Rewriting of Nuclear Tax Debate and Storage Plan in the US/Canada Context

The government is moving to finance the astronomical costs of decommissioning all nuclear reactors, building seven radioactive waste stores, and managing decades of nuclear residues. The plan from the Ministry for the Ecological Transition proposes a substantial increase in the charges paid by large electricity providers, nearly a 40% hike to cover 2,000 million euros in the new nuclear waste plan, following an increase of almost 20% in 2019.”

The utilities owning the nuclear plants — Iberdrola, Endesa, Naturgy, and EDP — have long complained about the heavy tax burden they shoulder. They are now preparing to challenge the government in court in a bid to push for a broad reform of the taxes levied on reactor activity to avert the anticipated tariff increases and to improve the sector’s profitability, ensuring its viability as long as the reactors stay in operation.

The Ministry for the Ecological Transition, led by the vice president, has launched the process to approve a rise in the non-tax patrimonial fee charged to electricity companies. From July, the fee would climb to 11.14 euros per megawatt hour (MWh) produced by nuclear plants, up 39.5% from the current 7.98 euros per MWh.

Nuclear operators pay a non-tax patrimonial fee to the National Radioactive Waste Company (Enresa) based on the amount of electricity their plants generate. In total, depending on annual output, Iberdrola and Endesa, with smaller stakes held by Naturgy and EDP, contribute roughly 450 million euros a year to the fund financing the waste-management plan. The fund currently holds about 7.4 billion euros. The government’s proposed increase would push annual payments by the nuclear plants connected to this fee to around 630 million euros, about 180 million more than present levels.

Over 1.5 Bn in taxes

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The consulting firm’s assessment notes that this decision would add pressure on nuclear plants already bearing a heavy tax load. Total taxes and fees already amount to about 25 euros per MWh, representing roughly 35% to 40% of annual plant revenue. With the new rate, the burden could reach up to 28 euros per MWh, translating into about 1.566 billion euros in annual taxes for the sector. Such a level would pose serious challenges to profitability and competitiveness while increasing electricity costs for consumers. Market analysts emphasize that the new rule would elevate the tax burden and shape the sector’s financial landscape for years to come.”

Forum Nuclear, the industry association including Endesa, Iberdrola, Naturgy and EDP, has filed appeals with the Supreme Court against the new Plan for Radioactive Waste (PGRR) approved by the government. The challenges also target the decision to abandon a single central storage site in favor of seven regional facilities to manage waste, and the government’s move to definitively end the Villar de Cañas project in Cuenca.

Utilities argue that the new waste plan and the end of the single-site strategy are the main drivers behind the proposed 40% increase in the Enresa rate. They reject absorbing the multi-billion-euro overruns tied to political and institutional disagreements over the optimal storage location for temporary waste, insisting these costs cannot be placed on the companies alone.

Total tax reform

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The major electricity providers press for a complete reform of the taxes levied on nuclear plants to avoid the sharp Enresa rate rise. A broad tax overhaul would be the central battleground as the industry seeks to shrink its fiscal burden and protect the business’s profitability while keeping the lights on and emissions low in a context of variable renewable development and storage challenges.

Forum Nuclear advocates directing the substantial revenue from the old fuel and waste tax toward Enresa’s treasury to fund decommissioning and waste management rather than general state coffers. It also proposes that Enresa no longer pays a special tax for its storage facilities, which would otherwise be passed through to the plants.

Looking back, the policy framework established in 2012 created both taxes. Since then, nuclear plants have paid roughly 3.1 billion euros for fuel and waste-related charges, with another 1.9 billion euros anticipated until Spain’s planned nuclear phaseout in 2035. Enresa has paid around 148 million for waste storage, with further payments projected as volumes rise. The sector argues that if future revenues are allocated to Enresa, rate increases could be avoided, and any excess could fund reserves to cover future imbalances.

Forum Nuclear highlights that Spanish nuclear plants face an excessive and sometimes redundant fiscal burden that affects operations. Any additional tax hike would threaten financial viability at a time when nuclear power remains a secure, low-emission energy source amid delays in wind and pumped storage projects.

The pace of plant closures remains part of the plan. In 2019, the industry and the government agreed to a staged shutdown of all reactors, with closures slated to begin in 2027 and continue toward a total shutdown by 2035. The government has shown no intention of delaying the agreed timeline, even as operators consider extending reactor lifespans. They insist that any extension must come with a fair return on investment and reliable profitability to sustain reliable operation, ongoing maintenance, and necessary safety upgrades.

Nuclear operators contend that extending reactor life is technically feasible and safe, but they demand guarantees of profitability comparable to other energy sectors, including renewables and cogeneration, which already benefit from revenue mechanisms that ensure cost coverage and a minimum return. While Forum Nuclear has not published a concrete formula, ideas circulating in the sector include long-term contracts with the power system that lock in stable prices or a capacity payments model that ensures nuclear plants are compensated for staying available and providing grid stability.