The command and control centres of the national authorities are usually set up to respond to every kind of emergency situation and therefore their technical capabilities are not specifically designed for responding to nuclear emergencies. These centres are equipped with powerful and versatile com­munication devices, and are directly connected with other centres to respond to national crises at the highest level. The mission of these centres is to provide the political support, strategic coordination, public information management and international contacts needed to manage the emergency. In the case of activation of a nuclear emergency plan, representatives from different ministerial organizations are convened to this centre to facilitate a response that involves several government functions such as civil protec­tion, public security, health, environmental protection, industrial policy, finance and international relations. A key role of these centres is the coor­dination among public authorities at local, regional and national level, which could be a crucial element to ensuring a proper use of available resources for the implementation of emergency measures.

The main reason for reprocessing is to separate the remaining uranium and plutonium in the fuel from fission products and transuranic elements other than plutonium, so that these materials can be reused as material for new

14.3 Relative radiotoxicity of the different components in spent nuclear fuel from a light water reactor irradiated to 41 MWd/kg U with respect to the radiotoxicity of the corresponding uranium ore (NEA, 1999c).

fuel (plutonium mixed with uranium in Mixed Oxide (MOX) fuel and reprocessed uranium re-enriched in so called ‘reprocessed uranium’ (REPU) fuel). In this process also the volume of high-level waste and the long-term toxicity is reduced. By more advanced reprocessing, that is not yet in use, it could also be possible to remove the transuranic elements and some long-lived fission products from the waste, thus further reducing the radiotoxicity. The intention would then be to burn (nuclear incineration) the removed components in a fast neutron reactor or another fast flux nuclear facility, e. g. an accelerator driven reactor (ADS).[84]

The waste from the reprocessing includes the high-level waste containing the fission products and transuranic elements other than plutonium, the metal components of the fuel element (fuel cladding, end pieces and spacers), and secondary process and maintenance waste. In the end decom­missioning waste will also be generated.

The solution of fission products and transuranic elements is concentrated and then mixed with glass-forming components and melted to become a glass matrix (vitrification), which is poured into a metal container that is subsequently sealed and kept clean on the outside. This is the main HLW. Most of the radioactivity of the fuel remains in the HLW.

The metal components of the fuel element are further cleaned to mini­mize the remaining fuel oxide in this waste stream. After compaction or cementation the metal components are filled in tight containers similar to the HLW and handled in a similar way as HLW or ILW.

The process and maintenance waste is physically similar to such waste from a nuclear power plant (see Section 14.2.4). There is, however, an important distinction as the fuel is dissolved in the reprocessing plant and the systems and components are exposed directly to the fuel material. Some of this waste could thus contain significant amounts of long-lived radionu­clides and would therefore be classified as ILW.

Reprocessing of one year’s fuel from a 1000 MWe LWR will generate 2-3 m3 of vitrified HLW and some 10 m3 of ILW and LLW. Some ILW and LLW will also be generated in the MOX fabrication facility.

In the last three decades both the utility and financial markets have changed in important ways. On the utility side, the rules have changed substantially. The new conventional wisdom is that progress means deregulating quasi­monopolistic markets and unbundling transmission, distribution and gen­eration so that there is full competition among electricity generators and full choice for customers. While full deregulation, unbundling and competi­tion are not yet established in most countries, this model affects financing considerations for new power plants. Thus the market risk for utilities has changed and will continue to change, even as demand for their product, electricity, continues to grow. Moreover, in liberalized energy markets, investment has become a private sector affair, again with direct implications for finance.

On the financial side, international capital markets have become increas­ingly global and competitive. While the basic types of equity and debt finance have not changed, a variety of new financial instruments and pack­aging schemes have evolved to better mitigate risk exposure, assure returns on investments and attract investors to specific projects. Access to global capital markets can be beneficial for public and private sector utilities alike, though it also has its downsides of being subjected to its short-term whims and market conditions.

An investment in a nuclear power plant will normally be led by a large utility or special-purpose entity. Other utilities, large-scale electricity users, vendors or simple investors may join the venture for different motives. Other utilities may wish to expand their portfolio by taken ownership and selling their share of electricity or gaining experience with nuclear power. Large-scale electricity users may wish to secure long-term (and low-carbon) supplies at predictable costs. Vendors may participate as part of the sales package, thus not only easing finance for the utility but also assuming a role in risk sharing. Straightforward investors provide finance with the objective of earning adequate returns.

