I have laid before Parliament a departmental minute setting out the particulars of a new contingent liability associated with fusion activities relating to the STEP fusion energy programme.
STEP—Spherical Tokamak for Energy Production —is the UK’s flagship fusion programme, which aims to deliver a prototype fusion power plant by the 2040s. STEP will be delivered by UK Industrial Fusion Solutions Ltd, a wholly owned subsidiary of the UK Atomic Energy Authority, an executive non-departmental public body. The STEP delivery model requires input from industrial partners—private engineering and construction—to leverage their expertise and capacity. A procurement is currently being undertaken to select these partners.
The provision of a new Government contingent liability would be for liabilities resulting from incidents involving nuclear matter or emissions of ionising radiation arising from fusion activities relating to the STEP programme. Given the nascency of the fusion sector, there is no existing market provision for such liabilities. Therefore, a Government contingent liability will provide UKAEA, UKIFS and their industrial partners the assurance necessary to undertake work on the programme.
The contingent liability is intended to address the gap in the insurance market and therefore would be constrained in line with insurance that could be expected to be obtained in the private sector to cover liabilities unrelated to nuclear matter or emission of ionising radiation incidents. The contingent liability will be reviewed if there is a material change in Government policy on fusion that significantly alters the nature of the contingent liability. This contingent liability will be remote and uncapped.
The Treasury has approved the proposal, and I have been able to provide the usual notice of 14 parliamentary sitting days before the contingent liability begins to be incurred.
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