Costs of decommissioning

The experiences with decommissioning of commercial reactors are very limited, as no large reactors with normal operating lives (20-30 years) have been completely dismantled yet. Thus also the costs are uncertain. The figures depend heavily of who is presenting them.

The costs also depend on decommission strategy adopted. Fast dismantling to unrestricted site use is most expensive, but not necessarily the best choice everywhere. This strategy also makes funding a more urgent issue, as more money is needed earlier.

It should be noted that decommission in Russia doesn’t need to be equally expensive as estimated in Western Europe, US and Japan. Costs are generally lower, and the plant site need not necessarily be returned back to its original state, to be used for alternative purposes with restrictions.

Factors deciding the cost

Many factors influence the cost of decommissioning: type of facility, size, period of decommissioning, volume of waste, costs of waste disposal, radioactivity, and way of calculating and legal requirements for decontamination of the site. Generally spoken, decommissioning of smaller nuclear reactors is more expensive than of larger ones, if expressed in dollars per MW. Many uncertainties exist and will remain for some decades, because no large reactors with normal operating lives (20-30 years) have been dismantled yet.

The cost of decommissioning nuclear power plants is based on the following factors:

* The sequence of decommissioning stages chosen;
* The timing of each decommissioning stage; and
* The decommissioning activities accomplished in each stage.

In addition, costs depend on such country- and site-specific factors as the type of reactor, waste management and disposal practices and labour rates. As already mentioned, a number of other factors influence the choice of decommissioning strategy and therefore the costs involved. Total decommissioning costs include all costs from the start of decommissioning until the site is released for unrestricted use. As mentioned, in countries with a lot of space, it is not necessarily needed to release the site for unrestricted use, and thus the decommission costs will be smaller.

The cost estimates are based on previous decommissioning and decontamination experience, on the cost of maintenance, surveillance and component replacements, and on the cost of similar non-nuclear work. They are also based on a minimum storage period of 30 years (this time varying also from country to country), to allow for significant decay of radioactivity, and a period of 100 years, to allow worker access, generally without the need for shielding or remote operations.

According to Nuclear Regulatory Commission (NRC) in the US four factors contribute to the ultimate cost of decommissioning:

1. low-level waste disposal costs,
2. labor costs,
3. potential need for on-site used fuel storage:
o Although NRC regulations do not require the inclusion of used-fuel storage costs in decommissioning funds, some companies include such costs in their estimates because no federal repository or interim storage facility is available.
o Therefore, they must allow for the storage of used fuel on site, and non-nuclear-related site restoration costs.

Official estimates of decommission costs

Several European countries as well as Japan, Canada and the United States have made estimates. It is not agreement on these estimates between nuclear industry and independent experts.

NRC and the Nuclear Energy Agency (NEA) have made estimates of decommissioning costs of 10 to 15 % of original construction costs. According to Wise, this is definitely too low, claiming that data of nuclear facilities that are closed and have been or are being decommissioned show much higher real decommissioning costs than estimated before (Wise 1998). On the other side, the Uranium Information Centre in Australia claims that many US utilities have revised their cost projections downwards in the light of experience, and estimates now average $325 million per reactor all-up, in 1998 $ (UIC 2004). The UIC is funded by companies involved in uranium exploration, mining and export in Australia.

According to Friends of the Earth France, the French nuclear operator COGEMA has estimated that the decommission cost for its reprocessing plants in La Hague and Marcoule will be 30 percent of the construction cost.

One of the other French operators, E.D.F. estimates the cost to be 230 euro per kilowatt of power, which represents 50 percent of the construction costs of the nuclear part of the plant. Independent experts like Florentin Krause, does not agree with the E.D.F. He estimates the decommission costs to be between 308 and 954 ? per kilowatt (les amis de la terre 1995). Official French estimates now suggest decommissioning cost at 258.86 euros (1998) per installed Kw. This means that decommissioning costs are equal to 15% of construction costs, and discounted at 3%. Provision is calculated for 40 years operation (COM 2004).

The costs of decommission of the Ignalina NPP in Lithuania, with RBMK reactors of the same kind as Leningrad NPP, is expected to be 1 billion euro by official documents (COM 2004). But according to preliminary estimations done by Lithuanian economists, the total decommission costs exceeds 3 billion euro (CEE 2002).

