effective nuclear regulation from a utility perspective seminar “tuumaenergia efektiivne...
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Effective Nuclear Regulation from a Utility Perspective
Seminar “Tuumaenergia efektiivne reguleerimine”, Tallinn, 26 February 2010
Dr. Christian RaetzkeE.ON Kernkraft, Hannover
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Contents
Introduction: E.ON and Nuclear New Build
Part One: Some basics on regulation of nuclear power plants
Part Two: Nuclear Regulation from a utility‘s perspective: reducing regulatory risk
Part Three: Making use of international progress: design standardization
Part Four: Nuclear regulation trends in the EU
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Introduction: E.ON and nuclear new build
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E.ON Nuclear: Existing fleet
E.ON headquartersNPP operated by E.ON
NPP under dismantling and decommissioning
Installed capacity ≈ 11 GWEmployees ≈ 3.300Availability > 90 %
Power generation ≈ 80 TWh
21 units in operation (9 units operated by E.ON, 12 with minority shares)
5 units shut down / in decommissioning
NPPswith minority stakesNPPswith minority stakesNPPswith minority stakesNPP minority shares
Source: EKK (2008).
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E.ON Nuclear: New Build Activities
Finland
UK
France
Italy
Sweden
►New build footprint in countries with well-established nuclear excellence
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Project Development UK: Horizon NP
50/50-JV with RWE located in Gloucester Goal: appr. 6 000 MW by 2025 Acquisition of two sites: Oldbury and Wylfa Two reactor technologies under evaluation:
EPR (Areva), AP1000 (Westinghouse)
Gloucester
Status
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Project Development Finland: Fennovoima Oy
JV with Finnish partners, E.ON as the nuclear „backbone“
Decision in Principle application submitted in January 2009
Decision by Finnish Government / Parliament expected in 2010
Two sites proposed: Simo and Pyhäjoki Three technologies under discussion:
EPR (Areva)KERENA (Areva)ABWR (Toshiba)
Simo
Pyhäjoki
Status
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Dr. Michael Micklinghoff April 2009
Pre-selected reactor designs subjected to site-independent review activities at E.ON:
AP1000 (PWR)Westinghouse
KERENA (BWR) AREVA
EPR (PWR)AREVA
ABWR (BWR)Toshiba/Westinghouse
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Part One: Regulation of nuclear power plants
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Why is regulation of NPPs so specific? (1)
Safety
Demonstration of safety is paramount Exposure to radiation during normal operation Prevention of accidents with radiological consequences Long-term safety of waste/decommissioning
High international pressure and monitoring IAEA International conventions Peer reviews Pressure by EU and neighbouring states
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Why is regulation of NPPs so specific? (2)
Politics
Nuclear is highly political: licensing of NPP is not only an administrative procedure, but also a political issue
NPPs need a national infrastructure (nuclear regulatory system, waste concept, education facilities, supply chain, service companies etc.)
„Any expansion of a nuclear power programme will require strong and sustained government support“ (OECD Nuclear Energy Agency)
Licensing and supervision needs to be kept clear of day-to-day politics
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Why is regulation of NPPs so specific? (3)
Financing
Specifics of investment in NPP: higher share of investment in levelized electricity
generating costs higher cost of capital longer period of construction
It is crucial that regulatory and licensing risk is under control in order to give certainty to investors
► Predictable, streamlined, efficient and effective licensing process needed
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Main elements of a system of nuclear law and regulation General framework
regulatory body regulatory functions
Radiation protection Nuclear safety
safety of nuclear installations emergency preparedness and response safety of radioactive waste and spent fuel
management transport of radioactive material other items
Nuclear liability and coverage Non-proliferation and physical protection
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National Nuclear Law and Regulations: Hierarchy
International
Treaties
and
Agreements
Nuclear
Act
Decrees/Ordinances
Technical Regulations
Codes and Standards
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Safety of nuclear installations: International standardsTechnical regulations for NPPs are set by each country nationally, but the following need to be taken into account:
IAEA safety standards Mandatory for IAEA itself and for its activities (for example review
missions) Not mandatory for member states However, member states are expected to take IAEA safety standards
as a benchmark/model
WENRA reference levels WENRA: Western European Nuclear Regulators` Association In 2006, definition of appr. 300 Reference Levels RLs are basis for harmonization of national safety requirements Voluntary implementation in national regulations by 2010
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International conventions
Convention on Nuclear Safety Joint Convention (on the Safety of Spent Fuel Management
and on the Safety of Radioactive Waste Management) Non-Proliferation Treaty Vienna and Paris/Brussels conventions on nuclear liability etc.
