WR Energy Update – Is Norway equipped for nuclear power?

Many people are emphasising nuclear power as part of the solution to meet the world's growing energy needs and at the same time achieve the climate goals. Nuclear power is a virtually emission-free and stable form of energy with little impact on nature.

At the same time, there are objections to nuclear power related to costs, waste management and the risk of radiation in the event of accidents. The regulation of this form of energy is an extensive and complex topic, and the assessments are therefore not exhaustive or complete.

Our experts have carried out a major study on the legal regulation of nuclear power. If you would like more information or advice on this topic, you are welcome to contact us.

Nuclear power

In the US, Microsoft, Amazon and Google, have signed agreements to supply their data centres with nuclear power. Nuclear power is part of the energy supply in several European countries, but opinions are divided as on whether nuclear power should be phased out or promoted. Germany, for example, has chosen to phase out nuclear power, while Sweden aims to step up and increase their production. The European Union maintains that it is up to each member state to decide whether to establish or phase out nuclear power. In 2022, the European Commission decided to include nuclear power in the EU's taxonomy for sustainable economic activity. The inclusion of nuclear power in the taxonomy means that investments in nuclear power are considered sustainable, provided certain conditions for the nuclear power plant are met.

Norway has long experience of research into nuclear power and has its own Atomic Energy Act, which makes it possible to apply for licences for nuclear power plants. In Norway, nuclear power has not been considered a relevant alternative for energy supply for a long time. In recent years, however, there has been growing interest in and discussion of nuclear power, and several private initiatives have been launched to establish nuclear power in Norway. 

In June this year, the government appointed a public committee to investigate nuclear power as a possible power source in Norway. Part of the committee's mandate is to report on current legislation and analyse whether there is a need to make changes to the current regulation of nuclear power.

Is the Norwegian regulatory framework suitable for the establishment of nuclear power?

In order to address the question of whether the Norwegian regulatory framework is suitable for the establishment of nuclear power, we will take a closer look at three selected issues in the following. Firstly, we will consider the regulation of the licensing process, and then the responsibility for safety. Finally, we will assess whether the current regulatory framework ensures that sufficient financial resources are available to manage waste and decommissioning of nuclear power plants.

Licence processing

Although nuclear power is not part of the Norwegian energy supply today, the legislation makes it possible to apply for a licence to build and operate nuclear power plants. 

Licence under the Atomic Energy Act

The construction and operation of a nuclear power plant requires a licence from the King (the government) and the consent of the Storting in accordance with section 4 of the Atomic Energy Act. The Norwegian Radiation and Nuclear Safety Authority (DSA) is responsible for preparing the case and submitting a recommendation to the Ministry of Health and Care Services. Norway is obliged to ensure that the construction, operation and decommissioning of nuclear power plants fulfil the requirements of international law.

• The Atomic Energy Act is under the Ministry of Health and Care Services
• The Norwegian Radiation and Nuclear Safety Authority (DSA) oversees the Act and is the highest professional body when it comes to safety issues. 

The Atomic Energy Act provides an overall framework for the licensing process. With regard to requirements for the content of the licence application, section 7 states that the applicant must submit information on "the construction site, the purpose, nature and scope of the facility and a description and assessment of the facility's safety conditions". This information is intended to ensure an in-depth assessment of the facility to be constructed. However, the Act lacks supplementary regulations that clarify what a licence application must contain and how the licensing process should be carried out. 

The brief provisions of the Atomic Energy Act can to a certain extent be supplemented by conditions in the licence. According to section 8, a licence may be subject to such terms and conditions "as are deemed necessary in the interests of safety and other public interests". The provision provides a broad authorisation to stipulate conditions, but neither the Act nor the regulations provide more detailed instructions on what constitutes acceptable safety and how it should be documented. 

DSA has prepared a booklet with general terms and conditions for licences under the Atomic Energy Act (Norwegian) , and a guide that elaborates on the terms and conditions (Norwegian). Both documents are based on the framework of the International Atomic Energy Agency. DSA's guidelines are not legally binding in themselves, but can be made legally binding through conditions in the licence. In this way, detailed safety requirements can be stipulated, thereby mitigating the scarcity of national regulations. Nevertheless, nuclear power involves a significant investment, with high safety requirements. In our view, more comprehensive regulations are therefore required for the sake of predictability for applicants and to safeguard societal interests, such as public health and national security. 

Licence under the Energy Act 

The preparatory work for the Energy Act states that the Energy Act is not designed with the construction of nuclear power plants in mind. Licences for the construction of nuclear power plants will therefore be regulated exclusively by the Atomic Energy Act. Nevertheless, a licence will be required under Section 3-1 of the Energy Act for power lines, transformers and other facilities for transmission and transformation of the electricity associated with the nuclear power plant. A sales licence under section 4-1 of the Energy Act will also be required for the further sale of the electricity produced at the plant. 

• The Energy Act is governed by the Ministry of Energy. 
• The Norwegian Water Resources and Energy Directorate (NVE) reports to the Ministry of Energy and is responsible for managing Norway's energy resources.

Licences under the Pollution Control Act

The Pollution Control Act and regulations also regulate the handling of radioactive pollution and waste associated with nuclear power plants, see section 3 of the Regulations on radioactive pollution and radioactive waste (Norwegian). 

The main rule under section 7 of the Pollution Control Act is that pollution is prohibited, and activities that may result in radioactive pollution require a licence under section 11 of the Pollution Control Act. It is the DSA that grants licences and sets conditions for activities that cause or may cause radioactive pollution. Since the DSA will both recommend the licence application under the Atomic Energy Act and assess the permit under the Pollution Control Act, this facilitates coordination of the applications under the aforementioned laws.

