You are here


UK: Dodgy Decommissioning Deals

Nuclear Monitor Issue: 
Pete Roche ‒ energy consultant and editor of NuClear News

As NuClear News reported in April, the UK Government was forced to pay out £97 million in a settlement with two US companies – Energy Solutions and Bechtel ‒ for mishandling the way it awarded the £6.1 billion Magnox nuclear decommissioning contract.1

The BBC's 'File on Four' has been delving in to some of the details of the contract, and what they have discovered suggests what went on was more than just "dramatic levels of incompetence", as the Labour Party called it, but was, in fact, a deliberate attempt to manipulate the outcome of the tender process.2

In 2012, the Nuclear Decommissioning Authority (NDA) put the second stage of the decommissioning process for the ten Magnox sites and two research reactor sites at Harwell and Winfrith out to tender. Up for grabs was a 14-year contract to take these sites to an Interim End State. The contract was expected to be worth £6-7 billion. Energy Solutions – the company which did the early decommissioning work at these sites – bid for the contract along with Bechtel. About £20 million was spent on putting the bid together with a team of up to 100 people working on it. The final bid included 750 pages of text; a cost estimate of up to 2,000 pages and 11,000 pages of supporting documents.

The bid was scored according to around 700 criteria. In the end the contract went to the Cavendish Fluor Partnership (CFP). But in September 2017, the NDA formally gave CFP two year's notice that the contract would end nine years early. It blamed a significant mismatch between the work outlined in the tender and what actually needed doing. BBC reporter Jane Deith continued: "But more serious than that – the NDA rigged the tender. It was only caught because Energy Solutions smelled a rat and took them to Court."

Ian Bowes, who was working for Energy Solutions until March 2016, told the BBC that the company identified a series of areas that technically they believed the NDA had got wrong in their evaluation. They also looked at the scoring of CFP and it seemed that Energy Solutions were not getting equal treatment. Documents from the NDA tracked how the scoring had been carried out. Someone had gone back into the computer and changed the scores initially awarded to the Energy Solutions bid.

A High Court Judge agreed with Energy Solutions. He said 22 of the scores awarded to Energy Solutions were wrong. Had the right scores been awarded the results of the competition would have been reversed. CFP should have been disqualified according to the technical criteria, and the NDA knew that. In the words of the Judge – Justice Peter Fraser – the NDA fudged it in order to keep CFP in the competition: "By the word fudging I mean choosing an outcome and then manipulating the evaluation to reach that outcome."

And, he said the NDA limited any permanent record of what it was up to, at one stage telling the evaluators to shred their notes. The NDA had acted unlawfully. It was forced to pay Energy Solutions and Bechtel £97 million. Adding other costs such as the £8.5 million cost of fighting the case in court, the total cost to the taxpayer is £122 million according to the National Audit Office.

The BBC asked the NDA why it manipulated the tender process. Was it because it was under pressure to select the cheapest bidder? If not, what was the reason? But it didn't get an answer.

Chief Executive David Peatie, who arrived after the Magnox mess, apologised for past mistakes and said procedures have now changed.

Business Secretary Greg Clark has ordered an independent inquiry. Steve Holliday, former boss of the National Grid, is interviewing witnesses and will report next year. But the fallout could be huge because Ministers gave the whole Magnox contract approval. The NDA says the Government should take some share of the blame. Emeritus Professor of Energy Policy, Steve Thomas, says he thinks the NDA feels resentful that the Department of Energy (now the Department for Business Energy and Industrial Strategy – BEIS) has loaded the blame onto them rather than taking some responsibility themselves because the contract was approved by the Treasury and the Department of Energy and Climate Change, but only if it achieved savings of at least 10%. The bidding process and the overly complicated criteria were things they should have looked at.

The House of Commons Public Accounts Committee will look at this at the end of November 2017. Meg Hillier, chair of the committee, says the fiasco rings many alarm bells about how it could have happened with so many people in the NDA and Government looking into this contract. The Government says it monitors the NDA more closely now. The 10% saving target was meant to secure value for money and the right level of commercial expertise. In 2015, the Government cancelled a contract to clean up Sellafield saying it was too complicated for a private sector contract. It took back control of Sellafield and may do the same with the Magnox sites.

Cavendish is also decommissioning Dounreay as part of a consortium. It won the £1.5 billion contract in 2012, beating a bid by Energy Solutions and Amec. The BBC revealed that Energy Solutions believes that, just like with the Magnox contract, the scores for the Dounreay bid were "fudged". Energy Solutions didn't go to Court at the time because it didn't want to upset the NDA and ruin its chances of winning the Magnox contract.

People in the NDA confirmed to Energy Solutions that scores had been changed for the purpose of ensuring that it did not win the contract. The Magnox inquiry has spoken to witnesses about the Dounreay contract tendering process. If the inquiry seriously criticises the Dounreay contract, it would mean the NDA had mishandled three multi-billion contracts. The NDA didn't respond to allegations that scores for the Dounreay contract had been manipulated.

The NDA hasn't decided what to do about the Magnox contract, but the fiasco raises serious questions about the NDA's capability to handle the complex and dangerous job of safely taking apart ageing nuclear reactors. Steve Thomas says if the contract is to come back in house, the NDA would clearly need a major shake-up. One of the serious issues about long delays to decommissioning is that there are lots of things that can go seriously wrong. What's clear is that our atomic past will still be part of tomorrow's world.


1. 'Decommissioning makes every other disaster in the post-war period pale into insignificance', NuClear News, No.94, April 2017,

2. BBC File on 4, The Nuclear Option ‒ Powering the Future and Cleaning Up the Past, 31st October 2017,

Reprinted from NuClear News, No.101, Nov. 2017,

UK nuclear clean-up contract chaos: a tale of collusion and calumny

Nuclear Monitor Issue: 
David Lowry − independent research consultant, former director of the European Proliferation Information Centre.

Adam Vaughan, energy editor of the British daily newspaper, The Guardian, last month reported on the very expensive consequences of what he characterized as the "flawed tendering process for dismantling old reactors at 12 sites".1 Vaughan quotes my research colleague, Stephen Thomas, emeritus professor of energy policy at the University of Greenwich, as branding the Nuclear Decommissioning Authority's (NDA) handling of the contract as "an immense screw-up."

