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Financing in 2014-2020

Financing framework

“RECOGNISING that the decommissioning of the Ignalina Nuclear Power Plant with two 1500 MW RBMK‑type reactor units inherited from the former Soviet Union is of an unprecedented nature and represents for Lithuania an exceptional financial burden not commensurate with the size and economic strength of the country and that this decommissioning will continue beyond the Community's current Financial Perspective […]” - Protocol No. 4 of the Accession Treaty of Lithuania to the European Union.

Lithuania complied with the requirements of the Treaty of Accession to the European Union to shut down Ignalina NPP and the EU committed itself to provide adequate additional financial assistance to the decommissioning. The EU members have recognized that the decommissioning of INPP represents for Lithuania an exceptional financial burden not commensurate with the size and economic strength of the country and the decommissioning will continue beyond the current financial perspective. It was declared that the Member States, in solidarity with Lithuania, are ready to continue to provide adequate additional Community assistance to the decommissioning efforts also after Lithuania’s accession to the European Union.

Outcomes of Ignalina NPP shutdown

Ignalina NPP closure has a negative impact on the national economy. Lithuania is already meeting many indirect costs of decommissioning (the price of electricity to consumers rose for 30 percent; energy dependence on a single supplier - Russia – for 80 percent). It is clear that there will also be continuing costs associated with management and storage of radioactive waste until long into the future.

Decommissioning costs

INPP decommissioning costs are inadequate, represent for Lithuania’s economy an exceptional burden and significantly exceed the currently identifiable resources.

The technical costs of Ignalina NPP decommissioning to 2029 have been assessed at 2011 prices. Forecasts made for cost increases have been based on best available macroeconomic data. Comparison with the Final Decommissioning Plan, prepared by international consultants, and with the well-advanced immediate dismantling of Greifswald NPP demonstrates that the calculated costs are sound and reasonable. In Lithuania's case, the volume of works and radioactive waste is significantly higher that at Greifswald NPP but the estimated financial support for the closure of the INPP is lower. At the moment the costs of Greifswald NPP already constitute 3.2 billion Euro.

The EU assistance by 2014

In accordance with its commitments, the EU has already allocated a contribution of 1 400 m Euro until 2014 and Lithuania has already allocated 50 m Euro. This financing is intended to be used:

The EU assistance in 2014-2020

In order to ensure proper funding of Ignalina NPP decommissioning process until 2029, 1 120 m Euro should be allocated additionally. In consideration of Lithuanian contribution, additional EU financial support is required (including risk provisions for investment projects) of which:

It should be noted, that additional financial support of 1 120 m Euro will be allocated exclusively to ensure adequate financing of the decommissioning process until 2029. Any other energy projects will not be financed from these funds.

Lithuania’s contribution

Lithuania’s national contribution to the financing of decommissioning process from 1999 to 2029 will compose about 320 m Euro (12%):

If indirect costs are also taken into account, the rate of Lithuania‘s national co-financing is more than equivalent to that expected in EU assistance to countries of Lithuania‘s economic strength.

!Problems

European Commission adopted a communication “A Budget for Europe 2020” with a budget line for nuclear safety and decommissioning containing 700 million Euro for 2014-2020. The proposed financial support is inadequately low – the funding need for INPP decommissioning alone is higher, however, the same budget line also contains funding for decommissioning in Slovakia and Bulgaria.

Lithuania reasonably expects that European Union will fulfil its obligation of solidarity to the Republic of Lithuania and its citizens by ensuring adequate financial assistance for decommissioning.

If the EU does not ensure proper financing of the INPP decommissioning process, Lithuania will not be able to provide necessary support for INPP decommissioning. It must be kept in mind that the costs will not disappear and that funding will anyway be needed in the future. Long-lasting decommissioning process will require higher amount of financial resources. Furthermore, insufficient financing may cause the risk that in the EU large quantities of spent nuclear fuel and radioactive waste will not be properly managed.

Lithuania‘s added value

The first-of-its-kind project is being performed at Ignalina NPP – dismantling of the energy units with graphite-moderated RBMK type reactors. The EU financial support will help not only to implement the Ignalina NPP decommissioning projects but also disseminate the accumulated experience Lithuanian specialists of dealing with graphite in other countries. Thus, finding solutions for the problem of irradiated graphite will provide more added value to each EU member state for funds spent.

