(May 18, 2007) The European Council, Commission and Parliament have highlighted the importance of decommissioning funds in a joint statement, which noted that 'separated management of such funds is essential to secure both the availability of funds to pay for decommissioning and radioactive waste management and in order to prevent market distortion'. But while the EU institutions fully recognizes the importance of full compliance and accountability and a level playing field, member states almost all have different regimes for estimating, collecting and managing decommissioning costs and there are significant differences in the operation, governance, investment and accessibility of the existing funds across the EU.
(656.5803) WISE Amsterdam - In a report, written by a handful of well-recognized scientists and institutions on behalf of the European Commission it is stated that approximately one third of the 145 power reactors currently operating in the European Union will need to be shut down by 2025. This will result in the need to dismantle, decontaminate and demolish the facilities as well as to undertake processing, conditioning and disposal of nuclear waste and spent fuel ('decommissioning'). The Commission recognizes the importance that the funding of these activities will be adequate and available when needed in order to avoid negatively affecting the safety of EU citizens. Unfortunately it does not analyze how far the differences in decommissioning financing methodologies distort the single market for electricity nor does it assess the validity of the cost estimates given.
Nevertheless, the report, a must-read for anti-nuclear campaigners, has successfully assessed the different regimes and came up with the following conclusions and findings.
- The 'polluters pays' principle for decommissioning is in theory widely accepted and needs to be the fundamental basis of any granting of an operating license.
- The discussions on decommissioning funds have focused on nuclear power plants. Other facilities are so far often overlooked, in particular this is the case with high cost facilities, such as reprocessing plants or facilities having experienced incidents or accidents (e.g. the A1 unit at Bohunice, Slovak republic)
- Costs estimates are subject to high degree of risks and uncertainties; expected costs have risen significantly in a number of countries while many estimates still contain a considerable range of possible costs.
- Not all member states require that funds be managed externally and segregated from the operator.
- In most countries there are only limited rights for the public to access information on related costs and funds
- Many operating companies and governments are satisfied with the current situation and have concerns towards a EU harmonization process of nuclear decommissioning financing.
From a governance perspective the higher the potential conflict of interests within a particular methodology, the greater the need for additional checks and balances. Externally managed funds have a lower risk of conflict of interest. Given the many conflicts of interest embedded in decommissioning and the importance of health and safety aspects over a long time horizon a framework for best practice should be introduced, which goes beyond mere legal requirements. Therefore schemes should have a focus on the independence of the involved parties, avoid situations where the operator has power of authority to dispose of the decommissioning funds and aim at reducing any possible situation where financial funds obtained by the operator can be used for different purposes.
Sounds logic and reasonable? Not for many countries. There are many different schemes being deployed, including
- immediate dismantling after the operational period until no more regulatory control is required; this is proposed in a number of countries including France, Italy, Germany and Slovenia
- deferred dismantling requires that the facility is kept intact and placed in a protective storage state to enable the radionuclides to decay prior to eventual dismantlement. A number of countries have adopted this approach with the delay ranging from between 10- 40 years (Sweden) to around 100 years (UK)
- entombment involves encasing the radioactive structures, systems and components in long-lived substances, while ongoing monitoring is maintained. Currently, the approach is not proposed or undertaken by any member state.
- some member states have not chosen a strategy, e.g. Slovak Republic, Romania
The cost estimates are arrived at by either making an estimate based on a generic rule ('a percentage of the cost of construction is used to estimate dismantling costs') or by making a more detailed 'bottom up' assessment, taking into account expected material, labor, engineering costs, et cetera. Most EU member states have moved or are moving towards the latter approach. Nevertheless the cost estimate methodologies and scope vary from country to country and even within countries. In general, the accuracy of cost estimates is likely to increase over time as more facilities are decommissioned. However, currently, large risks and uncertainties remain, particularly with cost estimates for less standardized plants, such as reprocessing facilities (the estimated cost of decommissioning the Sellafield plant in the UK is Euro 58 billion or US$ 97 billion). And of course debates today can lead to different findings later. For example some material, which is not classified as waste today, may in the future have to be disposed of, e.g. plutonium or depleted uranium.
So, and this is also one of the main conclusions and recommendations of the report, additional guarantees to cover unplanned eventualities to ensure that under all circumstances the 'polluter pays' principle is adhered too should be undertaken. This would require
- the relationship between mother and daughter companies has to be clarified, so that the corporate group will cover all liabilities of the limited company in any case of fi. bankruptcy of the daughter company.
- guarantees should be introduced that cover the financial risk of an early shut down
- guarantees to cover the eventuality of insufficient funds available after final shutdown, due to unexpected cost increases or fund mismanagement.
Most likely it will take years for the current EU to come to agreement about the way forward; harmonization and binding legislation or an agreement to disagree and leave it to individual member states. This would need acceptance of, amongst other issues, the fact that some countries are not (even close to) fulfilling the most basic principles of good governance.
Source: "Comparison among different decommissioning funds methodologies for nuclear installations", May 2007, Wuppertal Institute for climate, environment and energy The full report is hundreds of pages, including reports for each country separately. All to be found at http://www.wupperinst.org/en/projects/project_details/index.html?&beitrag_id=555&projekt_id=167&bid=42&searchart=
Contact: Wolfgang Irrek, Wuppertal Institute, P.O. Box 100480, 42004 Wuppertal, Germany.
Email: wolfgang.irrek@wupperinst.org