Sizewell Power Station

The Secretary of State for Business, Energy and Industrial Strategy has confirmed the appointment of two trustees to the Nuclear Trust, the independent trust that owns the Nuclear Liabilities Fund (NLF).

Richard Wohanka, an existing trustee and acting chair of the NLF board, has been appointed as chair on a permanent basis, with effect from 21 April 2017. Richard has more than twenty years of experience in asset management and was CEO of Fortis Investment Management from 2001 to 2009.

Sally Bridgeland has been appointed as a trustee and director of the NLF with effect from 21 April 2017. Sally is a qualified actuary with extensive experience in the financial services industry, including as CEO of the BP Pension Fund from 2007 to 2014. She is also a non-executive director of Royal London Mutual Insurance, Impax Asset Management and a Trustee of the National Employment Savings Trust.

Roger Lowe has stepped down as a trustee and director of the NLF with effect from 21 April 2017.



NLF to pay for building of new Dry Store at Sizewell B

On 14 January 2013, EDF Energy (‘EDFE’) announced that it had begun work on a new dry store for spent fuel at Sizewell B nuclear power station. Sizewell B is the UK’s only pressurized water reactor (PWR). The purpose of bringing forward the building of the dry store by some years is to ensure the continuing operation of Sizewell B station. The PWR dry store will be the first such facility in the UK.

All the spent fuel from Sizewell B’s reactor since it began producing electricity in 1995 is stored under water in a fuel storage/cooling pond. However, this is expected to reach capacity in 2015. The new dry fuel store will provide additional capacity for Sizewell B’s spent fuel from 2015 for the lifetime of the power station or until a deep geological disposal facility is available. The earliest discharged fuel will be transferred to the dry store via special containers. This will allow newly discharged fuel to be loaded into the vacated storage/cooling pond space.

Currently, EDFE has responsibility for managing and funding Sizewell B spent fuel, but costs arising beyond the current station pond storage regime are a ‘qualifying liability’ funded by the NLF, as is the cost of construction of the new dry store. Accordingly the construction and lifecycle costs will be paid by the NLF.

This is the first major project funded by the NLF.

Notes for editors -
*Costs qualify for payment in the terms of the Nuclear Liabilities Funding Agreement (NLFA) dated 14 January 2005. The NLFA provides that the NLF shall pay for  the discharge of agreed nuclear liabilities of EDFE which include certain contracted and un-contracted decommissioning and waste management costs (together called the ‘qualifying liabilities’).

Planning permission for the dry store was granted by the then Energy Minster Charles Hendry in July 2011. When planning permission was granted, it was subject to a number of planning conditions which had to be met before work could begin. These conditions were met and Suffolk Coastal District Council’s Planning Committee gave the final go-ahead for the dry store at its meeting on Wednesday, 12 September 2012.

For more information contact Jean MacDonald (company secretary, NLF) at


The Mackerron Report

The NLF Trustees welcome the report commissioned by the Department for Energy and Climate Change (“DECC”), “Evaluation of nuclear decommissioning and waste management”, published on 2 March 2012. Written by Professor Gordon Mackerron of Sussex University, the report sets out and evaluates the history of the UK approach to nuclear decommissioning, waste management and clean up.

We are pleased to note the comment of the Secretary of State for DECC that the report underlines the Government’s commitment to deal with the UK’s nuclear legacy and to ensure that the nuclear new build programme learns every lesson from past mistakes. He has also said that “we will not place a costly new millstone around the neck of future generations”.

The report, which can be downloaded from DECC’s website, examines the work of the Nuclear Decommissioning Authority (“the NDA”), the NLF and other bodies involved in the decommissioning and waste management of the UK civil nuclear industry. The NLF Trustees are pleased to endorse Professor Mackerron’s observation that “the turning point” in the previous history of delay, was the publication of the Government White Paper “Managing the Nuclear Legacy” in 2002 and the consequential establishment of the NDA.

