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Agenda
1) Introduction
2) Enkom’s nuclear experience & capability
3) Nuclear Decommissioning costs & financing
Types of decommissioning
Analysing the challenges of long-term provision of funding
Evaluating the importance of estimating costs
Identifying the future of finance for decommissioning projects
Page 2 of 25 July 2016
Who we are, what we do & who we work with
Enkom is an Independent consultancy offering professional services to the Nuclear and Energy sectors
Lifecycle Baselines & Whole Life Costing
Establish Programme Management Offices and Project Controls teams with clients
Develop Contract Strategies and Project Execution Plans which are aligned with business objectives
Independently verify scope, schedule & costs at Project, Programme & Enterprise level
Provide Subject Matter Expertise and Assurance for all phases of nuclear projects
Page 4 of 25 July 2016
Timeline of projects our team has supported
July 2016 Page 5 of 25
Major Clients / Projects 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/ 14 14/ 15 15/ 16 16/ 17
Environmental Services (BNG) Baseline Decommissioning Plans
(BDP)
British Nuclear Group Ltd Preparation of LCBL /
NTWP
British Energy Verification of
DWMP
Magnox North Limited Consultancy support to central Project
Controls
Magnox South Limited Consultancy support
Optimised Plan
Magnox Limited Strategic Programmes
Cost Capture & Benchmarking
Magnox Limited (Business) Consultancy support - Central Cost
Function
Nuclear Decom Authority (NDA), Magnox & MWH
Benchmarking Report
Cost Reviews
Sellafield Limited and Tier 2 Contractors
Commercial Assistance
Nuclear Decommissioning Authority (NDA) – SpecialNuclear Services – Lot 6
SNS - GDF Estimate Review
NDA - IR & BCP - Deloitte Review &
Benchmarking
NuGeneration Limited –Assurance of DWMP
Cost & Technical
Our story is one of evolution & strong relationships
The Enkom team has evolved from our work on;
the development of early Baseline Decommissioning Plans,
drafting procedures and processes to allow best practice to be applied,
establishing SLC internal Integrated Assurance processes to allow challenge,
developing Benchmarking methodologies to support value for money,
providing Subject Matter Expertise on national decommissioning portfolios, and
Advisors on Decommissioning Waste Management Plans for nuclear New Build
Page 6 of 25 July 2016
Decommissioning Costs and Financing
Types of decommissioning
Analysing the challenges of long-term provision of funding
Evaluating the importance of estimating costs
Identifying the future of finance for decommissioning projects
Page 8 of 25 July 2016
Types of decommissioning -Immediate vs Deferred Immediate and deferred dismantling may be considered to present specific benefits
and disadvantages.
National policies determine which approach is adopted and, for any selected approach, adequate funding is required as well as;
trained personnel
regulatory oversight
adequate waste storage and disposal facilities
Regardless of the option selected it is vital that early and clear decisions are taken about the timing of the closure of facilities and intended future use of the site.
Page 10 of 25 July 2016
Immediate Decommissioning
Advantages Disadvantages availability of highly qualified workforce
and experience and knowledge on the operational history of the specific facility
easier radiological characterisation and reduced effects of deterioration and ageing
less risk of loss of knowledge and corruption of records
dilution of economic effects for the region
earlier reuse of site
responsibility for the decommissioning is not transferred to future generations
the motivation of personnel might be a problem when demolishing a plant where the workers will lose their jobs
higher radiation exposure during dismantling
greater precautions needed during dismantling
larger volumes of decommissioning waste classified as radioactive
July 2016 Page 11 of 25
Deferred Decommissioning
Advantages Disadvantages reduction of residual radioactivity due to
decay
reduction of radiation hazard during dismantling and reduction of volume of radioactive waste
possibility to wait for availability of disposal routes for rad-waste or for expected improvements in techniques (e.g. Robotics)
possibility to co-ordinate the decommissioning of different units in multiple reactor sites
time for decommissioning funds to grow or to be additionally raised
possibility to increase the size of the fund though effective investments policies
some materials or buildings, including concrete and steel, may deteriorate
costs for maintenance/disposition may increase
knowledge of operational history lost over time
new qualified staff required
no foreseeable changes in boundary conditions e.g. availability of waste disposal routes or changes in the regulatory framework
leaves the burden to be borne by future generations
risk of losing fund value.
July 2016 Page 12 of 25
Decommissioning funds - what they cover
Preliminary decommissioning planning
Spent fuel management
Site decommissioning and restoration
Waste management
Long term storage / disposal of waste materials
Page 14 of 25 July 2016
Current vs future liabilities – who pays for what ?
State funding Operator funding
UK existing legacy funded by government
UK New build funded by operators –Funded Decommissioning Plan (FDP)
Germany – ongoing dialogue between Government & utilities
Sweden – contributions to fund
Finland – operators responsible for all costs
Page 15 of 25 July 2016
European position - revenue and investment
• Costs of decommissioning generally paid for by operators
• Influenced by factors such as;
• Electricity prices
• Subsides and taxes
• Political issues
• Final disposal costs
Page 16 of 25 July 2016
Key drivers for decommissioning cost estimates
• Decommissioning policy & strategy.
• Regulatory involvement
• Dismantling techniques
• Waste management
• Oversight and management costs (overheads)
• Management of Spent fuel and operational waste
• Long term storage / disposal of waste material
Page 18 of 25 July 2016
• Uncertainty and contingency
Estimating uncertainty application in Europe
Source - NEA (2016, p. 82). Costs of Decommissioning Nuclear Power Plants Paris: OECD
Page 21 of 25 July 2016
UK Energy Act 2008 – Funded Decommissioning Plan
Energy Act 2008 requires nuclear operators have secure financing in place to meet full Decom / waste costs
The FDP must set out realistic, clearly defined and achievable plans
Decommissioning Waste Management Plan (DWMP) the part of the FDP that sets out and costs the steps involved in decommissioning a Nuclear Power Station.
Page 23 of25 July 2016
European - Funding Policy and Strategy
• Considerable variations between countries in the details of funding requirements.
• Need for planning, updating cost estimates, collecting and securing the funding and financial risks management...
• Funding arrangements are vulnerable to earlier than expected permanent plant closures (e.g., political decisions, or permanent market price declines),
• Practices vary widely among countries
Extract from The Financial Times : Guy Chazan Berlin 15th March‘16
Page 24 of 25 July 2016
Contact Details
Martyn Jenkins - Managing Director
Email - [email protected]
Website - www.enkom.co.uk
Phone - 00 44 (0) 7968 756 695
Page 25 of 25 July 2016