Earlier this month, I attended the Nuclear Decommissioning and Used Fuel Strategy Summit, and walked away with some good takeaways. Mostly it verified my overall sense of the challenges and opportunities for the nascent nuclear decommissioning market. The four big themes that resonated were rising costs, the aging workforce, how imperative proper oversight and management are and the prevailing regulatory uncertainty.
Costs in the Rise
The recent track-record of nuclear clean-up mega-projects meeting cost estimates is extremely poor. Look at projects like Oak Ridge, Hanford and MOX facility where original cost estimates have increased by 3-10 times. This is alarming and troublesome – especially if you consider estimates for nuclear station decommissioning are increasing while U.S. decommissioning trust funds are stagnating or decreasing. In a recent Callan Associates study, it uncovered that U.S. Nuclear Decommissioning Trusts (NDTs) are funded at $61B while decommissioning the current U.S. operating fleet is estimated to cost $88B. The study also found that fund balances were unable to keep pace with rising costs in 2014 as the former rose 5% while the latter rose 11%. The result of the mismatch was a decline in the funding level from 73% in 2013 to 69% in 2014.
An Aging Workforce
The decommissioning industry is still maturing while the workforce is aging and depleting – one of the focuses of the conference is the need for collecting lessons learned for all phases of the process, from planning to deconstruction phases. This can be an acute problem when local knowledge of the aging plants disappears over the decades while these units could be in SAFESTOR. Multiple utility speakers commented on the rapid reductions they were or are attempting to achieve in workforce to reduce cost. This raises a significant risk for maintaining the right workers for as long as necessary to perform upfront planning, even if those plans may sit on the shelf for decades. There is also a different mindset and skillset required for operations and maintenance versus decommissioning that cannot be ignored.
Canada’s Ontario Power Generation provided some long-term solutions. Although Pickering decommissioning is not scheduled to begin until 2020, and for decades its plan is to SAFESTOR its eight units, Ontario Power Generation is working with the community to deal with job displacement, and how it can repurpose the Pickering site during decommissioning. This could serve as a SAFESTOR example for U.S. utilities’ projects near population centers or in politically sensitive environments.
Project and Risk Management is Ever Essential
Nuclear decommissioning requires strong, nimble and effective project management. This is evidenced by those currently engaged with active decommissioning projects (Zion, SONGS, Humboldt Bay), at the conference each emphasized the need for planning, proper metrics, a safety culture and dose management – all essential elements of project management.
In terms of maintaining corporate and/or business unit support for a non-revenue producing plant, there will be an ongoing need for IT, HR, finance other corporate functions to support the decommissioning phase. A need also exists for companies to plan for what management functions should remain as stand-alone dedicated to the plan; this issue could be more acute for investor-owned plants.
Risk management is essential at varying stages, and risk management and modeling is needed to understand bandwidth of outcomes for managing funds and projects. We need to learn from innovation and retire risks to generate confidence that project objectives are achievable.
Regulatory Uncertainty
Regulatory uncertainty will continue to prevail until NRC rule-making moves forward and becomes more predictable; there are gaps that reflect the industry’s immaturity that need to be resolved as more and more plants begin their decommissioning stage.
Managing state and local officials is another important component. Utilities that begin early informing their state public service commissions should expect significant benefits. A recent example is Xcel Minnesota; they have seen benefits with their engagement by statue to provide long term plans years, and perhaps decades, from even announcing its decommissioning plans.
This market is very immature, which presents a plethora of opportunities and challenges. Together, we can learn from one another and from past projects to help support the burgeoning, nuclear decommissioning market. We all need to watch the widening gap between available funds and cost estimates very, very carefully. If market performance does not improve to meet current investment growth assumptions, this will become an acute problem. And, we should all be concerned with the aging workforce as this is a huge issue concern that could complicate ultimate decommissioning projects if local knowledge and lessons learn are not properly captured and accessible.
