Nuclear Power Generation Cost to Rise by 3 Won... Spent Nuclear Fuel Management Fee Increased for First Time in 12 Years

Amendment of the Enforcement Decree and Notification of the Radioactive Waste Management Act
Spent Nuclear Fuel Management Fee for Light Water Reactors Raised by 92.5%
Annual Reserve Requirement for Korea Hydro & Nuclear Power Increases by 300 Billion Won

A view of the canister at the dry storage facility for spent nuclear fuel, constructed prior to the MAXSTOR at the Wolseong Nuclear Power Plant. Korea Hydro & Nuclear Power Photo by Yonhap News

The spent nuclear fuel management fee, which had been frozen since 2013, will be raised for the first time in 12 years. As a result, the annual amount that Korea Hydro & Nuclear Power must set aside is expected to increase by 300 billion won, and the unit cost of nuclear power generation is projected to rise by up to 3 won per kilowatt-hour.

On January 20, the Ministry of Climate, Energy and Environment announced that a partial amendment to the Enforcement Decree of the Radioactive Waste Management Act was approved at a Cabinet meeting. In accordance with the revised decree, the ministry will amend and implement the “Regulation on the Calculation of Radioactive Waste Management Costs and Spent Nuclear Fuel Management Fees, etc.” starting from January 27.

Under this amendment, the spent nuclear fuel (high-level radioactive waste) management fee, which has been frozen since 2013, will be increased by 92.5% for light water reactors and by 9.2% for heavy water reactors. The management cost for low- and intermediate-level radioactive waste will also increase by 8.5% compared to 2021.

The annual cost burden for Korea Hydro & Nuclear Power will rise from approximately 800 billion won to 1.1 trillion won, an increase of 300 billion won. The unit cost of nuclear power generation is expected to increase by 2 to 3 won per kilowatt-hour.

Status of Nuclear Power Plant Decommissioning Costs. Ministry of Climate Energy and Environment

The spent nuclear fuel management fee, which is used for the construction and operation of interim storage and disposal facilities, is imposed on Korea Hydro & Nuclear Power each quarter based on the amount generated and is accumulated in the Radioactive Waste Management Fund.

The spent nuclear fuel management fee had been frozen since 2013. Although there were two rounds of public discussions on spent nuclear fuel management policy (from October 2013 to June 2015 and from May 2019 to April 2021), the fee remained frozen due to the lack of a finalized policy for high-level radioactive waste management. As a result, there were concerns that the burden of handling high-level radioactive waste would be passed on to future generations.

The ministry explained, "We promoted the revision of the spent nuclear fuel management fee in consideration of policy conditions, such as the enactment of a special law on high-level radioactive waste management."

The management cost for low- and intermediate-level radioactive waste is used for the construction and operation of the Gyeongju low- and intermediate-level radioactive waste disposal facility. The ministry stated that it calculated the cost by reflecting the projected volume of radioactive waste based on the 11th Basic Plan for Electricity Supply and Demand and converting future project expenses to present value.

With this revision, the nuclear power plant decommissioning reserve has also been subdivided to reflect the characteristics of each reactor type and the latest decommissioning project costs. The decommissioning reserve refers to the funds required for decommissioning, waste disposal, and related expenses, and is recorded as a provision on Korea Hydro & Nuclear Power's financial statements. However, the amount required for one reactor unit is held in cash.

An Sejin, Director of Nuclear Power Industry Policy at the Ministry of Climate, Energy and Environment, stated, "We have made the costs for radioactive waste management and decommissioning more realistic by objectively reflecting the latest policy, technological, and economic variables. We expect this will ensure stable funding for the sustainability of nuclear power and public safety, and enhance the fairness of the burden between current and future generations."

Meanwhile, the Enforcement Decree of the Radioactive Waste Management Act requires that the funding for post-nuclear power processing, including radioactive waste management costs, spent nuclear fuel management fees, and decommissioning reserves, be reviewed and announced every two years.

The ministry explained that, starting in August 2025, the costs were calculated through expert review, stakeholder consultation, the Radioactive Waste Management Fund Operation Deliberation Committee, and the Management Fee Operation Deliberation Committee.