Financing of decommissioning

In 2006 DecomAtom cooperation NGOs published a report on the Russian Decommissioning Fund. The report showes that there are in fact no money accumulating for decommissioning of old reactors. Some money is allocated into what is now a reserve, both most is spent on already closed reactors.

Decommissioning is expensive, and sufficient funding is necessary to carry out the process in a technically, environmentally and socially safe and sustainable way. There are several ways to ensure such funding, a common way is to accumulate parts of income from electricity sale.

The Russian decommission reserve is claimed to have accumulating character, but in practice it is not so. As the reserve was put in operation only at end of the first generation reactors planned operation period, it has not had time to build up a substantial capital. Money from the reserve is spent on already long time closed reactors, which do not generate allocations to decommissioning themselves. The payment is not linked to the actual reactor, but goes into a common reserve.

In North West Russia there are four reactors of first generation, while in the rest of Russia there are eight more, making a total number of twelve first generation reactors. Even though the operating time of some of these reactors has been prolongated, they will need to be decommissioned sooner or later. When this decomissioning process starts, the needs for means will increase substantially. However, at the same time the payments to the reserve will be reduced as the first generation reactors are taken out of operation and no longer contribute to the reserve.

One may speculate on Russian authorities’ intention in this situation. As we have seen in the last years, there is a more or less open intention to prolong the operation time of the oldest reactors by up to 15 years. In this way they will continue to generate money for the decomissioning reserve for a longer period. The nature of the funds structure also implies that as the old reactors are closed, it will be necessary to open more and more new nuclear reactors in order to collect enough money for decommissioning of the old reactors. Prolongation can in short term seem to be a less cost demanding choice, and the structure of the decomissioning reserve, as it is working now, supports our assumptions on long term prolongation of first generation reactors.
The reserve is a start for decomissioning processes; it has established a structure and regulations for payments, which is good. Still, the problems with allocation of means for phase out of first generation reactors are not solved by this reserve.
It could be possible, although we doubt it, that there exist budget allocations for decommissioning that we have not yet found. Nevertheless, we consider it possible that budget money can be used for decommissioning in the future. Help from abroad might also be considered.

Secrets of the decommissioning reserve are still to be revealed. One of the additional remaining question is what the money in the reserve can be, and are being, used for, i.e. what is covered by the regulations. According to the governmental resolutions money can be used for support of decommission and scientific and experimental work connected with decommission. This could be interpreted to cover safety improvements on running nuclear reactors.

For supporting accumulating means for decommissioning of the old Russian NPPs it is necessary to have a tutorial counsil independed from Rosenergoatom, to provide control over the fund.
The process of accumulating and spending of means from this fund should be transparent for the society, and provide possibility for participation by civil society.

Finally, the allocated means from Rosenergoatom to this fund should be enough for providing safe and secure decommissioning processes of all NPP units operated by REA. In other words, nuclear energy should work by market conditions and compete with other electricity energy producers. State subsidizies of nuclear energy should be stopped.