Annual Report 2004

The Board of the Swedish Nuclear Waste Fund Annual Report 2004 The Board of the Swedish Nuclear Waste Fund 2005. FormgivningEdita Norstedts Tryckeri Rolf Hernegran Kärnavfallsfondens styrelse, c/o Kammarkollegiet P.O. Box 2218, SE-103 15 Stockholm, Sweden www.karnavfallsfonden.se THE SWEDISH NUCLEAR WASTE FUND The Board of the Swedish Nuclear Waste Fund Contents Preface 2 Administration Report for the Swedish Nuclear Waste Fund 2004 4 Accounting Principles 14 Income Statement 15 Balance Sheet 16 Notes 17 Auditors’ Report 22 1 THE SWEDISH NUCLEAR WASTE FUND Preface In the early 1980’s, the Swedish parliament resolved Some of the main features of the fi nancing system for to implement a special fi nancing system for the future spent nuclear fuel etc. are presented in the diagram be- expense s for the safe management of spent nuclear fuel low. For further details, visit the website of the Board of and for the decommissioning and dismantling of nu- the Nuclear Waste Fund, www.karnavfallsfonden.se clear reactors. In accordance with the fi nancing system, nuclear power utilities pay a special fee to the Swedish The Board of the Swedish Nuclear Waste Fund, which state. The size of the fee is based on a certain amount per is a government authority, must submit to the Govern- kWh of electricity delivered by the nuclear power plants. ment each year and no later than by February 22, the The nuclear power utilities are entitled to reimburse- Admi n i stration Report along with the Income Statement ment, on a continuous basis, for any expenses which and Balance Sheet. they have already incurred for measures to achieve the safe handling and disposal of spent nuclear fuel. The re- During 2004, about SEK 508.6 million was paid into mainder of the funds are accumulated for future needs. the Fund. Costs during the year amounted to about SEK In the late 1980’s, a similar system was introduced for 1,106.9 million, most of which comprised reimburse ment the fi nancing of the management of certain radio ac ti ve to the reactor owners. waste from the research facility at Studsvik. As of the time that both fi nancing systems entered into Previously, the funds were deposited in interest-bearing force and up to 2004, about SEK 25,575.8 million was accounts at the Riksbank. Since 1996, the funds have paid in to the Fund. At the same time, other income been accumulated in the Nuclear Waste Fund and have (mainly fi nancial income in the form of interest and been administered by the Board of the Nuclear Waste capital gains with a deduction for capital losses) amount– Fund. Every year, the Government decides the size of ed to about SEK 23,256.4 million. The expenses, largely the fee while the Swedish Nuclear Power Inspectorate in the form of reimbursement to the reactor owners, (SKI) decides on the reimbursement of funds (however, amounted to about SEK 17,150.9 million during the certain minor amounts are decided by the Government). same period. The Legal, Financial and Administrative Services Agency performs administrative duties on behalf of the Board. The capital of the Nuclear Waste Fund (the book value) amounted to about SEK 31,680.7 million at year- The Government decides on end 2004. In addition to this, unrealized gains on fi nan- fees based on SKI’s proposal cial fi xed assets amounted to about SEK 4,746.7 million. The market value of the Fund at year-end was therefore Electricity consumers estimated at SEK 36,427.4 million. Of this amount, about SEK 670.1 million in provisions were made for the future Nuclear waste fee expenses of the management of the waste from Studsvik. included in the About SEK 35,614.6 million was allocated for the future electricity price expenses of waste from, and for, the dismantling of the Nuclear Waste Swedish nuclear power reactors. The remaining amount Nuclear power utilities Fund concerns accrued fees from the reactor owners and the balance in the interest-bearing account at the National Debt Offi ce. This amount has not yet been allocated for SKI decides on reimbursement the two purposes. from Fund SKB Decommissioning The Board has set a target for the administration of SFR the Fund for the period of 1996–2020 of an average real Disposal return on fund capital of no less than 4 % of the book CLAB value of the capital. In the light of the return achieved so Research and Transport 2 development THE SWEDISH NUCLEAR WASTE FUND far and the investments with long-term maturities already It is not possible for the Board to specify exact deadlines made, the Board should achieve this target if the average for measures for nuclear waste management including annual real