Planning and Building Act

The planned construction of a nuclear power plant is a measure that requires an impact assessment and municipal zoning plan under the Planning and Building Act with regulations. The relationship between the state authorities' responsibility for impact assessments under the Atomic Energy Act, the Energy Act and the Pollution Control Act has not been clarified and would benefit from being harmonised. Responsibility for impact assessments is currently divided as follows:

• The Ministry of Energy is responsible for impact assessment programmes under the Energy Act. 
• The Ministry of Health and Care Services and the DSA are responsible for impact assessment programmes under the Atomic Energy Act and the Radiation Protection Act. 
• The Ministry of Climate and Environment and DSA are responsible for the impact assessment programme for permits under the Pollution Control Act.

Our assessment 

Although several sets of rules regulate licences and permits for nuclear power plants, they are not designed with nuclear power plants in mind. The regulations are confusing and unpredictable, which can make the licensing process long and costly for the developer. It can also be questioned whether the current regulation of the licensing process is suitable for safeguarding the interests of society in a satisfactory manner. The construction of nuclear power plants affects many areas of society, and the legislator should carry out a uniform assessment and decide how the licensing process should take place. The relationship of responsibility between different authorities should be clarified to ensure efficient and coordinated processes to avoid errors.

Responsibility for safety

The regulation of responsibility for safety is a fundamental and important issue in nuclear power. The Norwegian state are obliged under international law to comply with the Convention on Nuclear Safety and the Joint Convention. The preambles to both conventions state that the state has the ultimate responsibility for the safety of nuclear facilities and the management of spent fuel and radioactive waste. In order to fulfil its responsibility, the state must, among other things, ensure an effective regulatory framework for the holder's safety responsibility. In Norwegian law, responsibility for the safety of a nuclear facility or its decommissioning is governed by several different sets of rules.

According to section 15 no. 1 of the Atomic Energy Act, the owner of a nuclear facility is obliged "to take all necessary measures to ensure that no harm is caused as a result of radioactivity or other hazardous properties of nuclear fuel or radioactive product". The provision states that the owner of a nuclear facility is responsible for safety. However, we believe that the provision provides little guidance with regard to what specific requirements are set for how the owner must fulfil the safety responsibility in a satisfactory manner. 

Responsibility for safety is partly supplemented by other legislation. For example, both the Radiation Protection Act and the Waste Regulations set out a requirement for soundness.  In addition, the Security Act and the Regulations on Nuclear Materials and Facilities regulate security measures to prevent theft and sabotage of nuclear facilities. 

Our assessment

The licence holder's responsibility for safety is partially regulated in Norwegian law, but we question whether this regulation is sufficient in light of the state's responsibility for an effective regulatory framework for the holder's responsibility for safety. The relationship between the company's and the state's responsibility for safety is not regulated, and could usefully be clarified to ensure predictability regarding who is responsible.

Adequate financial resources for waste management and decommissioning

Radioactive waste management and safe decommissioning are very costly. Both the Joint Convention and the Convention on Nuclear Safety require states to take necessary and appropriate measures to ensure that adequate financial resources are available to ensure the safety of radioactive waste management and decommissioning. This is particularly important if private parties are to build nuclear power. A private party can go bankrupt, and limited liability companies with limited liability pursuant to Section 1-2 of the Companies Act are unlikely to be suitable subjects of liability for the responsibilities and obligations that nuclear power entails at various times both during and after the life of the power plant. 

By way of comparison, Sweden has established a nuclear waste fund consisting of approximately SEK 79 billion at the end of 2023, see the Nuclear Waste Fund's annual report (Swedish). The fund is financed by a nuclear waste fee, paid by the nuclear power plants based on each kilowatt hour delivered. In addition, SEK 59 billion has been pledged as security for the fees that have not yet fallen due (Swedish). 

In Norwegian law, section 2(5) of the Pollution Control Act stipulates the polluter pays principle. This principle means that the polluter must bear the costs of preventing, limiting and cleaning up the harmful effects of the pollution associated with a nuclear power plant. The Act requires financial security in certain cases, but does not regulate the decommissioning of nuclear power plants.

The Atomic Energy Act does not regulate the financing or collateralisation of safe waste management and decommissioning. The Act does, however, regulate the provision of security for nuclear liability, which ensures that sufficient funds are available to cover liability in the event of a nuclear accident. The lack of statutory regulation can to some extent be compensated for through conditions in the licence. 

Our assessment

The current regulation leaves doubt as to whether and how the developer should provide financial security, as well as how any funds set aside should be administered. If a private developer is to build a nuclear power plant, it should be clear how the applicant can document that it has sufficient funds. In our opinion, no regulation has been established to ensure sufficient financial resources for the safe management of radioactive waste and decommissioning. 

Executive summary

The current regulation of nuclear power is characterised by being fragmented and incomplete. If nuclear power is considered a relevant form of energy in Norway, our assessment is that the current regulatory framework is not suitable for the establishment of nuclear power. Our recommendation is that the legislator ensures a comprehensive and complete regulatory framework that is specifically adapted for nuclear power.

We are eagerly awaiting the Nuclear Power Committee's assessments and any proposals for changes to the regulations. Wikborg Rein has conducted a major study on the legal regulation of nuclear power. If you would like more information or advice on this topic, you are welcome to contact us.