Interest rate – an important factor

An important factor that will influence the figures is discounting. Discounting is the accounting term in English to describe of the value of money changes over time. For instance spending euro 1 million in the year 2050 would cost less than half that amount today. This is because if you put half a million in the bank today, it will have increased to 1 million by 2050. The discounting is very convenient for the operators. But interest rate is not always as high as believed, and considering inflations the discounting can be misleading.

The German Oko-Institut has shown that nuclear industry operates with unrealistically high rates. The rates cannot be used for discounting the decommissioning costs for two reasons:

1) Only low-risk investment vehicles such as bonds are suitable, because one cannot risk to loose the invested money, and

2) the investment cannot be bound in time, as one may need the money sooner than expected, if for instance an accident occurs (Oko-Institut 1995).

Ways of reducing the costs

To delay the process and not decommission to the last stage, at least not at once, is a quite common way to reduce the costs, also in western countries. It has been done in the United Kingdom, where the policy is adopted to wait 130 years before decommissioning is completed.

French policy is to spread decommissioning over 50 years or more. The result is that only a relatively small amount of money has to be put aside now in decommission funds. Thinking goes that by getting interest on interest during (half) a century, the capital grows till it is enough to pay the decommissioning bill.

The UK nuclear utilities also assume that decommissioning would become cheaper in the future as robot and decontamination technologies are being developed. Financial disadvantages of this approach are that the costs of guarding or monitoring the site during 100 years or more are quite high; and the site cannot be sold or used for other purposes. This is important in a country such as UK, with little free space and thus relatively high prices on land. It is not likely to be an issue in Russia.

Recent developments in the US tend towards immediate decommissioning. For example, decommissioning of the Yankee Rowe nuclear power plant, closed in 1997, started in 1998 and is planned to be completed in 10 years into greenfield condition. Decommissioning costs were first estimated at US$368 million, but inside two months cost estimates went up to US$508 million due to increased spent fuel storage costs (Wise 1998).

The Czech Republic, Hungary, the Netherlands and Slovakia have opted for a strategy of deferred decommissioning. This strategy does not require sums as large as those needed for immediate decommissioning to be made available as soon as a plant is shut down. Installations are in fact cocooned for several years to allow radioactivity levels to decrease (COM 2004). It is essential, however, to ensure that the chosen mode of management guarantees that the financial resources will be fully available and adequate when the time comes.

Russian situation and possible solution

Studies indicating the price of decommission in Western Europe, Japan and the US is not necessarily representative for the costs in Russia. Several conditions imply that Russian decommission can and will be far cheaper.

First, prices of labour and materials are lower in Russia than in the other countries, decreasing the total price. Second, the area situation is much less pressured in Russia than Western Europe and Japan especially. This means that it is not necessary to restore the plant site back to greenfield condition.

For Russia, it will be more appropriate to only do the earlier steps of decommissioning, like removing the spend fuel, and the high-active parts of the reactor once they have cooled enough down. The economical challenges in Russian decommission will thus lie in

* Finding good solutions for the spend fuel and radioactive waste
* Social and economical programs for the earlier nuclear areas.

Rough calculations show that it is possible to accumulate 624 million rubles each year from a fee of 1,3 percent on the electricity price. We assume that the electricity price is 40 kopek per Kwh. Then we multiply the annual production of 120 Twh (equally 120 billion Kwh) with 0,52 kopek. 624 million rubles equal about 20 million Euros. Compared to the costs estimates earlier in this article, it is not much.

However the money would accumulate to approximately 100 million Euros in a five-year period. This means that if collecting money is started quite soon, it will be possible to decommission the first reactor in a sensible way about five years from now.

One factor that possibly can increase the decommission costs in Russia compared to western countries, is the lack of satisfactory storage facilities.

References

CEE 2002: Lithuanian NGO's Experiences on Decommissioning of Ignalina Nuclear Power Plant. CEE bankwatch network, the Energy Project. May 2002.
URL: http://www.bankwatch.org/downloads/ignalina-study.pdf

COM 2004: Report on the use of financial resources earmarked for the decommissioning of nuclear power plants. Communication from the Commission to the European Parliament and the Council. The European Commission 26.10.2004, Com (2004) 719 final.

Les amis de la terre 1995: Demantelement des centrales nucleaires. February 1995.