The unknown, but ever rising, costs of decommissioning nuclear reactors

Nuclear Decommissioning Surge Is Investor Guessing Game, Bloomberg by Stefan Nicola in Berlin at snicola2@bloomberg.net; Julie Johnsson in Chicago at jjohnsson@bloomberg.net   editor responsible for this story: Reed Landberg at landberg@bloomberg.net 16 June 13 

Nuclear utilities thrust into the spotlight after the Fukushima meltdowns have ordered 20 reactors shut, the most in a three-year span since Chernobyl’s aftermath, saddling the industry with a possible $26 billion in costs.

EON SE and RWE AG (RWE) are leading the biggest decommissioning project by European utilities ever, an effort to tear down 12 reactors in Germany over two decades. Edison International (EIX) said June 7 it will never restart its idled two-unit San Onofre Generating Station outside Los Angeles, bringing the number of U.S. reactors permanently closed in a year to a record four.

The global utility industry faces its biggest test to prove enough money was saved for shutdowns, having undergone numerous cost-overruns building atomic plants. A cautionary tale can be seen with government-owned facilities. In Britain, where taxpayers are on the hook to retire the Sellafield complex’s seven reactors and fuel-reprocessing stations on the Irish Seaduring the next 100 years, the U.K. government this year doubled its estimate for the work to 67.5 billion pounds ($106 billion).

“There’s a lot of speculation how much these projects cost, but an exact estimate can only be given by utilities,” said Sascha Gentes, a Karlsruhe Institute for Technology professor specializing in atomic shutdowns. “The longer a nuclear decommissioning project takes, the more expensive it becomes.”

As China and India lead the world building reactors, with 35 under way, the West is ripping apart more than it’s erecting — with just 11 reactors under construction in the Americas and Europeexcluding Russia, World Nuclear Association data show.

Post-Chernobyl Dismantling

After the Chernobyl accident in 1986, the number of global shutdowns increased, reaching 23 in the 1990-1992 period, with most of those still in various phases of multi-decade dismantling.

Analysts generally don’t have enough data to produce independent cost estimates for closures, according to Daniel Seidenspinner, a B. Metzler Seel Sohn & Co. analyst.

“Decommissioning reactors that have operated for so long is uncharted territory, so it’s very difficult even for utilities to know much these projects will cost and how long they’ll take,” Seidenspinner said by phone from Frankfurt on June 7. “That can be an added risk for utilities.”

EON and RWE estimate individual projects may cost as much as 750 million euros to 1 billion euros ($1 billion to $1.3 billion), declining to reveal expenses for some work under way, in written replies to questions. At that rate, the total cost to the industry to close the 20 plants may reach $26 billion. Both companies say they’ve saved enough for their share…….

Nuclear decommissioning “has been a growth industry on and off,” Margaret Harding, a self-employed nuclear industry consultant based in Wilmington, North Carolina, said in a phone interview. “Right now, it’s big business.”….

Nuclear operators in the U.S., whose 100-reactor fleet is the world’s largest, have torn 12 units down to their foundations, scraping away radioactive soil and burying radioactive metal and concrete in low-level waste dumps, according to the nation’s Nuclear Regulatory Commission. Others are in the midst of such a process.

Long-Term Hibernation

Another eight reactors are cooling in a state of long-term hibernation, emptied of fuel, reducing radiation to safe levels that will simplify demolition and lower costs. The NRC allows decommissioning to take 60 years……

http://www.bloomberg.com/news/2013-06-16/nuclear-decommissioning-surge-is-investor-guessing-game.html

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