The executive summary to the report acknowledges the important role of the NLF and the synergies that can be gained by the NLF and the NDA working with others whose responsibility it will be to manage the liabilities generated by new build (page 5)

We have noted comments in the report regarding Fund adequacy. It is an important part of the duties of the Trustees to seek to ensure that there are sufficient monies accumulated within the Fund to finance all the decommissioning and waste management costs that will fall to it.  Paragraphs 8.21 and 8.22 (page 96) of the report are relevant in this regard –

“8.21 The current valuation of the NLF of £8.6 billion is around double the current liability estimate of £4 billion (discounted), though its current rate of accumulation is significantly less than the discount rate applied (3%). The undiscounted value of the fund is around £12 billion. Whether the fund will be able to meet all the BE liabilities will depend on a range of factors (in addition to whether the current approach to its investment regime is maintained), including the variation in UK interest rates, the extent of any life extensions to the AGR fleet, and the degree to which the scale of the liabilities can be successfully managed.

8.22  The risk is that if the fund is insufficient, the advantages of the (segregated) funding model would be lost, there would be a reputational impact in terms of the nuclear sector having been seen not to have “paid its way”, and future taxpayers would need to pick up the remaining liability. However, Government sees value, particularly in the present macro-economic climate, in using the NLF to reduce the amount of borrowing that the public sector needs to undertake in the short term, thus somewhat reducing future taxpayer liabilities. It is beyond the scope of this report to assess the relative merits of these approaches to the NLF’s investment policy”.

Furthermore, the executive summary which sets out the main lessons from the study concludes with the following –

“Current policy requires the NLF to invest almost wholly in the National Loans Fund, offering relatively low returns but at the same time reducing the Government’s overall debt in the short-term. This approach has implications for the likelihood that the fund will be able to cover all relevant liabilities in the longer term”.

We believe that the report is a useful and timely assessment of the history of decommissioning and waste management in the UK and provides helpful lessons that can benefit everyone engaged in this important   work. For our part, we will continue to engage with Government, the NDA, EDF and others to ensure that the Fund fulfils its purpose.

Lady Balfour of Burleigh

For and on behalf of the Nuclear Liabilities Fund


The statement by the Energy Secretary, Chris Huhne, reported by The Guardian on 2 June 2010, warning of “a £4bn black hole” in nuclear decommissioning and waste costs over the next four years, has been noted by the Trustees of the Nuclear Liabilities Fund (“NLF”). The Secretary of State’s warning refers to costs in respect of the nuclear estate administered by the Nuclear Decommissioning Authority (“NDA”) but his comments regarding the reasons for these costs have relevance to the waste arising from, and in due course, the decommissioning of the eight nuclear stations of British Energy Group plc. It is the purpose of the NLF to provide funding for these.

Inflation in decommissioning costs has outstripped RPI in most recent years and this trend is predicted to continue in the near term. Mr Huhne also drew attention to the falling income due to the closure of ageing power plants. The Magnox stations operated by the NDA will close before the scheduled closure of British Energy’s stations but as British Energy’s stations close, prescribed contributions from the company to the NLF in respect of the stations will taper off and growth of the Fund will be wholly dependent on careful investment.

The challenge for the Trustees is to seek a rate of return for the Fund that at least matches decommissioning inflation to ensure that liabilities do not fall to future generations.

Notes to editors:

  1. The Nuclear Liabilities Fund Limited (the “Fund”) was incorporated on 28 March 1996 with the principal object of providing arrangements for funding certain long-term costs of decommissioning the nuclear power stations of British Energy Group plc.

  2. The Fund which is owned by the Nuclear Trust, received an initial endowment of £232m and thereafter received £4m a quarter from British Energy, adjusted each year in line with RPI. Upon the restructuring of British Energy in January 2005, the Fund also became responsible for funding certain contracted and uncontracted nuclear liabilities of British Energy, including spent fuel and waste. It also became entitled, among other things, to initially 65% of British Energy’s free cashflow in each year.

  3. Part of the Fund’s cashflow interest in British Energy was realised on 31 May 2007. On that date, the Fund converted approximately 30% of its entitlement to British Energy’s free cashflow into 450m British Energy shares. These were immediately sold at a price of 520p per share, raising £2,340m. Following the successful acquisition and restructuring of British Energy Group (“BE”) by EdF, the sale of the NLF’s remaining interest in British Energy of approximately 36% was completed on 19 January 2009, raising a further £4,421m. The Fund at that date then totalled £8,300m.

  4. The monies raised by the sale of the Fund’s interest in British Energy, totalling £6,760m, have been invested at the request of HM Government in the National Loans Fund, which is the Government’s main borrowing and lending account.

Contact – Jean MacDonald, Company Secretary NLF 0207 893 3696

4 June 2010