New nuclear power station operators will be required by law to set aside money from day one of generating electricity for their eventual decommissioning and waste costs, Business Secretary John Hutton has announced.

Draft guidance published sets out how clauses in the Energy Bill requiring operators of new nuclear power stations to meet the full cost of decommissioning and their full share of waste management costs would work.

Companies would be required to: Demonstrate detailed and costed plans for decommissioning, waste management and disposal, before they even begin construction of a nuclear power station; set money aside into a secure and independent fund from day one of generating electricity; and have additional security in place to supplement the Fund should it be insufficient, for example, if the power station closes early.

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Hutton said: "Last month I invited energy companies to bring forward proposals for new nuclear power stations and we are already taking steps to facilitate this. It is in the national interest that the energy industry is able to invest in secure low carbon energy sources.

"But it is also in the national interest that we take every step to ensure that the taxpayer is protected from the clean up costs down the line. The Energy Bill and the guidance published today make clear that companies are liable by law to meet their full costs.

"Let me be clear - full means full. Funds will be sufficient, secure and independent, it will be a criminal offence not to comply with the approved arrangements and we are taking powers to guard against unforeseen shortfalls."

The draft guidance, published for consultation, will assist businesses in understanding their obligations under the Energy Bill, and what is required for a Funded Decommissioning Programme to gain approval.

(CD/JM)