Private equity could aid nuclear shutdown

Terry Macalister
The Guardian, Tuesday 27 January 2009

Government agencies have asked private equity firms to help with decommissioning the UK's old nuclear power stations, it emerged yesterday.
The UK Atomic Energy Authority has held exploratory talks with the controversial sector, while the Nuclear Installations Inspectorate (NII) used a conference in London yesterday to call for "innovative" ways of raising money. Its chief inspector said private equity might be one solution.
The moves come amid widespread concern that a shortage of public money and the soaring cost of dismantling sites could delay vital safety projects and push up costs.
The Nuclear Decommissioning Authority (NDA) has said more than £80bn is required to pay for the legacy of the atomic industry, with the vast bulk being spent at Sellafield in Cumbria and Dounreay in Scotland. The NDA told the same Nuclear Dialogue conference that future public spending rounds would be tougher than ever.
Bill Hamilton, the NDA's head of communications, urged colleagues to tell government about the need for the nuclear clean-up to be properly resourced. "It's up to everyone in this room and beyond to make sure we do have the funding to help us move forward," he said.
Mike Weightman, chief inspector at the NII, warned ministers they would be storing up problems if vital clean-up projects were delayed further. "Delaying will make it more difficult and more costly," he said, before suggesting that innovative funding was needed, including the possible use of private equity.
The UKAEA is among agencies that have approached private equity, a sector that is often criticised for being overly profits-orientated and short-term in its focus. A spokesman for the agency declined to comment, but industry sources said private equity companies were demanding long-term revenue streams in return for involvement.
A spokeswoman for the Department of Energy and Climate Change said last night that funding for the NDA was more than £8bn, the largest ever over a three-year period. "We cannot speculate on what specific budgets will be in future spending rounds. Funding for the NDA must continue to strike the correct balance between what is desirable and what is affordable and ensuring that safety remains the paramount concern."