I fear it is much worse than that. From my detailed experience of a previous failed management contract agreed by the NDA, also placed with a US company-led consortium, Nuclear Management Partners (NMP), which also led to the early cancelling of the contract, there could well be dubious collusion between the NDA and the then responsible government department (energy and climate change, DECC) under a Labour Government, at the expense of the long-fleeced taxpayers.

The investigator appointed by business secretary Greg Clark to look into this scandal, Steve Holliday, needs to revisit this earlier Sellafield scandal to assess why the public procurement lessons – especially the need for candour and transparency ‒ that should have been learned, were not.

Dr Clark's written statement, made on March 27 – under the surprisingly opaque headline "BEIS Non-Departmental Public Bodies" – revealed that the NDA had decided to terminate its contract with Cavendish Fluor Partnership (CFP) for the management and decommissioning of 12 redundant Magnox sites (including two research sites) which, together with the Calder Hall reactor on the Sellafield site, formed the UK's first fleet of nuclear power stations.

The NDA ran a £6.1 billion tender process from April 2012 which resulted in a 14-year contract being awarded in September 2014 to CFP – a joint venture between the British firm Cavendish Nuclear, a subsidiary of Babcock International, and the US company Fluor Inc.

Clark added that "This decision was approved by the then Department for Energy and Climate Change and HM Treasury (Finance ministry)."

CFP started work on the Magnox estate on 1 September 2014, after which, according to Clark's statement, "started a process to ensure that the scope of the contract assumed in the 2012 tender matched the actual status of the decommissioning to be done on each site – a process known as consolidation."

The statement continued:

"It has become clear to the NDA through this consolidation process that there is a significant mismatch between the work that was specified in the contract as tendered in 2012 and awarded in 2014, and the work that actually needs to be done."

"The scale of the additional work is such that the NDA Board considers that it would amount to a material change to the specification on which bidders were invited in 2012 to tender. In the light of this, the NDA Board, headed by a new Chair and Chief Executive, has concluded that it should exercise its right to terminate the contract on two years' notice. The contract will be terminated in September 2019, after 5 years rather than its full term of 14 years. This termination is made with the agreement of CFP."

The NDA is now expected to establish arrangements for a replacement contracting structure to be put in place when the current contract ends, under the NDA's new Chief Executive, David Peattie.

Clark also revealed that the cost to the British taxpayers would be nearly £100 million, saying:

"In addition I can announce today that the NDA has settled outstanding litigation claims against it by Energy Solutions and Bechtel, in relation to the 2014 Magnox contract award.

"The NDA was found by the High Court in its judgment of 29 July 2016 to have wrongly decided the outcome of the procurement process.

"As part of the settlements, NDA has withdrawn its appeal against the judgment. While these settlements were made without admission of liability on either side, it is clear that this 2012 tender process, which was for a value of up to £6.1 billion, was flawed. The NDA has agreed settlement payments with Energy Solutions of £76.5m, plus £8.5m of costs, and with Bechtel of $14.8m, plus costs of around £462,000 – approximately £12.5m in total.

"These are very substantial costs and had the potential to rise much further if the case had proceeded to trial.

"Taxpayers must be able to be confident that public bodies are operating effectively and securing value for money. Where this has not been achieved such bodies should be subject to rigorous scrutiny.

"I am therefore establishing today an independent Inquiry into the conduct of the 2012 procurement process and the reasons why the 2014 contract proved unsustainable. These are separate issues but both need to be examined thoroughly by an authoritative and independent expert. ...

"This was a defective procurement, with significant financial consequences, and I am determined that the reasons for it should be exposed and understood; that those responsible should properly be held to account; and that it should never happen again."

Earlier contracts

The earlier contracts with the US consortium Nuclear Management Partners (NMP) were awarded in a way that ministers and departmental officials demonstrably tried to circumvent Parliamentary oversight. A Parliamentary debate led by Labour MP Paul Flynn held on 19 November 2008 exposed how the Public Accounts Committee (then under a Conservative chairman) effectively colluded in the deal.3

Flynn was denounced by the then energy minister, Mike O'Brien, for traducing ministers with allegations of "some sort of cover-up." Actually, Mr Flynn's allegations turned out to be under-estimations of calumny.

The Public Accounts Committee only later properly probed the procurement scandal in October 2013, using documents I secured from the NDA ‒ via long-running freedom of information applications ‒ comprising a hitherto secret internal KPMG audit of Sellafield's operations.

The full sorry story is told in a January 2015 article in The Ecologist.4

An absurd footnote on the contempt with which these US-led consortia hold the British taxpayers who have funded their so-called management contracts for clean-up and Sellafield remediation comes with the revelation in expenses receipts sent to the NDA by departing NMP executives. A Canadian researcher FOI'd NDA for the expenses claims and obtained the details of how one NMP executive billed £714 for his cat to be transported by taxi cab from Sellafield to Heathrow, en route to the US.

You just could not make it up!


1. 27 March 2017, 'UK nuclear decommissioning debacle costs taxpayer nearly £100m',

2. Greg Clark (Secretary of State for Business, Energy and Industrial Strategy), 27 March 2017, 'BEIS Non-Departmental Public Bodies: Written statement - HCWS554',

See also: New Judgment: Nuclear Decommissioning Authority v EnergySolutions EU Ltd (now called ATK Energy EU Ltd) [2017] UKSC 34, UK Supreme Court Blog 11th April 2017,


4. David Lowry, 19 Jan 2015, 'Sellafield ‒ how the nuclear industry fleeced taxpayers',

Is nuclear power in crisis, or is it merely the END?