Options

There are three basic ways in which a plant construction project can be structured, all of which have been used in the power sector: government (sovereign), corporate (balance sheet) and limited recourse (including project) finance (shielding sponsors’ non-project assets from liability for project obligations). Government finance can come either straight from the annual budget, from government-issued securities (e. g., bonds) or from funds borrowed by the government in national or international capital markets. The terms of any non-budget approach depend on the country’s overall credit rating. The government-owned utility will be the owner (and likely operator) of the plant. Any future operating profit will go to the government budget. Direct government involvement in a nuclear power project, e. g., asset ownership, equity participation, risk sharing and provision of various incentives including loan guarantees, imposes a certain degree of risk on the public sector itself (and thus society at large). The government may also incur indirect or non-finance-related risks, such as obligations to maintain infrastructures or assume the liability for plant and site decom­missioning and spent fuel waste management.

Corporate financing means financing the project from the utility’s (and partners’) own resources, i. e. accumulated undistributed past profits, current revenue and from loans taken against existing assets. All participants (except lenders) will directly own and share the plant as an asset. The lead utility is the likely plant operator but will have to share the net proceeds (or whatever the arrangements foresee) with its partners. From the perspec­tive of lenders, balance sheet finance secures their loans against all the assets of the utility and partners, not just the investment project. Plant owners may be able to exclude a portion of their assets from serving as potential collateral by ring-fencing parts of their corporate structures. But limiting the collateral increases the lenders’ risks and lenders, in turn, will demand higher returns (interest) or decline providing loans at all.

The utility (and co-owners) assume the bulk of the investment risk against their asset base. Any problems with the plant such as construction delays, plant completion, commissioning or operational availability places these assets directly at risk. The financial sector tends to respond to a utility’s nuclear investment decision by downgrading its credit rating, increasing its cost of borrowing across the board. With a likely (nominal) investment outlay of $10 billion to $14 billion for a twin-unit nuclear power station, a complete failure would put most utilities at the brink of bankruptcy.

Limited or non-recourse finance (also known as project finance) involves the foundation of a separate corporate entity for the sole purpose of con­structing a power plant to be either sold after completion or operated for future revenue generation. Participation in the project occurs by putting up equity (i. e., buying shares) in the corporation. The corporation may seek loans for the plant construction from the financial sector or private inves­tors but, given that the collateral is limited to the shares in the corporation itself (in other words the plant), the prospects for loans are generally slim or exquisitely expensive. Shareholders in the corporation, however, only risk the equity they put into the project while their other assets are protected.

Project sponsors do have some options for generating equity among themselves, either as good-faith money or to supplement available invest­ment. One source of equity could be balance sheet financing. Another pos­sibility could be to expand the number of equity partners to include partners who could provide equity in kind, or for principal customers to become major shareholders as a way of assuring security of supply. For Olkiluoto-3 in Finland, this latter approach made possible a 25% equity share. Another mitigating option is for sponsors to recruit local equity financing for local content.

The key differences among them are the ownership pattern they estab­lish, which in turn governs the degree to which they protect the interest of investors and creditors, and the ways in which they allocate risk. Theoretically, any combination of entities, financing schemes and debt and equity could be considered for investment in the electricity industry, or for a nuclear power plant. In practice, this has not been the case. Non-recourse or limited — recourse financing, for example, offers no recourse collateral to lenders except the future income and assets of the project itself, and so tends to be used for renewable energy or less capital-intensive projects with shorter construction times and more flexible assets (e. g. natural gas turbines), rather than for capital-intensive investments like hydro projects and nuclear power plants. Schemes like public-private partnerships (PPP), build-operate — transfer (BOT), build-own-operate (BOO), and their variations, define the ultimate ownership of a project but are not really financing schemes (other than transferring finance obligations from the government-held utility to the private sector entity or partner in the investment venture).

The planning systems of most States will provide some form of community benefit mechanism whereby promoters can suggest (or be required to provide) social benefits to the communities that will be affected by the siting of the nuclear installation. The Finnish experience is instructive and their system of community benefits played a key role in helping to over­come public opposition to the Onkala geological disposal waste repository. Like other jurisdictions, UK planning law allows applicants to enter into binding agreements with local communities to provide benefits in recogni­tion of the burden that they shoulder on behalf of wider regional and national interests. Community benefits are increasingly viewed as an inte­gral part of the public engagement process. Applicants will need to consider their provision at an early stage. These funding commitments also existed under the old consenting regime as well. Whilst the discretion to offer such benefits is wide, the ability of local authorities to demand such arrange­ments is narrower. Government guidance (paragraph B5 of Circular 05/2005) sets out a number of tests which must be met before planning obligations can be required by local authorities and provides that they ‘must be relevant to planning; necessary to make the proposed development acceptable in planning terms; directly related to the proposed development; fairly and reasonably related in scale and kind to the proposed develop­ment; and reasonable in all other respects’. Although these obligations operate vis-a-vis local authorities, they will no doubt be an important influ­ence on IPC decision-making.

