for closure and dismantling for the coming decades. Managing the waste left behind by nuclear power plants and determining the billion-dollar cost of all this and how it will be financed.

The final version of the new PGRR confirms that all Spanish nuclear power plants will be phased out until complete blackout between 2027 and 2035 (a program agreed by the electricity companies and Enresa in 2019); In Spain, he envisions the construction of seven radioactive waste repositories, one at each factory, for their temporary storage for fifty years; Future construction of a huge warehouse for the year 2073; and calculates a total bill of over €3.7 billion in extra costs compared to previous versions of the programme.

Companies in the nuclear sector rebelled against the new plan and openly complained about all these aspects. The Nuclear Forum employers’ association publicly advocates keeping nuclear power plants running and postponing planned closures, denying that the billions of dollars of extra costs are being financed by the rate power companies pay for the plants’ electricity production.

“The government says the extra cost is due to the lack of social and institutional consensus on establishing a central repository. So why are nuclear power plants paying the price for this lack of consensus?” said Foro Nuclear’s president. “We must rethink the closure of factories. “The government responsible for national energy policy needs to rethink this.” Pedro Sánchez’s executive has insisted in recent years that the power companies continue the closure plan agreed with them in 2019, which envisages the gradual closure of the reactors between 2027 and 2035.

According to the newly updated total investment table of the seventh PGRR, currently approved, the cost of the entire radioactive waste management program (from 1985 to 2100) together with the construction of seven repositories will amount to almost 28,156 million euros. The last provisional version of the plan, made public last year, projected that the investments of the entire plan would be 24,436 million (3,720 million less) if only one ATC was built, and 26,560 million with the option of seven ATDs (only 1,595 million difference). over a year due to the impact of inflation and some upwardly revised costs).

The new road map predicts that the cost to be paid by the end of this century will reach approximately 20 billion 220 million euros. During the administrative process of the General Radioactive Waste Plan, major electricity companies proposed that the extra costs envisaged in the new road map should not fall on the companies, but should be considered as another cost of the electricity system and therefore be collected from these expenses. Electricity bill to all consumers.

Polluter pays

Under the ‘polluter pays’ principle, the government plan’s billion-dollar investments must be covered by fees paid by nuclear power plants to finance the management of their radioactive waste and the dismantling of the plants. The capital benefit paid by nuclear power plants is, in any case, not a tax figure but rather an operating cost of the facilities themselves (bearing the costs of managing the nuclear waste they produce) and is expressed as Enresa.

In other countries, energy companies are taking on multibillion-dollar provisions to directly manage their waste after the closure of their reactors. The Spanish model implies that a state-owned company takes over the work of dismantling the plants and managing the waste. In addition to waste, there is also risk in undertaking these works.

In 2019, the Government reached an agreement with major electricity companies to phase out all nuclear power plants between 2027 and 2035. The protocol signed by Iberdrola, Endesa, Naturgy, EDP and public company Enresa foresees the gradual closure of seven Spanish reactors, with Almaraz I in 2027, Almaraz II in 2028, Ascó I in 2030, Cofrentes’ It states that in will close in 2030, Ascó II in 2032, and Vandellós II and Trillo in 2035. Nuclear companies assume that changing these dates would require agreement on a new date. Protocol proposing a new way forward and new deadlines against nuclear disruption.

The head of Foro Nuclear emphasized that keeping nuclear power plants open for another four to five years would allow the ‘Enresa rate’ not to increase, but even to be reduced. Other sources in the nuclear industry calculate that extending the operating period of each of the nuclear power plants by two years will serve to prevent the increase in rates and postpone the total nuclear outage in the country until 2037.

Estimates of these sources in the industry take into account the expected payments for the electricity production of the power plants each year (the longer the plants operate, the more electricity will be produced and contributed to the fund managed by Enresa); The amount available in the Enresa fund, which has been feeding the plants for years, is currently around 7.5 billion euros; and a 1.5% discount on financing needs due to the development of interest rates and inflation and the profitability achieved by investing in this multimillion-dollar fund.