Part 1 of two Parts
     The current approaches to assessing financial adequacy for decommissioning and radioactive waste management is based on the linear discounting of estimated future costs. Critics say that it should be complemented with a broader “circular” approach according to a new Organization for Economic Co-operation and Development’s Nuclear Energy Agency (NEA) report. The report said that changes of different kinds will to be worked out between today’s decisions and future funding needs.
     The title of the new NEA report is Ensuring the Adequacy of Funding Arrangements for Decommissioning and Radioactive Waste Management. The report consists of a conceptual framework, twelve country case studies on funding management that was prepared in collaboration with NEA countries, and some best policy guidelines. It focused on the interdependency of costs and funding requirements, changes in nuclear policy, such as long-term operation or premature shutdowns, and technological progress.
     William Magwood is the Director General of the NEA.
When the report was released, he said, “We are at the threshold of a new consideration across the world to use nuclear energy to deal with the threat of climate change, along with other energy forms. This is a time of great uncertainty because we have new technologies that are being introduced. We have the idea of building new nuclear plants. But in order to proceed along those lines, we have to show that we know how to deal with the back-end of our fuel cycle, with decommissioning and radioactive waste. The fact that there is some uncertainty in the minds of the public and some policymakers about this is the reason this report was created.”
     The NEA believes that now is an excellent time to debate the adequacy of funding for decommissioning and radioactive waste for at least four reasons.
• As the nuclear fleet ages, many reactors will approach the end of their lifespan according to their original operating licenses in the near future. Prospects for extending reactor licenses vary greatly across NEA countries.
• Changes in the macroeconomic environment are questioning many of the assumptions which have been the basis of discussions about funding.
• Changes in funding arrangements are already happening in a number of NEA countries.
• Decommissioning and radioactive waste management are highly sensitive topics in policy debates.
     The current basis for funding Decommissioning and radioactive waste management is the linear approach. All elements of the system are based on the discounted value of the estimated future costs of a specific technical solution. The report said, “While the linear framework with its unidirectional causality from estimated costs to current assets is too simple, it remains, as long as stakeholders are aware of its limitations, a useful starting point. The challenge is to maintain the robustness of funding systems at a moment where a number of framework conditions are changing significantly, including macroeconomic framework conditions, energy policy making, societal preferences or the structure of electricity markets.”
     The NEA report states that current funding systems in NEA countries are adequate. However, the report saidthat “Nevertheless, there are challenges as decommissioning and radioactive waste management programs move to implementation and societal preferences evolve over time. The very long-term nature of the solutions, in particular for radioactive waste disposal can also create challenges.”
Please read Part 2 next