Cost of Decommissioning and Disposal of Nuclear Power Plants

The cost of decommissioning and disposal of nuclear power plants is currently being discussed by the Subcommittee for Improvement of the Investment Conditions in Nuclear Power Generation (hereafter the Subcommittee). This is a subcommittee within the Electricity Industry Committee of the Advisory Committee for Natural Resources and Energy (ANRE).

Under the Japanese system, which was introduced in 1988, each power company must establish its own reserve fund. This is based on the notion that (1) decommissioning nuclear power plants is extremely expensive, and (2) since this cost will be incurred after the plant ceases to produce electricity, from the perspective of inter-generational equity, funds to cover this cost should be set aside while the plant is still producing electricity. The system for calculating the amount to be set aside has been changed many times over the years. Under the current system the amount to be set aside is determined each year.

Different countries employ different systems to secure the costs of decommissioning nuclear power plants. The systems in France and Germany are similar to Japan, in that the money set aside is held by the power companies. In Switzerland power plant operators pay an annual contribution into an independent decommissioning fund. In each case the funds are either tax-exempt, or receive preferential taxation treatment. In Japan the fund is tax-exempt. In America, the Nuclear Regulatory Commission (NRC) requires the licensee to set aside funds (prepaid or paid periodically) into an account segregated from the licensee’s assets and outside the licensee’s control. Under another system recognized by NRC, the licensee provides a surety bond, letter of credit, or a line of credit to cover decommissioning costs.

This article outlines the Japanese system, including the cost items covered, the basis of the calculation and the total costs. Items currently covered include the following: decommissioning and dismantling; decontamination of pollution arising from nuclear fuel; processing, management and disposal of radioactive waste; and transport to the disposal site. The amount that must be set aside each year is calculated using the following formula:
Amount in a given year = (total estimated cost x 90% x accumulated electricity generation ÷ estimated total electricity generation) – amount set aside up until the previous year

“Accumulated electricity generation” is calculated as licensed power output x 40 years x 8760 hours x capacity factor (76%). From 1988 to 1998 operating life was set at 27 years, but in 2000 that was raised to 40 years. Capacity factor was originally set at 70%, but that was gradually raised to 76% by 2003. Under the above formula, once “accumulated electricity generation” reaches the “estimated total electricity generation”, no more money is set aside. For fossil fuel plants, the cost of decommissioning is calculated at the time of decommissioning. The system of calculating an appropriate amount in advance is unique to nuclear power. This amount is multiplied by 90%.

The cost of decommissioning is affected by several factors. For example, changes in policy can lead to changes to the existing method of decommissioning. Other factors include changes in the economic circumstances, technical improvements, changes to the system through legislative amendments. The … Subcommittee has been discussing cost changes resulting from legislative and regulatory changes which have affected the cost of waste management and disposal.

The following recent legislative and regulatory changes are relevant:
1. a clearance system has been introduced (see NIT 100, 104, 105, 106);
2. the estimated time required for decommissioning has been changed;
3. a law has been introduced which requires that building materials be recycled.

The Federation of Electric Power Companies (FEPCO) assessed the impact of these changes as follows:
1. The standards set under the clearance system introduced in 2005 were stricter than those proposed by The Nuclear Safety Commission in 1999. The effect of this is to increase the quantity of material to be disposed of as radioactive waste, and hence to increase the cost of disposal. It also increases the cost of the associated inspections.
2. Under the current calculations, decommissioning commences after spent fuel has been transported out of the site and systematic decontamination begins. However, regulatory amendments in 2005 redefined the commencement of decommissioning as being when spent fuel has been moved from the reactor core to the spent fuel pool. This lengthened the time required for decommissioning and increased maintenance costs. However, surveillance costs were reduced by employing a day time only instead of a 24 hour surveillance system.
3. A new law made it mandatory to recycle waste concrete. The current calculations assume a cost of 1,000 yen per ton. This is based on burial of waste concrete. However, costs will rise to 7,000 yen per ton if the concrete is recycled.

FEPCO’s revised cost assessment is based on 1100 MW BWR or PWR model plants. The results of FEPCO’s assessment are shown in Table 1 (current costs included by CNIC).

Table 1
Cost of Decommissioning (1,100 MW model plant) (billion yen)

*Current costs are in 2004 prices.
**Totals might not add up due to rounding.
***Total for all plants is in 2002 prices. At the time there were 52 power reactors with a total output of 45,740 MW. There are now 55 power reactors with a total output of 49,580 MW. A total cost estimate for decommissioning 55 reactors has not yet been released.

The … Subcommittee requested more details from FEPCO, saying that it is not reasonable to amend the cost estimate just on the basis of the final results of FEPCO’s analysis. FEPCO is expected to submit further details at the Subcommittee’s March 14th meeting.

Hideyuki Ban (CNIC Co-Director)