By Paul Davies, Joern Kassow and Alexander Wilhelm

In early July 2017, operators of German nuclear power plants initiated the next step in the process of decommissioning by transferring €24 billion to the new state-owned fund for nuclear power plant waste disposal.

The German state established the Fund for the Financing of the Nuclear Waste Disposal (Fonds zur Finanzierung der kerntechnischen Entsorgung) to transfer the nuclear waste management liabilities from the plant operators to the state. In return for their release from these liabilities, the operators agreed in a public law contract to make a significant cash payment to the fund. The total payment includes a base amount already set aside for this purpose by the operators in their accruals, plus a risk premium aimed at covering the risk of cost increases for the disposal in the future. The operators now benefit from long-term legal certainty, taking into account that the amount paid to the fund was based on the best cost estimates currently available and that the German federal legislators (Bundestag and Bundesrat) have not yet decided on a location for the final repository for nuclear waste.