Only around a third of the money needed to build a nuclear repository is currently in the account. Costs will probably exceed the estimate

According to officials, building a deep nuclear waste repository, including its century-long operation, will cost CZK 130 billion. But it will probably be more. The nuclear account currently holds only CZK 36 billion, while ČEZ has so far paid around CZK 1.7 billion into it each year.

Czechia aims to select the final site for the nuclear repository by 2028. However, the funds currently set aside for it will probably not be sufficient.

“Like all construction projects, the cost of a deep geological repository is affected by the economic situation, for example rising energy, construction material and service prices. The currently valid estimated amount is CZK 130 billion and it will of course be updated,” says Martina Bílá, spokesperson for the Radioactive Waste Repository Authority (SÚRAO). She stresses that this is the cost of preparing the repository, construction, one hundred years of operation and closure, not just the construction itself.

This is not the only existing cost estimate. Based on 2017 data, experts at the Faculty of Electrical Engineering of the Czech Technical University in Prague calculated expenditure related to the deep geological repository at almost CZK 100 billion under current conditions, and at CZK 152 billion if new nuclear capacity is built. The higher figure assumes the addition of two nuclear units.

The more waste, the larger the repository

The aforementioned CZK 130 billion used by the repository authority also takes account of new nuclear capacity—indeed, three new units. However, the estimate is based on data from 2011 and the now outdated Radioactive Waste and Spent Nuclear Fuel Management Policy.

“The amount of CZK 129.7 billion is nothing new and does not include inflation or other changes,” says energy expert Edvard Sequens of Call – Association for the Preservation of Nature, which is a member of the Platform Against the Deep Geological Repository.

The cost of the repository will partly depend on the number of reactors generating nuclear power. The more reactors there are, the more nuclear waste there will be. “New nuclear capacity substantially increases the volume of radioactive waste produced, significantly extends the operating life of repositories and creates a need for additional investment to increase their capacity compared with a scenario in which new nuclear capacity is not built,” states the Czech Technical University analysis.

“The deep geological repository is currently sized, under the Radioactive Waste and Spent Nuclear Fuel Management Policy, for the six existing units at Dukovany and Temelín operating for sixty years, as well as for three new nuclear units envisaged by the State Energy Policy,” says Marek Vošahlík from the press department of the Ministry of Industry and Trade. Should Czechia proceed with a larger build-out, this will also be reflected in the repository’s sizing, he says.

Every country takes longer and spends more

Minister of Industry and Trade Jozef Síkela has even started talking about four new reactors. For now, however, these are only plans on paper, with a tender under way for just one new nuclear unit at Dukovany.

Recent experience abroad shows that building new nuclear units usually costs more than planned and takes longer to complete. Finland’s Olkiluoto 3 reactor, commissioned last year, was delayed by twelve years and its price was almost four times higher than planned.

“So far, construction has been approved for only one reactor at Dukovany, so it would be appropriate to calculate the costs of the deep geological repository for this scenario,” Sequens believes. The Czech government is due to decide within six months how many reactors it is counting on.

The 2019 World Nuclear Waste Report points out that governments and individual countries are unable to calculate the costs of nuclear repositories accurately (none is operating yet, while the Finnish one is closest to launch, in two years’ time, editor’s note).

“Governments are failing to properly estimate the costs of decommissioning, storage and disposal of nuclear waste due to fundamental uncertainties. Many governments base their cost estimates on overly optimistic discount rates and outdated data, leading to serious funding shortfalls in waste management,” its authors state, adding that no country has yet estimated costs accurately. They will therefore have to cover the gap between secured financial resources and estimated costs.

The costs of selecting, building and operating a repository do not rise in direct proportion to the volume of waste produced. Some so-called fixed costs are spread across a larger volume of stored material. According to experts at the Czech Technical University, repository construction costs will rise by 27 percent, while the amount of waste will increase by almost three quarters.

Not even a third of the money is there yet

The costs of the nuclear repository, from site selection and construction preparation to payments to municipalities, its century-long operation and monitoring, are to be paid from the so-called nuclear account. So far, it holds less than a third of the currently estimated costs. At the end of last year, it contained CZK 36.4 billion from fees paid primarily by the partly state-owned energy company ČEZ as a producer of nuclear power.

Under the Atomic Act, ČEZ pays CZK 55 for every megawatt-hour of nuclear power generated. This rate has applied since 2017. At the time, when the Atomic Act was being approved, a rate of CZK 80 per MWh was discussed, as proposed by the government together with the State Office for Nuclear Safety. However, an amendment by Social Democrat MP Jan Birke setting a lower rate was adopted.

