Huhne says UK faces £4 billion nuclear clean-up shortfall

LONDON (Reuters) - Britain faces a 4 billion pound shortfall in covering the costs of nuclear decommissioning and dealing with waste over the next few years, the Guardian newspaper reported on Wednesday.

The additional costs derive from slowly rising expenditure on nuclear decommissioning and falling income due to the closure of ageing power plants, Energy and Climate Change Secretary Chris Huhne told the newspaper.

“As you can imagine, this is a fairly existential problem. The costs are such that my department is not so much the department of energy and climate change, as the department of nuclear legacy and bits of other things,” Huhne said.

The comments come when all departments face a squeeze on spending as the government tries to reduce a budget deficit forecast to exceed 160 billion pounds this year.

Nuclear energy is one of the faultlines in the Conservative-Liberal Democrat coalition which took office last month.

The LibDems oppose any construction of new nuclear plants but have agreed that they will abstain in parliament on the issue rather than seek to block projects.

Huhne, a LibDem, said that in the current financial year the Nuclear Decommissioning Authority’s budget is expected to be in balance, the Guardian reported.

However, from 2011-12, the deficit rises to 850 million pounds, in 2012-13 the gap increases further to 950 million and then to 1.1 billion in the two subsequent years.

“I do not think it is possible for anyone responsibly to stand aside and say we are not going to deal with it,” Huhne was quoted as saying.

“We just have to, but what we are effectively paying for here is decades of cheap nuclear electricity for which we have suddenly got a massive post-dated bill.”

Many of Britain’s ageing nuclear power plants are scheduled to shut over the next few years, with the Conservatives pushing private companies to build new ones as part of a low carbon power generation mix.

Editing by James Jukwey