18.2.1 Selection of the contractual model

At the beginning of the project implementation phase, one of the most important decisions that a new owner will have to make will be the selection of the contractual model under which the future nuclear power plant is going to be purchased.

Indeed, the contractual approach determines how the project manage­ment, design, equipment procurement, construction and commissioning management will be organised, and the extent to which the owner will be involved in these activities. It also establishes the distribution of risks and responsibilities between owner and vendor, for the successful outcome of the project.

The contractual model selected by the owner will have a significant influ­ence on the structure and contents of some of the BIS documents, more particularly those dealing with scope of supply, project implementation and draft contract.

In the past, one of the following contractual approaches has usually been adopted for nuclear power plant acquisition:

1. Turnkey contract. A single supplier or a consortium of suppliers takes full responsibility for the delivery of the complete plant, ready for oper­ation. The turnkey contractor therefore has complete responsibility for carrying out all phases of the project, from project management, engineering and design to procurement, construction, testing and commissioning.

2. Split package contract. Overall responsibility for the supply of the plant is divided among a reduced number of contractors. The owner places separate contracts for different portions of the plant (e. g. three or four large supply packages). Each of these contractors is responsible for the project management, procurement, construction, testing and commis­sioning of his own package or portion of the plant. The owner, on his own or with the assistance of an architect-engineering firm, takes respon­sibility for overall project management and integration of the design, construction and commissioning of the various packages. Following are some typical split-package contracting approaches, according to the number of packages the plant is divided into:

• Two-package approach: the nuclear island (NI) is contracted sepa­rately from the turbine island (TI).

• Three-package approach: package 1 corresponds to NI without civil works; package 2 is the TI without civil works; package 3 corresponds to the civil works for the NI and TI, contracted directly by the owner.

• Three-package approach: package 1 is the NI and TI without civil works; package 2 is the BOP outside NI and TI without civil works; package 3 consists of the civil works.

3. Multiple package approach. The owner, on his own or with the assistance of an architect-engineering firm, assumes full responsibility for the engi­neering and design of the plant, as well as for the overall project man­agement, equipment procurement, and plant testing and commissioning. The owner issues a call for tenders and places an order for the nuclear steam supply system (NSSS) and turbine-generator packages, based on which he develops the engineering and design of the complete plant, usually with an architect-engineering firm. He then issues a large number of contracts, with specifications prepared by the architect-engineer, to mechanical and electrical equipment vendors (e. g. for piping, valves, pumps, heat exchangers, electric motors, switchgear, instruments, and controls) and to construction and erection contractors at site. Sometimes also referred to as ‘contract by components’, this contracting approach has been extensively used in several industrialised countries by owners with experience in the handling of nuclear projects and in the direct management of other types of large complex projects such as fossil-fired power plants.

The choice of the preferred contractual approach depends on a variety

of factors, some of which are listed below:

• Owner experience and knowledge in project management of similar projects, such as large fossil-fired power plants

• Local conditions available in the user country, including engineering, construction and erection capabilities, national infrastructures, qualified human resources, and whether a single nuclear unit or a series of them are planned for the user country

• Experience in the user country of a pool of reliable equipment manu­facturers and contractors with experience in the different contractual approaches

• Project costs, competitiveness and risks associated with each contractual approach

• Financing requirements and risk exposure perceived by lenders, depend­ing on the contractual approach under consideration.

Regardless of the contractual approach finally selected, the owner will have to work closely with his project management team. Although substan­tial, the owner’s involvement required under a turnkey contract is smaller than that required under other contractual approaches, and basically con­cerns project execution follow-up and contract administration and control, until the plant is turned over to him. The owner’s involvement, risk and responsibility are greater in the split-package approach, and are considered to be maximum in the case of the multiple-package scheme (contract ‘by components’). The degree of direct owner involvement also depends on the scope of work assigned to the architect-engineer assisting the owner.

Non-turnkey contracts have been largely used in countries where there is sound experience in large industrial projects. However, in countries that do not have experience in the handling of large complex projects or in heavy construction work, the turnkey approach seems the most suitable contractual model for the supply of a complete plant, and all the more so for owners from user countries planning to build their first nuclear unit. A good turnkey contract minimises the owner’s risks regarding cost overruns, construction schedule, quality of the work and plant performance. Moreover, a turnkey contract for the first nuclear unit(s) would constitute a good learning exercise towards gaining experience, and provide a basis for select­ing other contract approaches involving greater owner and local participa­tion, in the event of building more units in the country.