The question now is how much the fee will need to increase. An analysis by the Faculty of Electrical Engineering of the Czech Technical University shows that without new nuclear capacity, the money in the nuclear account will not be enough. “If it were not built, the current fee of CZK 55/MWh would not be sufficient to cover all future costs of the radioactive waste management system,” its authors state. New capacity would mean more money from fees, plugging the existing funding gap as well. In the scenario without a new reactor, the fee should be CZK 78/MWh, according to the analysis. At the same time, it should be regularly indexed.

A legislative amendment is expected to resolve the fee increase

“In any case, it is necessary to increase the fee regularly in line with inflation. This can be done every approximately three to five years, with the fee raised by cumulative inflation. Keeping the fee unchanged for a longer period would again increase the risk of a funding deficit in the future,” the analysis states.

Co-author Jaroslav Knápek says it is appropriate to update the fee in connection with an update of the policy governing expenditure across the entire nuclear waste management system, which also incorporates plans for new reactors and electricity generation from the energy policy. “It is clear that expenditure on the future disposal of spent nuclear fuel is increasing. I expect updated estimates to be available in the near future,” Knápek adds, noting that the Czech Technical University does not have an updated analysis and is not currently cooperating with SÚRAO.

The Ministry of Industry and Trade confirms that it is preparing an amendment to the Atomic Act that will also adjust the fee paid into the nuclear account. However, it provided no further details.

“We expect an increase in the regular fee paid by all waste generators into the nuclear account, in the context of price-level developments. The manner in which the increase will be implemented is the subject of discussions during preparation of the amendment to the Atomic Act,” says Vošahlík from the Ministry of Industry’s press department. He adds that the State Office for Nuclear Safety is responsible for the Atomic Act and should know the details of the amendment.

“Setting the amount of the fees does not fall within our remit. We can only say in general that we are aware of the planned amendment and, during the consultation process, we will assess whether the fees make it possible to ensure radiation protection and nuclear safety in radioactive waste management,” says Lenka Babická from the authority’s strategy department.

“Analyses are currently under way to update the fee rate in connection with the inflation situation,” adds SÚRAO spokesperson Martina Bílá.

Martin Schreier from ČEZ’s press department says only that the company will “respect all obligations arising from any amendment to the Atomic Act and other applicable Czech legislation” regarding the planned indexation. According to him, ČEZ has paid CZK 35 billion into the account since 1997.

No one is yet taking faster construction into account

Another factor not yet reflected in the costs of building the deep geological repository is accelerated construction under EU taxonomy rules. These were adopted last year and require the repository to be completed by 2050. The original deadline was 2065. This change does not affect total costs, but rather their distribution over time and the earlier need for funding.

“If the repository’s commissioning is accelerated by a full fifteen years, spending will take place faster, meaning less money will be accumulated and less will also be earned through financial market operations,” Sequens believes.

However, Vošahlík argues that the nuclear account will have funds for construction of the deep geological repository even under the current fee arrangement and with the accelerated process. “The reason we are talking about increasing the fees is also to ensure future operations. The principle is that expenditure on radioactive waste disposal must be balanced by nuclear account revenue, primarily from waste-generator fees and investment returns,” Vošahlík explains.

A percentage of costs for municipalities too

The estimated costs of the deep geological repository also include payments to affected municipalities. So far, they have received two one-off payments of CZK 1 million each, but larger sums are planned for the future.

“When the first money came, around 2016, I do not remember exactly, all six municipalities in our area sent it back. We told them we considered it a bribe and did not want it. But they did not know what to do with it, so they sent it back to us,” recalls Václav Zábranský, mayor of Velký Bor in the Klatovy region. According to him, the municipalities have therefore placed the money in separate accounts and do not touch it.

Municipalities could receive further funding as early as this year, when so-called “exploration areas” are due to be approved at all four shortlisted sites. Such status must be approved by the Ministry of the Environment and is necessary for exploration work, including drilling, to begin at the site. The survey will then determine which site is most suitable.

For having an exploration area within their cadastral territory, municipalities will receive CZK 600,000 annually, plus additional funds based on the number of square metres affected by the survey. In the first phase, each will receive a total of millions of crowns per year. Municipalities where the repository is ultimately not built will also receive the money.

At the final site where the deep geological repository is built, municipalities will be entitled to CZK 4 million a year and CZK 10,000 for every cubic metre of nuclear waste stored. However, the money allocated to municipalities represents less than one percent of the total cost of the repository.

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Republished from the online portal EkoNews.cz, a website covering business and sustainability.