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

In the last issue of Nuclear Monitor we reported on the crippling debts facing nuclear industry giants1 ‒ French utilities EDF and Areva, Japanese conglomerate Toshiba and its US-based nuclear subsidiary Westinghouse ‒ and on pro-nuclear responses to the nuclear power crisis.2

Is crisis too strong a word? Nuclear advocates and lobbyists are increasingly using that language. A February 22 piece in the online investment publication Seeking Alpha states: "The global nuclear power generation industry is in crisis. The nuclear power companies are not undertaking many new ventures while most of the projects in progress are on the rough patch."3

Michael Shellenberger from the Breakthrough Institute has recently written articles about nuclear power's "rapidly accelerating crisis"4 and the "crisis that threatens the death of nuclear energy in the West".5 Environmental Progress, another pro-nuclear lobby group connected to Shellenberger, has a webpage dedicated to the nuclear power crisis ‒ among other things, it states that 151 gigawatts (GW) of worldwide nuclear power capacity (38% of the total) could be lost by 2030 (compared to 33 GW of retirements over the past decade), and over half of the US reactor fleet is at risk of closure by 2030.6

A recent article from the Breakthrough Institute and the like-minded Third Way lobby group discusses "the crisis that the nuclear industry is presently facing in developed countries" and the reasons why "the industry is on life support in the United States and other developed economies", and asserts that "the era of building large fleets of light-water reactors is over in much of the developed world."7 Another article from the same authors states that the nuclear power "crisis, at bottom, is the result of the industry's inability to adapt to changing economic, institutional, and technological realities."8

As a worldwide generalization, the nuclear power industry can't be said to be in crisis. To take the extreme example, China's nuclear power program isn't in crisis ‒ it is moving ahead at pace. However, large parts of the industry are in crisis. The US nuclear industry is in crisis, with no likelihood of new reactors for the foreseeable future (other than the four under construction) and a very old reactor fleet. Toshiba and Westinghouse are in crisis and their attempt to establish a Japanese/US reactor construction and export industry is in tatters.

The French nuclear industry is in crisis ... its "worst situation ever" according to former EDF director Gérard Magnin.9 The French industry faces multiple serious problems domestically, and its EPR export ambitions are "in tatters" as Bloomberg noted in 2015.10 EDF and Areva would both be bankrupt if not for the largesse of the French state.

No-one would dispute that Japan's nuclear power industry has been in crisis for the past six years, with no end in sight.

Combined, the crisis-ridden US, French and Japanese nuclear industries account for 45% of the world's 'operable' nuclear reactors according to the World Nuclear Association's database, and they accounted for 50% of nuclear power generation in 2015 (and 57% in 2010).11

Countries with crisis-ridden nuclear programs or phase-out policies (e.g. Germany, Belgium, and Taiwan) account for about half of the world's operable reactors and more than half of worldwide nuclear power generation.

The Era of Nuclear Decommissioning (END)

The aging of the global reactor fleet isn't yet a crisis for the industry, but it is heading that way. In many countries with nuclear power, the prospects for new reactors are dim and rear-guard battles are being fought to extend the lifespans of aging reactors that are approaching or past their design date.

Perhaps the best characterization of the global nuclear industry is that a new era is approaching ‒ the Era of Nuclear Decommissioning (END). Nuclear power's END will entail:

  • a slow decline in the number of operating reactors (unless growth in China can match the decline elsewhere);
  • an increasingly unreliable and accident-prone reactor fleet as aging sets in;12
  • countless battles over lifespan extensions for aging reactors;
  • an internationalization of anti-nuclear opposition as neighboring countries object to the continued operation of aging reactors (international opposition to Belgium's aging reactors is a case in point13);
  • many battles over the nature and timing of decommissioning operations;
  • many battles over taxpayer bailouts for companies and utilities that haven't set aside adequate funding for decommissioning;
  • more battles over proposals to impose nuclear waste repositories on unwilling or divided communities; and
  • battles over taxpayer bailouts for companies and utilities that haven't set aside adequate funding for nuclear waste disposal.

As discussed in Nuclear Monitor #837, nuclear power is likely to enjoy a small, short-lived upswing in the next couple of years as reactors ordered in the few years before the Fukushima disaster come online.14 Beyond that, the Era of Nuclear Decommissioning sets in, characterized by escalating battles (and escalating sticker shock) over lifespan extensions, decommissioning and nuclear waste management. In those circumstances, it will become even more difficult than it currently is for the industry to pursue new reactor projects. A positive feedback loop could take hold and then the industry will be well and truly in crisis.

Recent bad news for the nuclear industry

If nuclear power isn't yet in crisis, it is heading that way. Just in the past month there has been a steady stream of bad news for the industry ‒ summarized here.

Of course the most significant news over the past month was Toshiba's February 14 announcement that it was booking a US$6.3 billion (€5.9bn) writedown on its US nuclear subsidiary Westinghouse and exiting the reactor construction industry.1 Reuters reported on March 1 that Toshiba is seeking legal advice as to whether Westinghouse should file for Chapter 11 bankruptcy.15 But even under a Chapter 11 filing, Reuters reported, "Toshiba could still be on the hook for up to $7 billion in contingent liabilities as it has guaranteed Westinghouse's contractual commitments".

Toshiba plans to sell profitable businesses to cover the debts from Westinghouse's multi-billion dollar cost overruns building AP1000 reactors in the US. Toshiba would likely sell Westinghouse if it could find a buyer, but even if a buyer could be found Toshiba would likely be stuck with the mounting debts from the US AP1000 projects due to contractual obligations.

Commercial operation dates for the two AP1000 reactors in Vogtle, Georgia have been pushed back by another three and six months ‒ the new start-up dates are December 2019 and September 2020.16 Originally, completion of the reactors was scheduled for 2016 and 2017. There is plenty of scope for further delays and cost overruns. Already, the combined cost overruns for the four AP1000 reactors in the US (two each in Georgia and South Carolina) amount to about US$11.2bn (€10.7bn).17

Georgia Power, 45.7% owner of the Vogtle AP1000 project, has suspended plans for another nuclear plant in Georgia, with more than US$50 million of ratepayers' money already wasted on the Stewart County project.18

The Nikkei Asian Review reported on February 20 that Toshiba plans to pull out of the plan for two Advanced Boiling Water Reactors at the South Texas Plant.19 The reactors were scheduled to be completed as early as 2016 but work never began and likely never will. Toshiba booked writedowns totaling 72 billion yen (US$638 million at current rates) on the project in fiscal years 2013 and 2014.