return for the period of 2004 to 2020 is no the de com mis sioning of nuclear facilities. These deadli- less than 3.25 %. nes are dependent on a combination of safety con si de r- a tions and business assessments which, in turn, will be he administration report shows that the average real T affected by the guidelines for energy policy decided by return on the capital, during the nine-year period of the Swedish Riksdag at different times. The most recent 1996 to 2004, was 6.9% per year. The administration decisions on such guidelines were made at the end of report also shows that the real return in 2004 was the June 2002. The negotiations between representatives highest ever in the history of the Fund, 12.8 %. The from the Government and from the industry – concern- satisfactory result is mainly attributable to a favourable ing an agreement on a long-term sustainable policy combination of a long duration and decreasing interest for the further reform of the energy system – which I rates. However, it must be emphasized that, through its mentioned in my preface to the 2003 Annual Report long duration, the Fund is sensitive to an increase in of the Nuclear Waste Fund, were interrupted without interest rates and that the yield for a year with increasing results in autumn 2004. interest rates could be negative. In 2004, the Board decided to re-invest the capital in the aim of counteracting The Board of the Nuclear Waste Fund is responsible the effects of such a development. for administering the Fund so that the requirements on an adequate return and an adequate liquidity are he result of the evaluation of the administration of T met. To achieve a high return, the strategy of the Board the Nuclear Waste Fund, mentioned in the preface to last is to ensure that a large part of the assets are invested year’s annual report, was submitted to the Government with long maturities, without incurring any unnecessary in April 2004. interest rate risks. To meet the requirements concerning an adequate liquidity, the Board is dependent on annual he expenses that will be charged to the Nuclear T forecasts from the SKI concerning future disbursements Waste Fund over the next few years are affected, to a from the Fund. The Board has started development work con siderable degree, by the progress of the work on the in order to improve liquidity planning. disposal of spent nuclear fuel during the next few years. Some of the main points of the timetable that the Swe- In December, in his fi nal report, Responsibility for dish Nuclear Fuel and Waste Management Co (SKB) are Paying for Nuclear Waste (SOU 2004:125), the special following are presented below. investigator proposed a number of changes in the financing system. The aim of the proposals was to he time-schedules mean that an application for per- T reduce the economic risk borne by the state within the mission to construct an encapsulation plant, probably framework of the current fi nancing system. No essential next to the existing Central Interim Storage Facility for changes in the task of the Board of the Nuclear Waste Spent Nuclear Fuel (CLAB) in Oskarshamn, will be sub- Fund were proposed. However, greater demands will be mitted in the middle of 2006. The plant is expected to be made on the forms of accounting for the accumulated taken into operation in 2017. Site investigations currently funds. The Board is to submit a review statement to the in progress are expected to result in applications at the Government no later than by March 31, 2005. end of 2008 for permission to start the construction of a repository for spent nuclear fuel at a site. It is planned to start repository operation in 2017. According to plans, Stockholm, February 2005 the disposal of spent nuclear fuel and of waste from the decommissioning of Swedish nuclear facilities is expected to be completed in the 2050’s and the repository to be closed in 2060. Chairman 3 THE SWEDISH NUCLEAR WASTE FUND Administration Report for the Swedish Nuclear Waste Fund, 2004 Summary est-rate bonds fell to below 2 %. However, bearing in mind the return achieved so far, the Board’s opinion The present system of the administration of the Nu- is that the real return target of a min imum of 4 % clear Waste Fund was introduced in 1996. Since 1981, on the book value of the ad mi ni ster ed funds for the funds have been accumulated from fees paid by the period of 1996 to 2020 can be reached. The market holders of licenses to own or operate nuclear power value of the assets in the Fund increased during the reactors, as long as the reactors are in operation.

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