A wide range of factors have been seen, in different regions1, as initiating a need for an assessment of available options for existing nuclear power plants (NPPs). These include public safety and environmental issues, changing social needs and expectations, economic issues such as sunken and stranded costs, credit rating, the availability of funding and costs of borrowing for other projects. Technical issues include plant and component ageing, projected remaining lifetime assessments of the specific plant versus economies of scale, needs of the local electricity market and availability, timeframe, capability and costs of alternative forms of generation.
Construction and operation of a nuclear power plant requires significant financial and human investment in design, construction and pre-operational training, the proportions of which are often of national significance. Stakeholders other than the plant owners have often quite significant investment in the overall infrastructure used to support plant operation. The loss of return on this major investment due to early closure can disproportionately affect local, regional and national social, economic and environmental factors. In contrast, extended operation might involve an opportunity of additional return on this major investment, provided that costs related to the extended operation can be assuredly recovered during the additional operational life that this allows.
Factors influencing decision making can cover a very wide range of technical, financial and social issues. In order to gain broad acceptance of decisions, appropriate weighting must be given to factors important to all stakeholders by those making or influencing decisions.
International experience has shown that insufficient accounting of issues important to stakeholders can lead to re-examinations and re-evaluations resulting in implementation delays and even in reversals of decisions. There are two potentially significant adverse affects of such re-evaluations and delays. The first is a significant impact on the overall costs of the project and its alternatives. The second is the potential to significantly influence the safe operation and decommissioning of the NPP, by unintended or inappropriate influences on the morale, safety culture and resources available to NPP staff and managers.
Plant owners, managers and staff, the local, national or regional population, the customers for the electricity generated and those responsible for energy policy and the broader economic management can be expected to have different perceptions of the value of the NPP. The need for re-evaluations and any consequent project delays will depend on the perceived accountability of those making the decisions to the other stakeholders impacted by the decision, and the degree to which all relevant social, technical, environmental and economic factors are weighted in the decision making process.
Depending on the nature of the organization owning the NPP, the owner's primary responsibility and accountabilities may differ. In a private company, responsibilities may be limited to the safe operation of the NPP while it can generate revenue to provide profits. In a vertically integrated regional utility, responsibilities may extend to the provision of electricity needs to a given region, meaning that a replacement energy source must be provided for any
1 In the context of this publication, regions may be either larger or smaller than nations and in either case may involve parts of more than one nation, depending on economic, cultural and electrical grid connectivity.
plant closed. In a government owned utility, those making the decisions may be responsible for the national integrated economic and social management. The different responsibilities of those making or influencing the decision can lead to different perceived weightings of factors such as the economic and social impacts of local employment versus out-of-region fuel purchases or long distance electricity transmission, whether there is a need to provide for alternative generation of electricity in the event of plant closure or on the capability, reliability and social, economic and environmental impacts of alternative forms of generation, be they local or distant.
There can be a significant regional economic impact amounting to tens of millions of dollars (or euros) if a NPP, with operating and maintenance (O&M) spending undertaken regionally and locally, is replaced by fossil fuelled electrical generation where these tens of millions of dollars are subsequently spent for fuels purchased outside of the region. For larger plants these differences run into hundreds of millions of dollars per year.
Many of the issues related to early closure or extended operation of a NPP are equally applicable to other types of plant outside the nuclear sector, (e.g. factories or mines) which are of a significant size in relationship to the economic environment in which they operate. All industrial facilities will reach an end to their operating life, following which it is appropriate to undertake a transition to decommissioning, dismantling, site cleanup and provision for the long term management of wastes produced during the operating life of the facility.
Comprehensive planning and transition management should precede factory, plant and mine closures. This can prevent significant disruptive impact for the staff, customers and suppliers and for the local, regional and national economy. Planning for such closures should include provision for facility decommissioning and legacy waste management. Many plant closures outside the nuclear sector have had significant “shock” impact due to not only early closures, but inadequately planned and managed closures at the end of the predicted operational life.
There are differences in national and regional practices that apply to terminology related to early closure or continued operation. Three main areas have been identified during the development of this publication, which require attention from readers who are not familiar with some of these differences.
• Length of operating license — some regulatory bodies grant licenses for the anticipated operational lifetime of a facility, leading to continued operation being considered focused around "license renewal". Other regulatory bodies grant operating licenses for standard terms of five to ten years and "license renewal" is a normal practice unrelated to life extension.
• Structure of electricity supply system — in some cases NPPs are independently owned and operated in an open electricity market and owners are not responsible for provision of replacement power after the end of life of their facility. In other cases NPPs are part of vertically integrated and centrally managed utilities, which are responsible for electricity supply to meet customer demand. In the latter case decisions related to changes in plant operational life for a NPP are integrally coupled with decisions on alternative methods of meeting the electrical demand of customers.
• Spent fuel management and radioactive waste management — in some countries these are nationally or regionally managed by governments and in others they are the direct financial responsibility of NPP owners. In some countries spent fuel is subject to reprocessing and, potentially, recycling of the remaining fissile values in the fuel.
1.2. Objective
This publication provides information for both early closure and continued operation on the following topics:
Part I
• a broad spectrum of stakeholder issues, and
• the mitigation and management of liabilities and costs.
Part II
• an economic modeling for the decision on continued operation of a NPP versus early closure.
This information should assist in negotiations between various stakeholders on financial issues, regulatory, social and strategic planning issues and the changes required to a wide variety of arrangements and programmes related to the NPP.
1.3. Scope
Part I of this publication provides an overview of factors to be considered in assessing the technical needs and potential economic, social and environmental impact of a NPP early closure or continued operation project. It does not seek to provide a method to weigh each factor or to determine an adequate balance and reach a decision.
Part II of this publication offers a comprehensive perspective on the evaluation of the lifetime economic viability of a NPP in the context of an early closure or a continued operation decision.
1.4. Users
The target users are the executives, managers and owners of NPPs and their consultants and advisors. In particular this publication can be useful to managers and executives responsible for developing comprehensive recommendations to owners, boards of directors and government agencies on the future operations of existing NPPs.
This publication can also provide useful information to decision makers and advisors from government organizations, academic institutions, nuclear industry suppliers, major electricity customers and consumer organizations, environmental agencies and interested and concerned members of the public.
1.5. Terms used Early closure
Stopping plant electrical production with the intent of removing the plant from service while there remains some positive economic value or safe and approved continuing production capability in the plant structures, systems and components.
This includes removal of a plant from electrical production where degradation of some plant structures, systems and components may have occurred which render the plant temporarily not serviceable, but where repair or replacement could be undertaken at costs which could be economically recovered during the subsequent operation of the NPP.
Continued operation
Continuation of operation beyond any administrative, regulatory or engineering fitness for service barriers that are specific to a nuclear power plant. This involves the undertaking of a comprehensive conditions assessment and additional investment where necessary for refurbishment of plant structures, systems and components, with the intention of extending the period of safe operation and economic production capability of a plant. In the context of this publication, continued operation implies going beyond the original design plant life for an additional and long operations period.
Stakeholders
Stakeholders are individuals or groups having an interest in the performance of an organization. Stakeholders typically include the following: customers; owners; operators;
employees; suppliers; partners; trade unions; the regulated industry or professionals; scientific bodies; governmental agencies or regulators (local, regional and national) whose responsibilities may include nuclear energy; the media; the public (individuals, community groups and interest groups); and other States, especially neighboring States that have entered into agreements providing for an exchange of information concerning possible transboundary impacts, or States involved in the export or import of certain technologies or materials.
2. RISKS RELATED TO THE EVALUATION AND DECISION MAKING