The UK pro-nuclear lobby group New Nuclear Watch Europe said in late February that there is a danger that no new nuclear capacity will come online in the UK before 2030, and that the subsidies on offer to support new reactors are insufficient and need to be expanded.20 The lobby group pointed to:

  • delays with the EPR reactor in Flamanville, France and the possibility that those delays would flow on to the two planned EPR reactors at Hinkley Point in the UK;
  • the lack of investors for the proposed Advanced Boiling Water Reactors at Wylfa in Wales;
  • the acknowledgement by the NuGen (Toshiba/Engie) consortium that the plan for three AP1000 reactors at Moorside faces a "significant funding gap"; and
  • the fact that the Hualong One technology which China General Nuclear Power Corporation hopes to deploy at Bradwell in Essex has yet to undergo its generic design assessment.

The Financial Times reported on March 2 that French company Engie booked a €1bn impairment on its nuclear decommissioning provisions in Belgium.21

The start-up dates for two EPR reactors in China's Guangdong province have been pushed back another six months.22 The project is several years behind schedule ‒ construction began in 2009/10 and the original schedule for start-up in 2014/15 has been pushed back to 2017/18.23

On March 1, French utility Areva posted a €665 million (US$700m) net loss for 2016.24 Losses in the preceding five years exceeded €10 billion (US$10.5 bn).25 A large majority of a €5 billion recapitalization scheduled for June will come from French taxpayers.26

On February 14, French utility EDF released its financial figures for 2016: earnings fell 6.7%, revenue declined 5.1%, net income excluding non-recurring items fell 15%, and EDF's debt remained steady at €37.4 billion.27 All that EDF chief executive Jean-Bernard Levy could offer was the hope that EDF would "hit the bottom of the cycle" in 2017 and rebound next year.28 The French government provided EDF with €3 billion in extra capital in 201629 and will contribute €3 billion towards a €4 billion capital raising this year.27,28

EDF is being forced to take over parts of its struggling sibling Areva's operations ‒ a fate you wouldn't wish on your worst enemy. And just when it seemed that things couldn't get any worse for EDF, a fire took hold in the turbine room of one of its Flamanville reactors on February 9 and the reactor will likely be offline until late March at an estimated cost of roughly €1.2m per day.30

And that's just some of the nuclear industry's bad news over the past month ...


1. Nuclear Monitor #838, 21 Feb 2017, 'Nuclear industry for sale ‒ renovator's dream?',

2. Nuclear Monitor #838, 21 Feb 2017, 'Pro-nuclear perspectives on the nuclear industry crisis ‒ 'an unusually grim outlook'',

3. 22 Feb 2017, 'Exelon Will Survive The Nuclear Crisis',

4. Michael Shellenberger, 13 Feb 2017, 'Why its Big Bet on Westinghouse Nuclear is Bankrupting Toshiba',

5. Michael Shellenberger, 17 Feb 2017, 'Nuclear Industry Must Change ‒ Or Die',


7. Josh Freed, Todd Allen, Ted Nordhaus, and Jessica Lovering, 24 Feb 2017, 'Is Nuclear Too Innovative?',

8. Josh Freed, Todd Allen, Ted Nordhaus, and Jessica Lovering, 28 Feb 2017, 'Do We Need An Airbus for Nuclear?',

9. Adam Vaughan, 29 Nov 2016, French nuclear power in 'worst situation ever', says former EDF director,

10. Carol Matlack, 17 April 2015, 'Areva Is Costing France Plenty',

11. WNA, 1 March 2017, 'World Nuclear Power Reactors & Uranium Requirements',

12. David Lochbaum, 2004, 'U.S. Nuclear Plants in the 21st Century', Union of Concerned Scientists,

13. Nuclear Monitor #834, 24 Nov 2016, 'Belgium: Legal action to close Tihange 2 reactor',

14. 31 Jan 2017, '2016 in Review: The nuclear power renaissance ‒ blink and you'll miss it', Nuclear Monitor #837,

15. Reuters, 1 March 2107, 'Toshiba asks law firm to advise on potential Westinghouse bankruptcy cost: sources',

16. WNN, 24 Feb 2017, 'Vogtle operation dates rescheduled',

17. 2 Feb 2017, 'Toshiba-Westinghouse: The End of New-build for the Largest Historic Nuclear Builder',

18. Dave Williams, 2 March 2017, 'Georgia Power suspends work on proposed Stewart County nuclear plant',

19. Nikkei Asian Review, 20 Feb 2017, 'Toshiba pulling plug on US nuclear reactor plan',

20. NucNet, 27 Feb 2017, 'Former Minister Warns Of 'Real Danger' Facing UK Nuclear Projects',

21. Michael Stothard, 2 March 2017, 'Engie reports drop in profits as it books €3.8bn in impairments',
22. WNN, 22 Feb 2017, 'China revises commissioning dates of EPRs',

23. Stephen Stapczynski and Aibing Guo, 15 March 2016, 'China's Areva-Designed Nuclear Reactors to Start Up in 2017',

24. Michael Stothard, 1 March 2017, 'Areva posts €665m net loss in 2016',

25. Mycle Schneider, Antony Froggatt et al., 2016, 'World Nuclear Industry Status Report 2016',

26. Geert De Clercq, 1 March 2017, 'French group Areva's 2016 loss narrows, received no claims over Creusot foundry',

27. Michael Stothard, 14 Feb 2017, 'EDF earnings hit by low electricity prices and nuclear problems',

28. Geert De Clercq, 14 Feb 2017, 'EDF targets positive cash flow ahead of French, UK nuclear projects',

29. Paul Brown, 2 Dec 2016, 'Taxpayers face bill for nuclear crisis',

30. Adam Vaughan, 21 Feb 2017, 'EDF faces £1m a day bill to keep French nuclear reactor offline',

How much will it really cost to decommission the aging French nuclear fleet?

