Collateral for nuclear waste -

Collateral for nuclear waste

The Debt Office reviews the collateral provided by various nuclear power companies in order to secure the financing required to manage the nuclear waste produced.

We then submit the results of our reviews to the Government.

Financing system for nuclear waste management

In a specific act, the Riksdag has decided that all costs for safe management and final disposal of expended nuclear fuel shall be financed by revenues from energy production. Through an ordinance, the Government then provides more detailed provisions concerning how the rules and regulations should be applied.

A party with permission to own or run a nuclear facility that gives rise to nuclear waste is obligated to pay a fee to a specially established fund: the Nuclear Waste Fund. A party that is responsible for paying nuclear waste-related fees must also provide acceptable collateral that covers all estimated costs for the management of the nuclear waste not yet paid to the Nuclear Waste Fund. In addition, the collateral must cover a margin of uncertainty with regard to deficits in the fund that can arise as a result of unforeseen events.

The Swedish Radiation Safety Authority (SSM) has the overall responsibility for ensuring the financing system works as it should. SSM reviews various cost calculations and uncertainty analyses submitted by the nuclear power industry every three years. Based on this documentation, SSM then submits proposals to the Government concerning the size of the fees to be paid to the Nuclear Waste Fund and the collateral.

Fees paid are then administered by another authority, the Nuclear Waste Fund. The collateral provided is also for the benefit of the Nuclear Waste Fund.

Debt Office's role is limited yet important

In relation to the financing system as a whole, the Debt Office has a limited yet important role. Our task is to assess the financial sustainability  of pledged collateral based on the fact that it may not be claimed for several decades.

Thus far, pledged collateral has primarily consisted of guarantees from the owners of what are generally smaller entitieswith a permit to conduct nuclear activities.

Collateral consisting of guarantees present a credit risk; i.e., a risk that the companies providing a guarantee lack the ability to fulfil their undertaking at a later date, should the need arise to claim the collateral.

For every review (once every three years), the Debt Office submits a statement to the Government on the assessed credit worthiness of the companies who have provided guarantees.