Spain’s Nuclear Waste Plan and its Impact on Power Rates

The government is pressing ahead with a substantial 40% rise in the price that nuclear power plant operators pay to fund the long-term management and dismantling of reactors and the handling of radioactive waste. This increase, aimed at covering the costs of decommissioning and decades of waste management in seven dedicated facilities, goes well beyond what owners anticipated. Iberdrola, Endesa, Naturgy, and EDP had warned of a 25% rise, warning that such a jump could threaten the financial viability of their sites.

Under the direction of the Ministry of Ecological Transition led by Vice President Teresa Ribera, the process to raise the capital assistance per megawatt hour (MWh) has begun. Operators currently contribute 7.98 euros per MWh; the proposed increase would push this to as much as 11.14 euros per MWh, representing roughly a 39.5% uplift. This would raise the nuclear share of produced electricity to a major portion of revenue for Enresa and related waste-management schemes.

180 million more per year

Nuclear plants pay Enresa a non-tax property charge tied to the electricity they generate. In total, depending on annual output, the owners—primarily Endesa and Iberdrola with minority contributions from Naturgy and EDP—will contribute a larger sum to the fund, now averaging around 450 million euros per year. The accumulated radioactive waste program has been building a large reserve, with current funding nearing several billions.

The government’s proposed rise would lift annual payments from nuclear plants to about 630 million euros, marking an increase of roughly 180 million euros per year. This sharp uptick risks triggering friction between the administration and the major electricity companies, who have long argued that heavy taxes threaten the economic sustainability of their operations. The rate hike comes as the government considers changes to a special tax on large energy groups, with the aim of letting renewable investments benefit from discounts while large investors push back on the added costs.

Government’s new nuclear plan

The rate hike is tied to the General Plan for Radioactive Waste (PGRR), approved recently by the cabinet, which outlines the path to closing and dismantling nuclear facilities and financing the resulting waste management over coming decades. The final PGRR version calls for a gradual shutdown of all Spanish nuclear plants by 2027 to 2035, a timetable that aligns with earlier understandings between electricity companies and Enresa in 2019. The plan envisions seven waste repositories, one at each plant, with fifty-year interim storage and a large central facility proposed for 2073, and estimates total costs exceeding 3.7 billion euros more than prior versions.

Industry groups have pushed back, arguing for longer operation of plants to fund the plan and questioning the need to pass so much additional cost to generators. The Nuclear Forum, representing employers, has urged keeping plants running and delaying closures, while denying that billions in extra costs are being financed through the price paid by power producers.

According to the updated investment table in the seventh PGRR, the full radioactive waste management program, including seven repositories, is now projected to cost nearly 28.156 billion euros from 1985 to 2100. Earlier versions had forecast lower totals, with changes mainly due to inflation, updated cost estimates, and the possibility of one versus seven storage facilities. The new outlook suggests the end-of-century costs could reach about 20.220 billion euros, and several utilities proposed treating the additional costs as a system-wide expense rather than a direct charge to generators, which would spread the burden across all electricity consumers.

Utilities have argued that the scale of the investments should not fall solely on the plants and their owners. They contend that the state should shoulder part of the burden through alternative financing mechanisms, rather than adding to the rate paid by consumers or the profit margins of the companies themselves.

“Overtaxation”

During recent years, nuclear operators have complained about profitability struggles due to taxation and the property rights linked to their plants, noting a charge of about 25 euros per MWh and anticipating a rise to around 28 euros per MWh. They have called on authorities to reduce tax liabilities and to adopt formulas that guarantee reasonable profitability for the facilities, arguing that current tax structures unfairly penalize nuclear power compared with other technologies.

Foro Nuclear has asserted that any further rate increase would threaten the economic viability of its members, stressing that existing taxation levels are already heavy and that additional charges could undermine the industry’s sustainability.

nuclear agreement

Foro Nuclear also argues that the government’s plan introduces a significant change to the terms agreed in 2019 with plant owners and Enresa regarding the closure timetable. The original protocol allowed for up to a 20% increase in the rate, capped at 7.98 euros per MWh, but the government maintains that the authority to adjust capital benefits remains, particularly if the waste plan costs evolve. The administration asserts that the 40% rate increase is not a breach of the protocol, pointing out that the 20% cap referred to an earlier draft and was set within a broader legal framework established by the time of the agreement.

Under the polluter-pays principle, the proposed investments will be funded by fees from nuclear plants for waste management and dismantling. The capital contribution from plants is considered an operating cost rather than a tax and is paid to Enresa for waste management. In practice, many other countries assign similar long-term responsibilities to the industry, though models vary, including some where a state or public entity handles decommissioning and waste management rather than plants directly funding the entire program.

There is also debate about whether keeping older plants online a bit longer would help finance the plan by increasing Enresa’s funds through continued electricity production, or whether a new schedule should be agreed to balance reliability, safety, and financing. The long-term plan envisions extending plant lifetimes only within a carefully negotiated framework that considers safety, regulation, and costs.

Keep plants outdoors

Industry voices argue that continuing the operation of Spain’s nuclear fleet, and delaying closures, could provide more funding for the Enresa program by boosting annual contributions as electricity is generated. Employers’ associations have suggested pushing back deadlines for plant closure without specific new dates, effectively extending the operating life of reactors.

Estimates from the sector indicate that extending the operation period of each plant by a couple of years could help cap rate increases by delaying the broader outage timeline to 2037. The Enresa fund already holds roughly 7.5 billion euros, with potential growth through ongoing generation and modest financing benefits from recent inflation and interest rate trends. The 2019 arrangement between major electricity companies and the government set a phase-out window from 2027 to 2035, which remains a touchstone for discussions on future timing. The protocol envisioned seven reactors closing gradually across the period, with specific end dates and a framework for future proposals if plans shift. A fresh agreement would be needed to adjust timelines and financing approaches while addressing policy goals for energy reliability and fiscal sustainability.

[citation: Ministry of Ecological Transition, proceedings related to PGRR and Enresa funding, attribution to public documents and industry statements.]