Nuclear Monitor Issue: 
Paul Dorfman

A recently published French governmental report has blown a significant hole in the French nuclear decommissioning strategy. The report, on the technical and financial feasibility of dismantling nuclear facilities, was produced by the National Assembly's Commission for Sustainable Development and Regional Development.1

In late January, the Committee took evidence from the EDF head of decommissioning and me. Given the Commission had been working on this for months, and had listened to mounds of complex data, I decided to cut to the chase and make as clear an argument as I could. What follows is that evidence.

How much have France, Germany and UK set aside for decommissioning?

Whereas Germany has set aside €38 billion to decommission 17 nuclear reactors, and the UK Nuclear Decommissioning Authority estimates that clean-up of UK's 17 nuclear sites will cost between €109‒250 billion over the next 120 years, France has set aside only €23 billion to decommissioning its 58 reactors. To put this in context, according to the European Commission, France estimates it will cost €300 million per gigawatt (GW) of generating capacity to decommission a nuclear reactor ‒ far below Germany's assumption of €1.4 billion per GW and the UK estimate of €2.7 billion per GW.

How can EDF decommission at such low cost?

EDF maintain that because of standardization of some of the reactors and because there are multiple reactors located on single sites, they can decommission at a low cost. Does this claim stack up? Well, probably not. Reactors are complex pieces of kit, and each has a differing operational and safety history. In other words, nuclear reactor decommissioning is essentially a 'bespoke' process.

Who will pay?

Germany has made multiple provision, enrolling the reactor owners involved ‒ EnBW, EOn, RWE and Vattenfall ‒ to pay into a state-owned fund to decommission the plants and manage radioactive waste. The UK Government will pay most of the costs for nuclear decommissioning and existing waste. In France, EDF must pay for it all. For the French, the big question is: Has EDF set aside enough money to cover the huge cost of dismantling and cleaning up its existing nuclear power stations?

EDF says it wants to set aside a €23 billion fund to cover decommissioning and waste storage for an estimated €54 billion final bill ‒ and the difference between these two figures will be closed through the appreciating value of its equities, bonds and investments ‒ in other words, 'discounting'. Discounting involves hoping that the value of these equities, bonds and investments will increase over time. Unfortunately, recent experience has taught us that markets can go up and down over time ‒ especially the very long-time periods involved in radioactive waste management.

Why has EDF underestimated the costs of decommissioning and waste storage?

Even EDFs €23 billion limited provision for decommissioning and waste storage is a large sum of money for a company that has huge borrowings and enormous debt, which is currently running at €37 billion. Already, Standard and Poor and Moodys (the two biggest international credit rating agencies) have downgraded EDFs credit-worthiness over the corporation's potentially ill-advised decision to go ahead with attempting to construct two more of the failing Areva reactor design (the EPR) at Hinkley Point, UK. And any significant change in the cost of decommissioning would have an immediate and disastrous impact on EDFs credit rating ‒ something that the debt-ridden corporation can simply not afford.

EDF's other financial woes

EDF is already in financial trouble. Along with bailing out the collapsing French nuclear engineering design company (Areva), not only must EDF bear the huge financial burden of their failing reactor new-build at Flamanville, but also pay for extending the life of France's existing nuclear power stations (to 2025), at a cost of €55 billion.

Meanwhile, the estimated cost of radioactive waste management is steadily rising. There are three elements to the waste costs: decommissioning; spent fuel and waste storage (and conditioning) prior to disposal; and spent fuel and waste disposal.

The French nuclear regulator (ASN) says that storing and disposal are much bigger and costlier problems than just dismantling the reactors. This is because nuclear waste (high and medium level waste, including spent fuel) must be dismantled and moved to a new facility, which has not even begun to be built yet. And the French authority tasked with disposal of all the countries vast and increasing waste burden (Andra) has recently ramped the estimated cost for the planned national nuclear waste repository at Cigéo, to €25 billion ‒ and EDF must pay for most of Cigéo's construction. Although €5 billion more than EDF anticipated, it still seems a gross underestimation, and the costs are likely to rise considerably.

Spent nuclear fuel build-up

Then there's EDF's existential problems at France's high-level waste storage and reprocessing facility at La Hague, where spent nuclear fuel stores are reaching current cooling capacity limits. This means La Hague may now have to turn away spent fuel shipments from France's reactor fleet. In any case, since ASN has identified safety problems with some spent fuel transport flasks, spent fuel transport to La Hague has substantially slowed. All this means the build-up of spent fuel at nuclear sites across France, with the associated problem of cooling the spent fuel at those sites during dry summer periods, with all that means for further escalation of rad-waste costs.

French National Assembly Commission findings

Happily, and perhaps unexpectedly, when the National Assembly's Commission for Sustainable Development and Regional Development published its final key findings last month, they came down on the side of those who voiced concerns about EDF's provisioning for reactor decommissioning and waste management, noting that there is "obvious under-provisioning" regarding "certain heavy expenses" such as taxes and insurance, remediation of contaminated soil, the reprocessing of spent fuel and the social impact of decommissioning.

The Commission found that the clean-up of French reactors will take longer, be more challenging and cost much more than EDF anticipates.

The Commission reported that EDF showed "excessive optimism" in the decommissioning of its nuclear power plants. "Other countries have embarked on the dismantling of their power plants, and the feedback we have generally contradicts EDF's optimism about both the financial and technical aspects of decommissioning," the report states. The cost of decommissioning "is likely to be greater than the provisions", the technical feasibility is "not fully assured" and the dismantling work will take "presumably more time than expected".

Critically, the Commission's report says that EDF arrived at its cost estimate by extrapolating to all sites the estimated cost of decommissioning a generic plant comprising four 900 MWe reactors, such as Dampierre, noting that: "The initial assumption according to which the dismantling of the whole fleet will be homogeneous is questioned by some specialists who argue that each reactor has a particular history with different incidents that have occurred during its history".

So what now?

Soon EDF will have to start the biggest, most complex and costliest nuclear decommissioning and radioactive waste management programme on earth. It seems very likely that ‒ for various reasons associated with its current bank balance ‒ EDF may have seriously underestimated the real challenges and costs, with serious consequences for its already unhealthy balance sheet. This will have profound consequences for the French State, which underwrites EDF.

