The Germany's scheme to finance the disposal costs of spent nuclear fuels & radioactive wastes. The case of KENFO

This report surveys the German fund scheme that releases the nuclear operators from back-end cost fluctuation risks. Under the new scheme, the German Nuclear Waste Management Fund, or KENFO, would bear responsibility for financing the intermediate storage and final disposal of spent nuclear fuels and radioactive wastes. Instead, nuclear operators would pay the 'basic amount', which corresponds to the estimated cost of the above, to the fund. The amount is about 17.5 billion euros. In addition, if a nuclear operator opts to pay the so-called 'risk premium', which is about 35 % of the basic amount, the operator will be relieved from any more financial obligations even if the fund turned out to be underfunded because of cost overrun. To tackle with political risk, nuclear operators concluded a contract with the government in which the latter commits not to require operators to bear additional financial duty even in case of underfunding. The basic amount and risk premium were set through a commission composed of various experts and stakeholders. However, the level of risk premium seemed to be determined as a kind of political compromise because stakeholders expressed their own views. (author)