Member states have to incorporate these treaties in their national law
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IAEA
Most visible in safeguards/non-proliferation Safety standards are models/benchmarks for national
regulations IAEA gives advice to newcomer countries how to install a
nuclear regulatory framework IRRS (Integrated Regulatory Review Service) missions: peer
reviews of a regulator by a team of fellow regulators, resulting in recommendations
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EURATOM
EURATOM Treaty 1957
Some legislation competences in the nuclear field
But: no European regulatory authority
Recent developments 2009 Directive setting up a Community framework for
nuclear safety ENEF, European Nuclear Energy Forum ENSREG, European Nuclear Safety Regulators Group
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Part Two: Nuclear Regulation from a utility‘s perspective: reducing regulatory
risk
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New World for Investment in Nuclear Power (1)
In earlier days TodayRegulated markets, guaranteed return on investment through fixed rates
Deregulated and competitive markets
State-owned utilities More and more utilities are private-owned (or at least managed to commercial principles)
One state-owned project owner Joint Venture, foreign investors invited
Investors need to be able to quantify risks, including regulatory and licensing risk, before making their
investment
New market conditions
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New World for Investment in Nuclear Power (2)Globalization
Emerging of multinational utilities International vendors, standardization of designs Vendor is in most cases a foreign company Applicant/licensee may be controlled/owned by a foreign
utility Money comes from foreign utilities, banks or credit
guarantee agencies
Harmonization of regulations, critical review of national procedures and cooperation of governments and regulators is mandatory
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What are the important issues for utilities today?Two main issues
1. Encouraging investment by reducing regulatory and licensing risk
2. Taking account of international aspects (indeed, profiting from them): standardization of designs multinational character of vendors and operators
These issues are closely related! Example: taking an internationally standardized design
facilitates the licensing procedure and makes it more predictable
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Regulatory and licensing risk
licence(s) delayed delay in schedule cost overrun (financing costs)
substantial re-design required in licensing process
cost overrun, delays trouble with vendor
construction licence not granted loss of investment incurred till then
operating permit not granted stranded investment
licence(s) cancelled by law court delay (if amended licence is issued) loss of investment (if not)
Some risks and their consequences
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Reducing regulatory risk
In order to mitigate those risks, the licensing and regulatory framework must ensure that decisions taken by the national regulators are
predictable proportionate stable in accordance with a pre-defined timescale nationally coordinated internationally aligned
The regulator must be strong with a clear policy, strong project management function, and adequate resources and staffing to deliver on its tasks
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Policy decision about nuclear energyDecision in principle about a particular NPP project
Licensing process (construction and operating licence)
site applicant
Surveillance and inspection during operation
design
The long road to licensing of a nuclear power plant
Pre-licensing: designs and/or sites
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Firm political decision („Decision in principle“)
A firm, legally binding basic decision on a project should be taken at the outset so that political issues are kept out of the licensing process, thus giving more certainty Finland: Decision in principle, endorsed by Parliament Switzerland: General Licence, endorsed by Parliament
and, as the case may be, by the People in a referendum
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Pre-Licensing
Design certifications (owned by vendors)
Design 1
Design 2Design 3
Site licences (owned by utilities)
Site BSite A
Pre-licensing (project-neutral) Licensing of particular NPPs
Design 2
Applicant
Design 3
ApplicantSite B
Site A
NPP 1
NPP 2
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Policy decisions and pre-licensing
(government incentives,e.g. loan guarantees)
design certificationearly site permit
US
UKWhite Paper
National Policy Statement
Multi-year plan on electricityproduction investment
Decision in principle
Generic Design Assessment(National Policy Statement)
(Generic letter on a designby ASN)
FIN
France
GER
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Pre-Licensing in smaller countries?