The National Assembly's report (in French) is posted at

Dr Paul Dorfman is Honorary Senior Research Associate, Energy Institute, University College London (UCL); and founder of the Nuclear Consulting Group (

German court rules on reactor shut-down compensation

Nuclear Monitor Issue: 
Diet Simon

German taxpayers should pay nuclear power companies "appropriate compensation" for the government order to shut them down by 2022, the country's highest court ruled on December 6.

The Federal Constitutional Court (Bundesverfassungsgericht) didn't put a figure on the compensation entitlement, but the industry talks about €19 billion (US$19.8 bn). Eon said the accelerated nuclear phase-out policy will cost it €8 billion, RWE did not provide any information but analysts estimate its claim at €6 billion euros, while Vattenfall claimed €4.7 billion.

The companies did not argue that they should be allowed to operate reactors for longer, but that they should be compensated. About 70% of Germans regularly reject nuclear power in opinion polls.

After the 2011 Fukushima disaster, the government of Angela Merkel, backed by the then opposition Social Democrats and Greens, rescinded the longer reactor operating lifespans approved in December 2010 and set earlier closure dates for each of the 17 power reactors. Eight closed immediately, nine are due to close by 2022.

The power companies argued that this is an unconstitutional expropriation. The Federal Constitutional Court ruled that the decision to reduce reactor lifespans was constitutional and that it did not constitute expropriation, but that it amounted to a restriction of the companies' property rights and that compensation should therefore be paid.

Eon, RWE und Vattenfall, the companies that brought the case, may prefer to use the entitlement as a bargaining chip in the ongoing acrimonious dispute over who pays for disposing of nuclear waste, the producers of it or the public. That is, credit the entitlement against whatever waste disposal cost is set.

Public money helped set up nuclear power and, one way or another, public money will also pay for the 'clean-up', if that's possible, of the nuclear waste.

On December 15, Germany's coalition government, with the support of the Greens, passed a law regulating the long-term costs of nuclear waste management. As discussed in Nuclear Monitor #833, power companies will pay €23 billion into a government-controlled fund and they will be off the hook for any future cost increases. A leading regional newspaper blasted the deal as "a nasty deal at the taxpayers' expense". 140,000 people have so far signed a petition: 'We're not paying for your waste'.

Activists are especially mad at Jürgen Trittin, a senior Green and former environment minister, who co-headed the group that wrote the law. Trittin knows that the clean-up funds fall far short of what's needed, wrote Jochen Stay, a leading activist.

Parliament will vote on scrapping a tax on nuclear fuel on 1 January 2017. The Social Democrats have said they'll campaign in next year's election to bring the tax back in, but if they have to share government with the conservatives again, that's likely to gurgle down the drain again like it did in the present coalition.

Stay's .ausgestrahlt group said in a December 15 statement: "The Bundestag will decide today that in future the general public will have to pay for the nuclear waste, and not those who for years made billions with their nuclear power stations. The power companies can buy themselves out with a once-only payment. At the same time the parliament is highly likely to throw out a motion to extend the tax on nuclear fuel."

EU assistance for decommissioning nuclear plants Bulgaria, Lithuania and Slovakia

Nuclear Monitor Issue: 
WISE Amsterdam

In the frame of their European Union accession nego­tiations and in view of increasing nuclear safety, Bulgaria, Lithuania and Slovakia committed themselves to the early clo­sure and subsequent decommissioning of eight 'non-upgradeable' nuclear reactors. The European Court of Auditors found that progress has been slow, no comprehensive assessment of future needs exists, and available funding is plainly insufficient. The Court recommended making conditional any further support upon an evaluation of the EU added value.

The special report “EU Financial assistance for the decommissioning of nuclear plants in Bulgaria, Lithuania and Slovakia: Achievements and Future Challenges” by the European Court of Auditors, deals with the implementation of the decommissioning programmes from 1999 up to the end of 2010. The main objective of the Court’s audit was to "assess the effectiveness of the EU funded programs (1999–2010) in con­tributing towards the decommissioning of the nuclear reactors and addressing the consequences of their early closure." The EU provided financial assistance to the three country-programs: 2 850 million euro overall for the 1999-2013 period. The main vehicles for EU funding for decommissioning of the 8 reactors were the TACIS (providing technical assistance to the partner States in eastern Europe and central Asia) and the PHARE programs (supporting financial and technical cooperation with the candidate central and eastern European countries).

Meanwhile, Bulgaria (Kozloduy 1-4), Lithuania (Ignalina 1-2) and Slovakia (Bohunice V1 1-2) have closed the reactors between 2002 and 2008 in line with their commitment, the main process is still ahead and its finalisation faces a significant funding shortfall.

The conclusions are devastating:

(a) As a result of a relatively loose policy framework, the programmes do not benefit from a comprehensive needs assessment, prioritisation, the setting of specific objectives and results to be achieved. Responsibilities are diffused, in particular with regard to monitoring and the achievement of programme ob­jectives as a whole. The Commission’s supervision focuses on the budgetary execution and project implementation.

(b) There is no comprehensive assessment concerning the progress of the decom­missioning and mitigation process. De­lays and cost overruns were noted for key infrastructure projects.

(c) Although the reactors were shut-down between 2002 and 2009, the pro­grammes have not yet triggered the required organisational changes to al­low the operators to turn into effective decommissioning organisations.

(d) Currently available financial resources (including an EU contribution until 2013 worth 2,85 billion euro) will be insuf­ficient and the funding shortfall is sig­nificant (around 2,5 billion euro)!

The Court recommends that:

(a) The Commission should put in place the conditions for an effective, effi­cient and economical use of EU funds. It should establish a detailed needs as­sessment showing the progress of the programmes so far, the activities still to be performed and an overall financing plan identifying the funding sources. Before further spending takes place, the Commission should analyse the resourc­es available and the expected benefits. This should lead in turn to objectives being aligned with the budget made available and to the establishment of meaningful performance indicators which can subsequently be monitored and reported on as necessary.

