The nuclear provisions

The Act of April 11, 2003 gave Synatom responsibility for ensuring coverage of the costs involved in:

  • managing irradiated fissile materials (spent fuel);

  • decommissioning the nuclear power plants.

The provision for managing irradiated fissile materials

This provision is meant to cover all the costs associated with managing spent fuel assemblies, from interim storage to final storage in deep geological repositories.

Synatom has developed mechanisms enabling it to establish the required financial resources in the course of the years, taking into account for example the lives of Belgium's seven nuclear reactors.

 

Did you know…

In 2011, the European Commission issued a Euratom directive aiming to establish a Community framework for the responsible and safe management of spent fuel and radioactive waste, which was transposed into Belgian law on June 3, 2014. It requires each EU Member State to establish a National programme. Belgium communicated a National programme for spent fuel and radioactive waste management to the European Commission for the first time in 2015. A progress report on implementation of the directive will be submitted to the Commission every three years.

 

The provision for decommissioning nuclear power plants

At the same time, Synatom establishes provisions for the operations needed to completely decommission the nuclear power plants.

How will decommissioning take place?

Decommissioning will entail three phases:

  1. performing final shutdown, emptying the systems and evacuating the fuel assemblies from the spent fuel pool – this stage is covered by the operating licence, extending over a period of around five years;
  2. decommissioning the facilities;
  3. returning the sites to their original condition (greenfield site).

The AFCN/FANC will issue a decommissioning permit encompassing the second and third phases. The period involved is expected to take approximately 10-15 years.

Synatom closely monitors the technological developments and operating experience of other nuclear operators. Studies have already been launched to determine the most effective strategies in this regard.

Total of the two provisions

In total, the two sets of provisions established by Synatom stood, on December 31, 2016, at 

Provisions 31.12.2016

 

Strict rules and ongoing checks

The Act from 2003 that made Synatom a nuclear provisioning company also established a Nuclear provisions committee. This commission is authorised to provide advice and to carry out checks on the actual existence, adequacy and availability of the provisions.

The Nuclear provisions committee has five full members (represented by their substitute as the case may be):

  • the Administrator-General of the Treasury at Belgium's FPS Finance;
  • the Chairman of the Management Board of the Electricity and Gas Regulatory Commission (CREG);
  • the Chairman of the Federal Public Service Budget and Management Control;
  • the Secretary-General of the National Bank of Belgium;
  • the Director-General of Belgium's Directorate-General Energy.

It also has three advisory members:

  • the Director-General of the Federal Agency for Nuclear Control (AFCN/FANC),
  • the Director-General of NIRAS-ONDRAF;
  • the CEO of Synatom.

The committee gives advice about issues such as:

  • methods for establishing provisions (and also periodically reviews the appropriateness of these methods);

  • the maximum percentage Synatom can lend to the nuclear operators;
  • the categories of assets Synatom invests in.

The committee also checks:

  • the data relating to the adequacy of the provisions;
  • the proper application of the methods for establishing the provisions;
  • the conditions under which Synatom lends its funds,
  • the availability of the funds.

Every three years, Synatom submits to the Committee a detailed dossier including the methodology for establishing provisions, its financial strategy and timing. This features not only economic calculations but also technical documents from the relevant nuclear operator.

The most recent dossier of this kind was submitted in September 2016 to the Nuclear provisions committee. This one has 90 days at one's disposal to express an opinion and relies in particular on the technical expertise of NIRAS-ONDRAF to analyse the dossier. It may then approve it or issue recommendations to bear in mind when drafting the next dossier.

How does Synatom manage these financial provisions?

In the Act of April 11, 2003, Synatom was given the task of managing the funds covering the provisions for decommissioning and for managing the irradiated fissile materials. This legislation also determines how Synatom can manage these funds:

  1. Synatom can make loans to the nuclear operators at the rates applied for commercial loans, going up to 75% of the total sum of the provisions. Each nuclear operator's credit quality is assessed and reviewed periodically via a debt ratio vis-à-vis the equity relating to a consolidated base, and a credit rating from an internationally renowned rating agency.

    Did you know …

    The Nuclear provisions committee can review the maximum percentage of funds the nuclear provisioning company can lend to a nuclear operator, at a higher or lower rate depending on how its credit quality develops in relation to these criteria, following a graduated transparent scale established in an agreement signed between the State, the nuclear provisioning company and the nuclear operators.

     

  2. Synatom can invest the balance in:

  • assets other than those of the nuclear operators, ensuring sufficient diversification;
  • loans to corporate entities other than the nuclear operators. Agreements lay down the conditions for loans and guarantees to be established by the beneficiaries of these loans for Synatom.

These agreements are submitted for approval to the Nuclear provisions committee, which checks their compliance with the provisions of the legislation.

To allow the Nuclear provisions committee to perform its duties, the nuclear provisioning company informs it each year of the sum of the provisions established for decommissioning and managing irradiated fissile materials, the valuation of the assets corresponding to these provisions, the expenditure for the three years ahead, the general thrust of its investment policy, and the international credit rating and debt ratio of the nuclear operator.

The Act from 2003 also requires Synatom to always keep sufficient liquid assets to cover all the expenditure associated with decommissioning and managing the spent fuel that is expected to arise over the next three years.

How to ensure that the sums provisioned by Synatom are sufficient

The provisions for decommissioning are established in such a way as to cover for each nuclear power plant the whole discounted amount of the decommissioning costs at the time of the plant's final shutdown.
The nuclear operators will take care of decommissioning on Synatom
's behalf, while Synatom for its part will be solely responsible for managing the irradiated fissile materials.

Every three years, Synatom submits to the Nuclear provisions committee a detailed dossier including:

  • a scenario that has been drawn up for decommissioning the nuclear power plants and managing the irradiated fissile materials;
  • a detailed assessment of the costs associated with this, and a timetable for the anticipated expenditure;
  • a calculation method for establishing the provisions, in line with discount and capitalisation rates following well-established practices in financial analysis.

Therefore, this dossier includes not only economic calculations but also technical documents from the nuclear operator and from Synatom.

Electrabel and Synatom are being assisted in carrying out this work by experts from the TRACTEBEL Engie design consultancy and are also calling on the international expertise of the engineering firm Siempelkamp NIS Ingenieurgesellschaft mbH.

The first dossier was submitted in 2004. The most recent was submitted in September 2016 to the Nuclear provisions committee. This one has 90 days at one's disposal to express an opinion and relies in particular on the technical expertise of NIRAS-ONDRAF to analyse the dossier. It may then approve it or issue recommendations to bear in mind when drafting the next dossier.