For a smaller country with only one or two NPP projects, pre-licensing should also be considered
Disadvantages only one design will eventually be built review of several designs consumes resources
Advantages review of several designs keeps competition between
vendors open pre-licensing facilitates the take-over of design approvals
from other countries
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Timeliness of licencing process
Sticking to a pre-agreed timeline is essential
Time is more important after start of construction work
What about Legal timelines? (“Decision about application must be taken xxx months after application is filed”)
For the political decision (decision in principle): probably not feasible
For nuclear licensing: Mandatory timelines are not a remedy for lengthy procedures They depend on a complete application being filed (which may be
subject to discussion) Consequences are doubtful (licence “deemed to be issued”?!?) Much more important:
►strong project management by government►strong staffing and resources of regulator (see UK)
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Nuclear licensing: one-step or stepwise? (1)
The main investment decision has to be taken when construction begins. At this point in time, there must be certainty that operation will be allowed. This can be assured by issuing one licence for construction and operation only: US: Combined construction and operating licence, COL UK: Nuclear Site Licence France: The “autorisation de création”, issued by
decree of government, is the main licence. The operating permit, issued “only” by the authority, is a predictable milestone.
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Nuclear licensing: one-step or stepwise? (2)
COL, Combined construction and operating licenceUS
UK Nuclear Site Licence
construction licence
operating permit
operating licenceFIN
France
GER 1st CL 2nd OL2nd CL 1st OL
autorisation de création
►start of construction
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Licensing: Managing a multitude of processes
For an NPP, a number of licences/permits/authorisations is neededNPP as nuclear installation Licence according to Nuclear ActNPP as large infrastructure projectPlanning permission, construction
permit, land use planning NPP as large electricity generator Licence according to Electricity
ActImpact on environment (general) EIA, separate permit (if
applicable)Conventional parts of NPP Separate permitCooling water (extraction and discharge)
Permit from water protection agency
Discharge of radioactivity Discharge permitModification of dyke/embankment Permit by coastal protection
authority► Strong government coordination and management required
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Safety of nuclear waste / spent fuel management (1)
To give certainty to all stakeholders, an overall national strategy (embedded in legislation and policy papers) is needed
Responsibility for waste management: Who does it? Who pays for it?
Who pays? The operator (polluter-pays principle) Accumulation of funds during operating lifetime of installation
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Safety of nuclear waste / spent fuel management (2)Who performs waste management activities?
Interim storage: operator or sometimes government agency Final disposal:
Sometimes operators or commercial waste management companies Sometimes a government agency (especially spent fuel repositories)
Final disposal of high level waste and spent fuel Deep geological disposal as only practical solution Discussion on multinational repositories for smaller countries
Further decisions to be taken on a national level Reprocessing to be allowed/prescribed? Import/export of nuclear waste and spent fuel to be allowed?