(b) Should the EU decide, as proposed by the Commission, to provide further fi­nancial assistance in the next multi-annual financial framework, this sup­port should be made conditional upon an ex ante evaluation of the EU added value of such intervention, identifying the specific activities to be financed through the EU budget and taking ac­count of other funding facilities such as Structural Funds.

Delays and Cost-overruns
As at 31 December 2010, the programs had launched 101 projects which contributed towards the decommissioning of the eight reactors. The total value of these projects, which were almost exclusively funded by the EU, was 1 125 million euro.

An analysis of the infrastructure projects shows delays and cost overruns. In particular, key projects within the critical path of the decommissioning process are delayed, for example facilities for spent fuel and radioactive waste management (i.e spent fuel storage facili­ties and facilities for radioactive waste treatment, storage and final disposal).

In March 2011 the recipient Member States updated their de­commissioning cost estimates, to reach 5,3 billion euro. A comparison with the decommissioning funding currently avail­able at national and programme level suggests a shortfall of around 2,5 billion euro.

Slovakia has committed itself to topping up the funding need­ed for decommissioning and has created a specific funding mechanism (a tax on electricity transmission) to contribute towards reducing the funding shortfall. Lithuania and Bulgaria have not put in place any equivalent mechanism. The absence of sufficient funding arrangements puts the completion of the decommissioning processes at risk.

Sources: European Court of Auditors Special Report No 16/2011 “EU Financial assistance for the decommissioning of nuclear plants in Bulgaria, Lithuania and Slovakia: Achievements and Future Challenges”. Available at:


In brief

Nuclear Monitor Issue: 

Russia to invest heavily in Namibia.
Russia is ready to invest US$1-billion in uranium exploration in Namibia. "We're ready to start investing already this year," the head of state corporation Rosatom, Sergei Kiriyenko, told journalists. Rosatom seeks to compete for projects with global miner Rio Tinto in the African country. Earlier in May, Russia and Turkey signed a US$20-billion project for Moscow to build and own a controlling stake in Turkey's first nuclear power plant.

Namibia, the world's fourth-largest uranium producer, is home to the Rossing mine operated by Rio Tinto, which together with Paladin Energy's Langer Heinrich mine accounts for about 10% of global output. Other firms have been joining the exploration drive, with several new mines due to come on stream in the next five years.

Although Russia plans to spent a lot of money on foreign nuclear projects, it is clear that there is not enough money to realize its domestic nuclear program. As described in Nuclear Monitor 707 the number of reactors planned to be built by 2015 will be cut by 60%. And even that number will be hard to build.
Reuters, 20 May 2010

UK: Decommissioning black hole.
The new U.K. Government will have to find an extra £4 billion for decommissioning and waste management at the UK civil nuclear. Energy minister Chris Huhne said: "as you can imagine, this is a fairly existential problem. The costs are such that my department is not so much the department of energy and climate change, as the department of nuclear legacy and bits of other things." He added that there were "genuine safety issues" so the costs could not be avoided. As a result, the Government is considering extending  the life of some of the UK's oldest reactors as a way of raising extra income for decommissioning. Extending the life of the reactors owned by the NDA would raise extra income. The Wylfa reactor on Anglesey, for example, is due to close at the end of the year, but extending its operating life for another two years would mean £ 500 million (US$ 736 million or 598 million euro) in new revenue. The NDA is also considering extending the life of the Oldbury reactor, first opened in 1968. Any application to extend the life of reactors would have to be approved by safety regulators.
N-Base Briefing, 9 and 16 June 2010

France: Subcontractors not in epidemiological surveys.
French antinuclear network 'Sortir du nucléaire' supports nuclear industry subcontractor and whistleblower Philippe Billard. As a spokesperson of the organisation 'Santé / Sous-traitance' (“Health and Subcontracting”), he has undergone some retaliation measures after having denounced workers exposure to radiation. As a  whistleblower, he’s now treated as persona non grata in nuclear power  plants. His employer refuses to re-instate him at his previous job, in  contradiction with the Labour Inspectorate’s recommendations.

The French antinuclear network “Sortir du nucléaire”, considers Philippe Billard’s ousting as a means to put pressure on whistleblower workers. “Sortir du nucléaire”  decided to bring its support to the workers who, just like Philippe Billard, suffer from the unbearable working conditions imposed by the nuclear industry and undergo irradiation without even receiving appropriate health care.

To protect its corporate image, EDF chose to give subcontractors the most dangerous tasks. These people working in the shadows have insecure jobs and are mostly temporary and/or nomad workers. Every year, 25,000 to 30,000 of them are made to carry out tasks where they are exposed to radiations. This system allows EDF to cover up a huge health scandal, since these subcontractors, who get 80% of the annual collective dose from the whole French nuclear park, are not taken into account in epidemiological surveys! (See: Annie Thébaud-Mony, « L’industrie nucléaire organise le non-suivi médical des travailleurs les plus exposés », Imagine, May-June 2007)

EDF is shamelessly multiplying talks on transparency while hushing up workers whistle blowing about the imminent catastrophe. In the ageing French nuclear park, the accident risk is increasing, all the more since maintenance periods are shortened in order to save time and money. However, the official motto remains “Nothing to report” and short-term profits are more important than common safety and security.
Press release 'Sortir du nucleaire', 31 May 2010

Switzerland: Thousands march against nuclear power.
More than 5,000 people gathered in Goesgen, canton Solothurn, in northern Switzerland on May 24, for a peaceful protest against the continuing development of nuclear energy in the country. The protest had participants from 83 groups in Switzerland, France, Germany and Austria. One of their key points was that Switzerland’s nuclear power plans are preventing the rapid development of alternative energy programs. The demonstration was one of the largest in last years.

Another subsidy for Areva in the U.S.
"As part of a broad effort to expand the use of nuclear power in the United States and reduce carbon pollution," the U.S. Department of Energy has approved a US$2 billion loan guarantee for French nuclear power developer Areva S.A. (owned for about 93 percent by the French State). The loan guarantee will support Areva's Eagle Rock Enrichment Facility near Idaho Falls, Idaho, which will supply uranium enrichment services for the U.S. nuclear power industry. Areva's US$3.3 billion nuclear enrichment facility will use centrifuge technology instead of gaseous diffusion technology that is more common in the U.S. but uses more energy. Areva had filed its application for the guarantee with the Department of Energy in September 2008.

