Central banks might accomplish what anti-nuclear activists have failed to do — forcing operators to finally decommission almost 150 plants now sitting in limbo across the globe.
In the past, many operators delayed decommissioning to allow growth in the cleanup funds. However, as the global economy weakened and central banks kept interest rates low, the principle in some of those funds shrank.
Last year in the US, seven of the 10 biggest cleanup funds lost money, falling to US$43.7 billion, a drop of 1.1 percent.
Now, with projected costs rising, owners are more likely to opt for full decommissioning before the funds decline further, industry advocates said.
“One can’t rely as much on fund growth as in the past,” International Atomic Energy Agency (IAEA) decommissioning specialist Patrick Joseph O’Sullivan said. “It’s actually pushing utilities to think about bringing forward all this work because they’re not able to rely anymore on assuming high returns on investments.”
The change in emphasis comes 30 years after the April 26, 1986, explosion at the Chernobyl reactor spread radioactive fallout across Europe. That event, followed 25 years later by a meltdown at the Fukushima Dai-ichi nuclear power plant in Japan, undercut nuclear as a power generator as low-cost options such as natural gas and renewable energies became increasingly available.
A 2005 IAEA report forecast costs to shut a 1,000 megawatt reactor would range from 150 million to 750 million euros (US$169.37 million to US$846.86 million). In the US — the nation with the most decommissioning experience — actual costs have ranged from US$307 million to US$819 million, according to the Nuclear Energy Agency.
Twenty-four US decommissioning projects with site-specific estimates would require average cleanup funds of about US$750 million per reactor, the US Nuclear Regulatory Commission reported. Those costs jive with an estimate by Exelon Corp, which operates reactors at 15 US nuclear power plants.
Exelon estimates it will take US$1 billion to decommission its two-unit plant in Zion, Illinois.
It told shareholders in February that “sustained low market prices or depressed demand” could accelerate “asset retirement obligation expense related to future decommissioning activities.”
Exelon’s cleanup fund fell 2 percent to US$10.3 billion last year.
Utilities operating in Germany including EON SE, RWE AG and Vattenfall SE have set aside funds deemed “acceptable” by regulators to cover 47.5 billion euros of estimated costs to decommission the nation’s 17 reactors. Shares of those utilities jumped in February after reports that the German government would put in an additional 17.7 billion euros to help store the radioactive waste.
There are 438 nuclear reactors in operation worldwide and less than 4 percent of the power reactors built have been fully decommissioned.
Fewer still have figured out how to store waste for the thousands of years it will remain dangerous.
About US$200 billion is to be spent worldwide in the next 20 years on decommissioning the world’s aging fleet of reactors, said US nuclear engineer Thomas LaGuardia, who is helping establish decommissioning guidelines.
Nuclear operators that have not saved sufficient decommissioning funds might opt to put plants in safe storage until their accounts bulk up, he said.
Project management and environmental remediation companies in the US and Europe could see their markets grow as utilities draw down decommissioning funds to shut aging reactors, Swedish radiation safety analyst Simon Carroll said.
“One person’s cost is another man’s income,” he said.
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