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Nuclear liability
Nuclear third party liability: liability for damage suffered by a third party (not the operator) caused by a nuclear incident
Firm and clear liability regime is important
Nuclear liability regime governed, for most countries, by international conventions: Vienna or Paris
convention (Estonia: Vienna Convention) or by national legislation (USA: Price-Anderson Act)
Nuclear liability regimes have some special features, aimed at Protection of victims Just and equal distribution of existing resources for compensation Compensation across national borders Enabling development of nuclear industry
Improved Licensing Procedures for NPP in Europe 13th May 2009 KK-NNR-Dr.Rae/Stb 37
The Finnish case (1): Licencing procedure
Decision-in-principleGovernment decision and Parliament ratification
Energy Policy
Construction LicenceGovernment, based on STUK safety assessment
Operating LicenceGovernment, based on STUK safety assessment
Nuclear Safety
Improved Licensing Procedures for NPP in Europe 13th May 2009 KK-NNR-Dr.Rae/Stb 38
The Finnish case (2)
Positive aspects Legislation and regulations fairly recent: Nuclear Energy Act
1987, Council of State Decisions 1991, Safety regulations (YVL guides) updated constantly
Decision in Principle as general political decision on an NPP project; the following licencing process can concentrate on nuclear safety
Two-step licensing (construction and operation) does not really seem to cause uncertainty
Very competent and respected authority (STUK) The overall Finnish licensing approach is good and does not
need to be overhauled
Improved Licensing Procedures for NPP in Europe 13th May 2009 KK-NNR-Dr.Rae/Stb 39
The Finnish case (3)Aspects which are not perfect
Many reasons for the delays in Olkiluoto 3 project are not specific to the Finnish approach, e. g. „first of a kind“ design, shortage in experienced personnel, lack of harmony between vendor and applicant etc.
Some regulatory issues: Construction licence issued at an early stage of design completion,
making further design work during construction necessary Some Finnish safety requirements deviate from the European
„mainstream“, leading to re-design and to uncertainty More openness to design and manufacturing standards of other
countries would be helpful Very strict requirements on management by licensee; risk of
inconsistency of STUK approach with a „turnkey contract“ model?
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Part Three: Making use of international progress: design standardization
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Reducing regulatory risk: design standardizationThe vision:
If a design is assessed and licensed in one EU country, authorities in other countries should not do it all over again
The goal should be mutual acceptance of design approvals or a joint design approval
This would reduce risk and uncertainty for the investor, once a First-
of-a-kind (FOAK) of a design is licensed in Europe reduce the strain on regulators make the licensing process more efficient and effective lead to a coherent approach to safety actually increase safety, due to a better basis for
experience feedback
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Vision: Pre-Licensing of designs in an international context
Design certifications (owned by vendors)
Design 1licensed in country A
Design 2licensed in country B
Design 3licensed in country C
Pre-licensing (project-neutral) Licensing of particular NPP
Design 2
Applicant
Site
NPP Validation
Design 1
Design 2
Design 3
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Existing regulatory/legal situation
Each reactor project needs a licence issued in a specific procedure after full assessment by the competent regulatory body
Licence is issued according to special national licensing procedures, which vary considerably
Licence is based on national safety requirements, which vary considerably in details
► This does not facilitate deployment of standardized designs across a range of countries
► A design approval in one country is irrelevant for others
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Initiatives for Cooperation and Harmonization Worldwide
MDEP (Multinational Design Evaluation Program): regulators of 10 new build countries worldwide
WNA CORDEL Group (Cooperation in Reactor Design Evaluation and Licensing): industry‘s response to MDEP
Europe: WENRA: safety reference levels to be implemented in
national regulations by 2010 EU Commission initiatives, including the recent Directive
on nuclear safety (see next chapter)
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The CORDEL proposal: 3 steps towards standardization
World Nuclear Association (WNA) Cooperation in Reactor
Design Evaluation and Licensing (CORDEL) Group Founded in January 2007 Membership: includes all major vendors and many utilities
interested in new build
CORDEL proposes 3 subsequent steps to achieve
international validity of design approvals and thus to
achieve full international standardization of reactor
designs
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Step 1: Share design assessment
design reviewdesign review design reviewdesign review
Regulator BRegulator BRegulator ARegulator A
design approvaldesign approvalby regulator Aby regulator A