The group can tap the guarantee once its Idaho Falls project has received full approval by the authorities. The Nuclear Regulatory Commission is expected to decide sometime next year on a licence for the facility. Areva plans to have the plant in operation in 2014. 

The United Stated Enrichment Corporation (USEC) is also seeking a loan guarantee for its American Centrifuge Project under development at Piketon, Ohio. Following DOE's announcement the consensus would seem to be that 'd be bad news for USEC. But according to USEC spokesman Paul Jacobson that is not the case. Jacobson said USEC was encouraged that DOE recognizes the need for more enrichment services to supply the nuclear needs of the future. He also noted that DOE, as noted in the federal agency's press release, still has another US$2 billion in loan authority available. At one time, USEC was going head to head with Areva for the loan guarantees, and USEC played up the foreign-owned company versus domestic company, etc., but now the company -- on the public front at least -- seems to be focused on the nuclear renaissance and the idea that there's enough demand in the U.S. and abroad to support multiple new ventures in the enrichment arena.
U.S. DOE, 20 May 2010 / Reuters, 20 May 2010 / Atomic City Underground, 21 May 2010

EC: investigation non-compete clauses Areva, Siemens.
The European Commission has opened an antitrust case to determine whether non-compete clauses in civil nuclear technology arrangements between Areva of France and Germany's Siemens violate EU competition rules. The opening of antitrust proceedings on June 2, means that the EC thinks the case merits investigation. EC competition spokeswoman Amelia Torres said an investigation was triggered by a complaint from Siemens after Areva took full control last year of reactor construction and services company Areva NP, a joint venture originally set up by Framatome (which later became Areva) and Siemens in 2001. But non-compete clauses between the two companies remain, even though Siemens sold its 34% stake to Areva last year.

The shareholders' pact between Areva and Siemens for Areva NP is not public, but a French official familiar with it confirmed that it forbids either party from competing with the other in businesses covered by Areva NP for eight years after a potential divorce.

Siemens said in January 2009 that it intended to exercise its option, to sell its 34% stake in Areva NP to Areva and leave the joint venture. A few weeks later, Siemens said it had signed a memorandum of understanding on a nuclear power business partnership with Rosatom, a Russian state-owned nuclear conglomerate. After bilateral discussions failed to produce an agreement on the price at which Areva would buy the 34% stake in Areva NP, the erstwhile partners last year asked an arbitration court to decide the matter.

EC competition spokeswoman Amelia Torres said the investigation would be carried out by the EC at EU-level, rather than by national governments. There is no timescale for the investigation as this depends on the complexity of the case and the extent to which the parties cooperate. Torres said she was not able to prejudge whether a fine would be imposed if the arrangement were found to be in breach of competition rules.
Platts, 2 June 2010

U.K.: Waste costs 'not acceptable' for industry.
The nuclear industry has been heavily lobbying to change proposed charges for managing wastes from nuclear reactors. Papers released under Freedom of Information show how the French company EDF pressed the previous government to change the proposed 'high fixed cost' for managing wastes and the timetable for handing the management of wastes to the Nuclear Decommissioning Authority. The previous government made significant changes to the way it proposed changing companies for managing their wastes. It also agreed that responsibility for wastes should pass to the NDA after 60 years instead of the original 110 years. This would reduce the financial liabilities and costs for companies.

EDF told the government the original proposals were "non-acceptable" and made it uneconomic to develop new reactors.
N-Base Briefing 665, 9 June 2010

Chubu delays Hamaoka-5 restart after earthquake.
Japan: The Chubu Electric Power Company has extended the closure of its 1,380-megawatt Hamaoka No.5 reactor by a further two months to the end of July. Chubu Electric said the decision had been taken because the company is still analyzing why the impact of the August 11, 2009 earthquake on the reactor was greater than for other nuclear units. The company explained that, based on this measure of earthquake ground motion, the impact of the tremor was significantly higher than for other reactors. Chubu Electric will report its findings to the Ministry of Economy, Trade and Industry. It hopes to restart the reactor after METI and other government  agencies have agreed the report and local communities have consented to the restart of the reactor. The restart of the No. 5 reactor was originally planned for the end of December 2009, but pushed back several times.
Power in Asia 555,  27 May 2010

Bangladesh: cooperation agreement with Russia.
The government of Bagladesh has increased momentum for the installation of the country’s first nuclear power plant. The US$1.5-billion project will be built at Rooppur, about 300 kilometers from the capital Dhaka. A committee headed by the state minister for science and information and communication technology, Yafes Osman, has been constituted to implement the project. The 22-member committee, which has the chairman of the Bangladesh Atomic Energy Commission as its member secretary, will examine funding issues and assess the risks associated with the fiscal arrangements. It will also study nuclear waste management issues. Bangladesh plans to install the 2,000-megawatt plant (for US$1.5billion?) at Rooppur from 2017. It signed a five-year framework cooperation agreement with the Russian atomic energy company Rosatom in May, with the final agreement due to be signed during Prime Minister Sheikh Hasina’s visit to Moscow later in 2010.
Power in Asia 555, 10 June 2010

Go-ahead for Urenco's Eunice plant.
The US Nuclear Regulatory Commission (NRC) has authorized the operation of the first cascade at Urenco's Louisiana Energy Services (LES) gas centrifuge enrichment plant at Eunice, New Mexico. LES is a wholly owned subsidiary of URENCO Ltd. Urenco said the process to bring the plant from construction status to fully operational will begin later in June. The Urenco USA plant (formerly the National Enrichment Facility)  will be the first commercial centrifuge enrichment plant to become operational in the USA. Urenco formally inaugurated the plant in early June. "At full capacity, the facility will produce sufficient enriched uranium for nuclear fuel to supply approximately 10% of the electricity needs for the US", according to the Urenco press release.
Urenco Press release, 11 June 2010