Decommissioning in Europe21 May 2019
Sanket Sanjay Sapate gives an overview of decommissioning opportunities in Europe, with key markets in Germany, France and Sweden
Nuclear energy has been one of the major contributors in the European energy mix contributing 27.2% in 2016. However, the governments in countries such as Germany, France, Spain, and others are planning to decommission some of their nuclear power plants.
According to Adroit Market Research, the global nuclear decommissioning market was valued at $37.5 billion and is expected to grow at a CAGR of 5.2% by 2027.
Nuclear power plants have an average operating lifetime ranging from 30-40 years. With most of Europe's reactors installed in 1960s and 1970s, many are approaching this age and will require upgrades and life extensions to continue operating.
Most of the countries prefer deferred dismantling and decommissioning of their nuclear facilities which may extend from 25 years to a century. However, there have been small but certain shifts towards immediate dismantling and decommissioning policy in a few countries. Recently, there seems to be an increasing tendency to favour immediate dismantling, particularly in the European Union.
In Italy there was a move from deferred dismantling to immediate decommissioning in 1999. Such a shift by other countries would prove beneficial for existing players in terms of attracting investments and improving profitability. In the current scenario long periods of inactivity during decommissioning projects have made it very challenging for the existing players.
Availability of multiple decommissioning projects would ensure continuous revenue stream from multiple activities, help spread operational risks, increase the efficacy of resources through occupational synergies and economies of scale. This would also accelerate the growth in the revenue of the market players, a portion of which could be invested in further development of technologies such as autonomous robots and drones for further reduction of cost, safety risks and ultimately profits.
In repsonse to the Fukushima Daiichi accident in March 2011, the German federal government has decided to end its nuclear power programme entirely and to phase out all of its nuclear power plants by 2022. Initiated in August 2011, government decision confirmed the immediate shutdown of eight units, with the rest to be shut down by 2022.
The early and simultaneous phase-out of German reactors has turned out to be challenging owing to high costs of decommissioning projects. Indeed, it will place substantial demands on Germany’s decommissioning expertise and infrastructure. It will also require the safe management of rather large volumes of decommissioning waste. Likewise, in Italy, owing to the referendum that followed the accident at the Fukushima Daiichi plant, termination of a potential new nuclear programme has been established by law.
High decommissioning costs coupled with nearly deadlines from previously proposed programmes has been creating tremendous pressure on the overall decommissioning projects. European countries are focusing on gathering funds to perform nuclear decommissioning. In order to complete nuclear decommissioning within Germany, in May 2018, the German cabinet agreed to grant $1.17 billion to utilities for Energiewende.
With more than 30 reactors within Germany, a potential market of $64.7 billion is expected to open during the course of decommissioning in next few years. Germany being actively planning to shut down 17 power station immediately, the project will be the largest decommissioning opportunity for key vendors within the market. Currently Germany has one facility available for disposal of radio waste at Konrad repository. The mine is being converted into disposal ground post decommissioning. Decommissioning of the operating nuclear reactors is expected to produce around 115,000 cubic metres of wastes.
In Germany, increasing demand for electricity resulted in an overload on nuclear reactors, including at the Brokdorf nuclear plant. In July 2017, a case was noticed that fuel rods were oxidised at the power plant owing to fluctuating outputs as a result of energy grid variations. Decommissioning of the power plant is planned for 2021.
In Germany, the utilities – Vattenfall, EON, RWE, and EnBW Energie Baden-Württemberg AG – are responsible for decommissioning and dismantling of reactors. However, the process will completely depend on funding’s given by utilities. The companies has kept aside EUR17.4 billion for the process.
Similarly, the French government is aiming on nuclear decommissioning in its Multiannual Energy Programme. The programem aims to reduce the contribution of nuclear power in the French energy mix by 25% by 2035. As a part of the programme, 14 power reactors will be shut down by 2035. However, a reduction in nuclear share does not imply a nuclear phase-out in France. The government is expected to propose mid plan by 2021 providing clearer view on decisions which may also include new construction projects of reactors. As of June 2016, EDF has allocated around $25.18 billion for waste management & decommissioning purposes. EDF has estimated $26.08 billion to decommission 58 reactors and EUR 54 billion for waste storage.
In Sweden, Uniper SE has taken the long-term and common strategy for dismantling of Barsebäck and Oskarshamn. As of December 2018, decommissioning of four reactors had begun. Decommissioning is expected to cost $1.1 billion. Players such as Cyclife Sweden and Finland's Fortum entered in a partnership to clean up nuclear power plants in Nordic countries. Through this partnership, the two companies will use their strong decommissioning experience offer efficient supply of services to the society. CYCLIFE which is a brand created by EDF is responsible for decommissioning and radioactive waste management.
Sanket Sanjay Sapate is a Research Analyst at Adroit Market Research