design approvaldesign approvalby regulator Bby regulator B
shareshare
elements of design elements of design review, for example review, for example
calculations or calculations or modelling of event modelling of event
sequencessequences
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Step 2: Accept design approvals after validation
design reviewdesign review
validationvalidation
Regulator BRegulator BRegulator ARegulator A
design approvaldesign approvalby regulator Aby regulator A
design approvaldesign approvalby regulator Aby regulator A
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Step 3: Issue multinational design approval
Team of Regulators: A, B, CTeam of Regulators: A, B, C(or, much later, International Agency)(or, much later, International Agency)
design reviewdesign review
multinational design multinational design approvalapproval
Country ACountry A Country BCountry B Country CCountry C
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Some boundary conditions to be respected
Sovereignty of each country’s regulator has to be respected
Regulators are bound by law to apply their national safety requirements and licensing procedures
Regulators need to build up knowledge of the design
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Design approval as part of the overall regulatory processpolicy decision about nuclear energy
decision in principle about a particular NPP project
licensing process (construction and operating licence)
design site applicant
surveillance and inspection during operation
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A recent example for international design acceptanceItaly‘s new Act on Energy Companies, Act no. 99 of 23 July 2009, Art. 25, 2 i):
[Government is empowered to issue] a provision that licences relating to technical requirements and specifications for reactor designs which have been licenced in the past 10 years by the competent authorities in member states of OECD-NEA, or in states linked to Italy by bilateral agreements ... in the nuclear sector, will be considered to be valid in Italy after approval by the Nuclear Safety Agency
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Harmonization of national safety requirements• Absolutely necessary for standardization
• Differences are ever more difficult to justify (why should requirements of one country be “safer” than others....)
• However, combination and “piling up” of the strictest requirements to be avoided
• IAEA Safety Standards as a model
• Good opportunity for newcomer countries to start right away with regulations based on international consensus
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Part Four: Nuclear regulation trends in the EU
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European Commission Initiatives in the Nuclear Field
European Nuclear
Energy Forum
Opportunities, Risks
& Transparency
Politicians, Industry,
Politicians, Industry,
Finance, Civil society
Finance, Civil society
High Level Group (now ENSREG)
Safety Harmonisation& Waste Management
27MS 27MS Regulators/Safety Authoriti
es +EC
Regulators/Safety Authorities +EC
Sustainable Nuclear EnergyTechnology Platform
R & D – FP 7
Major nuclear Stakeholders,Major nuclear Stakeholders,
EC, Academics, ResearchersEC, Academics, Researchers
First Meeting, 12/10/07 Launched on 26/11/07
Launched on 21/09/07
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New EU Directive on nuclear safety
Directive 2009/71/EURATOM of 25 June 2009 establishing a Community framework for the nuclear safety of nuclear installations
Aims at „continuous improvement of nuclear safety and its regulation“ and at a „high level of nuclear safety“
Obliges Member States to establish and maintain a national legal and regulatory
framework establish and maintain a competent regulatory authority
with sufficient powers and resources ensure that licensees fulfil their responsability for safety ensure arrangements for education and training ensure that information is made available to the public
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Coming up? EU Directive on Nuclear Waste Stakeholder Consultation Process started ENEF WG „Risks“, SubWG „Waste Management“ is working
on a paper ENSREG is working on a paper
Some possible principles Each Member State has to establish a national plan for
management of radioactive waste and spent fuel Probably no timeframe set by EU, but national plans
should include a timeframe High level waste and spent fuel: deep geological disposal
required
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Subgroup „Nuclear Legal Road Map“ of European Nuclear Energy Forum (ENEF)
Work on licensing and harmonisation issues
Paper „The Importance of New Approaches in Licensing“ produced by the Subgroup in October 2008
Under preparation: Survey of licensing procedures in Europe
► Towards a licensing document of the EU?
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Summary
More efficient, more predictable and more harmonized licensing processes are vital to reduce licensing risk and to enable investment decisions in new nuclear projects
International alignment of approaches and regulations and international cooperation among regulators are needed to reflect the “international” world of licensing new reactors