Typical information to be requested by the owner in the FR document for submittal with the financing proposal, for each financing source, when the buyer’s credit approach is applied is as follows:

• Source of financing

• Amount of loan

• Currency(ies) of the loan(s)

• Arranger and agent

• Lender(s)

• Drawdown period

• Grace period

• Starting date for repayment

• Payment schedule

• Payments, amortisations and interest rates

• Insurance premiums

• Financing of charges and fees

• Expenses

• Taxes

• Governing law

• Other terms and conditions.

The requested validity period of the financing proposal shall be at least the

same as that of the commercial proposal submitted by the bidder for his

scope of supply.

With the implementation of the human resources development actions outlined in Section 20.5.4 the RB staff can be expected to have achieved a reasonable level of technical competence to carry out the licensing review work. However, significant help from the ER will still be necessary in the licensing activities as well as in the regulation of the NPP for a few years after it goes into operation. Nevertheless, assistance from the ER during design safety reviews and in regulation of the NPP during operation should be in an advisory capacity, and the RB should assume full responsibility for all licensing decisions.

The operating organization should similarly obtain technical assistance from the reactor vendor during the various stages of licensing and also during the initial few years of NPP operation.

Peer reviews and OSART missions are performed infrequently. The indus­try has recognised that the stimulus provided by them starts to peter out after a while and with that comes a loss of momentum for improvement.

Many organisations have now developed nuclear oversight functions that conduct reviews based on the peer review POs and Cs using a similar meth­odology in which the review process is maintained.

Typically, nuclear oversight personnel are independent of any line func­tion and involve personnel with plant experience and preferably experience in the peer review process.

The University of Tokyo Global COE Program: Nuclear Education and Research Initiative (GoNERI) carries out research and education activities in three areas: nuclear energy, radiation applications and the social aspects of nuclear engineering.

Among GoNERI’s activities are the advanced summer school in radia­tion detection and measurements in cooperation with the University of

Berkeley (USA), the international summer school of nuclear power plants and young generation workshop, and the study on the international nuclear fuel cycle framework from a nuclear non-proliferation viewpoint.

A general understanding of the various designs of NPPs available like the boiling water reactor, the pressurized water reactor and the pressurized heavy water reactor needs to be obtained by national experts initially. This would help them appreciate the characteristics of each design in respect of capital cost, construction time, operability, safety, integration of the NPP in the electricity grid, requirement of manpower for operation, fuel require­ments and management of spent fuel and radioactive waste arising from operation. This understanding will enable them to have a proper interaction with prospective reactor vendors and help in the selection of the first NPP to be installed. It will also help them in explaining the justification for start­ing the nuclear power programme in the country to the public and the media.

After the decision on the NPP to be installed is made, a detailed study of the design must be done by the personnel in the operating organization, the regulatory body and the technical support organizations. It is extremely important to obtain a sound understanding of the design, not only for the operation of the NPP but also for the safety reviews to be conducted by the regulatory body before the various licensing stages of the NPP, viz. construction, commissioning and operation. Subsequently this understand­ing will be of great help in the effective and efficient regulation of the NPP during its operational lifetime. The construction group personnel should also learn the basic design of the NPP so as to be able to clearly understand and appreciate the need for maintaining high quality standards during construction.

During the review of the preliminary safety analysis report of the NPP design by the regulatory body, a number of questions will be raised and several clarifications will have to be obtained. In order to ensure that the queries are pertinent and focused, the regulatory body must have a good understanding of the design. In the absence of such understanding many trivial issues may get overemphasized that will result in loss of valuable time and the real issues getting eclipsed. It may also create a strained rela­tionship between the regulatory body and the operating organization, leading to generation of a tendency in the operating organization to hide information or to submit only the minimum required information. Such tendencies may undermine the very purpose of conducting the safety reviews. Mutual trust and professional respect between the operating organization and the regulatory body are essential for the proper and smooth conduct of the licensing process.

On the part of the operating organization it is essential that they ‘own’ the design such that the need for referring questions to the reactor designer is minimized. This is possible only when the design and the design basis are well understood and well appreciated by the operating organization. Such understanding of the design is possible only through an elaborate training of the operating organization as well as the regulatory body personnel that needs to be arranged by the NPP vendor. The training should also include hands-on operation training in a NPP of a similar design and the operating experience feedback from NPPs of similar design as also the applicable experience from NPPs of other designs.

The understanding of the design should be further improved during the commissioning of the NPP as this stage provides a unique opportunity for obtaining deeper insights of the design during testing of individual compo­nents and the integrated testing of systems. A sound understanding of the NPP design so developed will not only make the safety review process more effective and efficient but also be invaluable during the longer-term opera­tion of the NPP.