The government is defying major power companies and moving ahead with implementing a hefty 40% increase in the price paid by nuclear power plants to finance the billion-dollar costs that would require dismantling all reactors and managing their radioactive use for decades. waste in seven nuclear cemeteries. An increase far beyond what power plant owners already feared –Iberdrola, Endesa, Naturgy and EDP– they were predicting a 25% increase, which to them already seemed like a threat to the economic sustainability of the facilities.
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) 39.5 percent of the electricity produced by nuclear power plants is above the currently applied rate of 7.98 euros per MWh.
180 million more per year
Nuclear power plants pay National Radioactive Waste Company (Enresa) a non-tax property allowance based on the electricity each produces, which is the correct name for this tax. In total, depending on the final volume of annual electricity, the electric companies that own the nuclear power plants (Endesa and Iberdrolamainly and with the remaining contributions Nature and EDPWe pay around ) An average of 450 million euros per year to the fund Currently, approximately 7.5 billion accumulated radioactive waste schemes are funded.
The government’s proposed increase will trigger annual payments made by nuclear power plants up to approximately 630 million euros, i.e. 180 million more than current payments. A very strong increase that threatens to lead to a direct conflict between the Administration and the major electric companies, which have been complaining for years that excessive taxes imposed by nuclear power plants are jeopardizing their economic sustainability. The increase in fees for nuclear companies comes as the Government is preparing changes to a special tax on large energy companies to allow them to benefit from discounts thanks to their investments in renewable energy, after many companies threatened to cripple million-dollar projects. tax.
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 roadmap for the closure and dismantling of nuclear facilities for the coming decades. managing the waste left behind by 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 the gradual closure of all Spanish nuclear power plants 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 facility, where they will be stored temporarily 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.
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 should therefore be billed. Electricity bill to all consumers.
“Overtaxation”
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.
“We must not forget that nuclear power plants are subject to excessive taxation, which in some cases is unnecessary, discriminatory and inhomogeneous, incomparable with other technologies, and greatly penalizes their operation and management.” The Nuclear Forum this week said “any additional interest rate increase would therefore jeopardize economic sustainability.”
nuclear agreement
Foro Nuclear also complains that the extra costs of the Government’s plan constitute a “significant change” compared to the terms under which agreement was reached between the owners of the nuclear power plants and the listed company Enresa on the closure schedule in 2019. Within the scope of the protocol, it was decided to increase the rate paid by companies for the electricity produced by a maximum of 20% (up to 7.98 euros per current MWh). The government argues that this agreement does not limit its authority to set new increases in the capital benefits paid by facilities if the costs projected in the waste plan change.
“The 40 percent increase in the ‘Enresa rate’ is not against the protocol signed with the companies. The 20% limitation it contains refers to the first draft of the seventh PGRR, submitted to public hearing in March 2020, on the value of the ‘rate’ at the time the protocol was signed a year earlier, in March 2019. According to contrasting sources of the Ministry of Ecology, the maximum increase in the ‘rate’ of 20% is reflected in RD 750/2019; This figure increased its amount from €6.69/MWh to €7.98/MWh, indicating an increase of 19.3% ” Passage against companies’ complaints.
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 tasks.
Keep plants outdoors
Nuclear companies argue that continuing the operation of the Spanish nuclear park and postponing the closure of the facilities “significantly helps finance the Plan, because the longer the nuclear power plants operate, the more financing will be available in the Enresa Fund.” The employers’ association advocates postponing the closures without specifying deadlines for extending the life of the reactors.
From the nuclear sector, according to this newspaper’s report, it is estimated that extending the two-year operating period of each of the nuclear power plants will serve to prevent the increase in rates by delaying the total nuclear outage in the country until 2037. The estimates used by nuclear companies take into account the expected payments each year for the power generation of the plants (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 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.
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.