EURAD D12.4 - Guidance on cost assessment and financing schemes of RWM programmes
The accurate assessment of future costs for disposal facilities and the provision of financial resources form fundamental prerequisites for radioactive waste management. According to the generally adopted “polluter pays” principle, the waste generator is liable to cover the cost of the disposal of radioactive waste (including spent nuclear fuel, if considered as waste) that arises from a particular current or past nuclear activity.
The principle of intergenerational equality requires that past and present generations should not leave unfunded liabilities resulting from their activities to future generations. In radioactive waste management, the time differences between revenue generation and future expenditures for providing for the final disposal of this waste may extend to over a century. This means that it is crucial to have a sound cost estimation methodology for final waste disposal in place to minimise the risk of transferring financial liabilities to future generations.
The guiding principle is to ensure that the future costs of radioactive waste disposal are well understood and accurately assessed so as to be able to ensure adequate financial resources to cover these costs. Due to the large time spans involved, estimations should be regularly updated and reassessed in order to provide as reliable a cost estimation as possible. This guide focuses on cost assessment as the basis for providing sufficient funding for radioactive waste disposal programmes. Although national radioactive waste disposal programmes are created according to specific national conditions and may have differing legal frameworks, sizes of nuclear power programmes or other nuclear applications, future plans and societal circumstances, the need for the consistent and reliable cost estimation of the disposal programme is common to all.
Cost estimations are needed for all projects, programmes and operations. Information on this topic is abundant, and guidance on various approaches and methods is widely available. However, the estimation of the costs of disposal programmes remains challenging due to their complex and societally sensitive nature and long implementation periods, and practical guidance on this issue remains insufficient. Countries that are just starting to develop their disposal programmes and which have little or no experience in this area may have difficulties in finding the relevant advice on how to perform cost estimations. This guide aims to describe the cost estimation process specifically focusing on radioactive waste disposal programmes, and to provide practical advice on how to conduct this process so as to result in a consistent, reliable and well-documented cost estimation. The guide suggests a stepwise approach to costing to make the whole process more transparent and easier to manage. The steps are interdependent and logically cover all the important phases in the cost estimation from defining the purpose and scope of the estimate, selecting the method and obtaining the input data, to performing the cost estimation and the consideration of, including suitable approach to, addressing cost uncertainties and risks.
Additional benefits for potential users comprise the presentation of practical examples of how the work scope of the geological disposal programme should be broken down into smaller, meaningful elements and hierarchically organised in the form of a Work Breakdown Structure (WBS), and a discussion on the possible cost uncertainties and risks related to the various WBS elements of geological disposal programmes. The presentation of selected lessons learnt and experience obtained from the cost estimation processes of a number of national programmes may also be helpful for gaining a better understanding of the process.
Although the cost assessment presented in this guide focuses on geological disposal programmes, with certain adaptations it can also be applied to near-surface or borehole disposal programmes since the principles are the same and, from this prospective, the guide may also be beneficial for small inventory disposal programmes.
Projects involving various types of disposal facilities and waste inventories have been underway for many years in countries that have different economies. How financing is to be arranged is normally specified in national legislation, which stipulates the conditions that determine the scope of the calculation model used to arrive at the basis for the determination of fees, tariffs, levies etc.
According to national circumstances, countries may implement different financing schemes for radioactive waste management activities, all of which meet the aforementioned guiding principles. Taking into account the wide variety of financing solutions, this guide, instead of providing detailed guidance on financing, merely lists potential schemes and describes the financing of RWM activities from a pre-collected fund.
The Appendices provide further guidance information. Appendix A lays out examples of cost estimations to illustrate how the methodology works in practice. Appendix B includes a glossary of terms that are specific to costing. Appendix C describes the challenges and lessons learnt from past practices based on the screening of key references and provides references for further reading. The collected aspects in this appendix can assist end-users who are about to start cost assessment process and develop or improve their financing schemes for radioactive waste management.