With the understanding that the INPP decommissioning is a common EU project, Lithuania proposes for concerned companies from all the EU member states to participate actively in the INPP decommissioning projects and embrace the unique information and knowledge which was accumulated at the INPP. To this end, the Ignalina Carbon Competence Center is being developed at Ignalina NPP which will enable concerned companies to take advantage of RBMK type and other graphite reactors dismantling experience.

In order to achieve common goal, Lithuania wishes to ensure safe and timely decommissioning of Ignalina NPP. With regard to the Accession Treaty commitments, and in the context of the Ignalina Programme in the 2014-2020 financial perspective, Lithuania is seeking European Union assistance to bridge the funding gap by 2029.

“Safe decommissioning of nuclear installations, including the long-term management of radioactive waste and spent nuclear fuel, calls for substantial financial resources. A lack of these resources at the time they are needed may adversely affect the decommissioning process. Sufficient financial resources at the appropriate time should be available to allow complete decommissioning at nuclear installations in conformity with safety standards”. – Commission Recommendation 2006/851/Euratom.

European Commission: EU will give extra €500 million for the decommissioning of old Soviet type nuclear reactors

On 24 November 2011 the European Commission proposed to provide further EU assistance of €500 million to support the decommissioning in Bulgaria, Lithuania and Slovakia. These funds will contribute to the continuation of safe decommissioning of the nuclear power plants Kozloduy, Ignalina and Bohunice. This new financial assistance should support the efforts of the three Member States who are ultimately responsible for nuclear safety, including the financing of decommissioning.

EU Commissioner for energy Günther Oettinger said: "It is in our citizens' interest, that these reactors will be safely decommissioned and that they will never be restarted again. This additional financial support will help the three Member States to timely progress in defueling and decommissioning of these nuclear reactors.  This is a clear expression of solidarity of the EU, which has put nuclear safety as a priority."

The Union assistance for decommissioning of nuclear power plants aims at reaching an irreversible state in the decommissioning process and eliminating the major source of radiological hazard. The proposal foresees for Bulgaria additional €185 million until 2020, for Lithuania €210 million until 2017 and for Slovakia €105 million until 2017 (in 2011 prices).

Before the Union financial support will be provided, Bulgaria, Slovakia and Lithuania will have to meet certain conditions:

EU legislation on nuclear safety and on the management of nuclear waste has to be fully implemented.

The Member States have to create legal frameworks for the timely accumulation of national financial resources to cover the remaining financial needs. This will make sure that the Member States will be able to gradually take over the necessary financing responsibilities. 

Revised detailed decommissioning plans have to be submitted to the Commission. Those plans will be the basis for monitoring the implementation of the financial assistance from the Union.

For more information on decommissioning see DG energy website: http://ec.europa.eu/energy/nuclear/decommissioning/decommissioning_en.htm

Lithuania: Consultations with the EC on financial assistance for the closure of the INPP to continue

On 24 November the European Commission (EC) submitted a renewed proposal on the provision of the financial assistance for the closure of the Ignalina Nuclear Power Plant (INPP). According to Prime Minister Andrius Kubilius, consultations with the EC will continue in this regard.

“We consider the European Commission’s proposal for a regulation on the provision of financial assistance for the closure of nuclear power plants as a take-off ground for negotiations on adequate financing of the closure of the INPP. We must state that the current proposal is not acceptable to us, for it does not comply with the commitments enshrined in the Accession Treaty of Lithuania. In the Treaty of Accession of the Republic of Lithuania to the European Union, the EU has recognized the fact that the closure of the NPP was an exceptional case, that decommissioning of the NPP was a long-term process, and that it represented for Lithuania an exceptional burden not commensurate with the economic strength of the country. On the basis of the above, the EU has committed to provide adequate financial assistance to the decommissioning works of the NPP”, said Prime Minister Kubilius.

“We are responsible for the implementation of this large-scale project together with the other EU member states and the European Commission; therefore we expect to reach an agreement on the adequate financial assistance thereto, with a view to ensuring the safe and timely decommissioning of the INPP. We appreciate our past cooperation with the European Commission and the EU’s financial assistance for the smooth implementation of the projects related to the closure of the INPP. We expect understanding concerning the sensitivity of this question to Lithuania from all the stakeholders involved, and hope to reach an agreement on adequate financial assistance”, said the Lithuanian Prime Minister.

Information taken from the Government of the Republic of Lithuania http://www.lrv.lt/en/news/?nid=262

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