The Energy Bill (the “Bill”) includes three issues of specific relevance to those involved in the nuclear power industry:

  • •ONR established as independent statutory body
    • The Office of Nuclear Regulation (“ONR”), established on 1 April 2011 as a non-statutory agency of the Health & Safety Executive (“HSE”), will now be established as an independent statutory body to regulate the nuclear power industry (specifically:  nuclear safety, nuclear security, nuclear safeguards, the transport of radioactive material by road, rail and inland waterway, and health and safety on nuclear sites).
    • Under the Nuclear Installations Act 1965, Crown sites (ie those concerned with defence, except AWE at Aldermaston and Burghfield) will remain exempt from this regulatory regime.
    • This follows from recommendations in the Chief Nuclear Inspector’s report in relation to the Fukushima accident that the regulatory organisation should have demonstrably effective independence from bodies concerned with the promotion or utilisation of nuclear energy.
    • Currently, ONR fulfils these functions on behalf of HSE under a series of agreements without, strictly, having responsibility for them.
    • The Bill also makes changes to seek to ensure that ONR has “the financial and organisational flexibility required to meet is business needs on a sustainable basis” – particularly important given the likely demand for regulators in the context of the proposed UK nuclear new build programme.  
  • •Further clarification on FiT with CfD
    • The “CFD Operational Framework”, published alongside the Bill, provides further clarity on how the feed in tariffs (“FiT”) with contracts for difference mechanism (“CfD”) will support investment in low-carbon (including nuclear) electricity generation.
    • Legislation will be introduced to enable the Secretary of State to designate a body to act as the counterparty to CfDs with power to collect money from suppliers to meet its obligations to generators.
    • The stated intention is to publish the full contract terms for CfD and indicative strike prices in mid 2013 and to consult on the secondary legislation and publish final strike prices in late 2013, with a view to issuing the first CfD in 2014.
  • •ONR entitled to recover further costs for FDPs
    • The Energy Bill 2008 currently entitles ONR to charge a fee to a site operator to recover the costs of obtaining advice in relation to an operator’s funded decommissioning programme (“FDP”), but does not allow recovery of costs by ONR for advice received (i) in relation to consideration of an operator’s section 46 agreement and waste transfer contract, and (ii) in relation to an FDP (prior to the submission of the final FDP).
    • The Bill would now allow ONR to recover from operators these additional heads of cost (which are currently incurred as an operational expense by ONR).