Se Ignalina Npp Operation Review

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SE IGNALINA NPP OPERATION REVIEW

(1 March 2011 SE Ignalina Nuclear Power Plant (INPP) Management Press Conference)

Operation of the Enterprise

Ignalina NPP strategic objectives in 2010-2029:

•  Safe, timely and effective decommissioning of INPP;

•  To become the services provider in the nuclear energy enterprises decommissioning market. To use the existing infrastructure for business needs;

•  INPP strategic objective for 2010-2013: To reorganize the operation of the enterprise in the most effective way reorienting it to the other stage of operation – the decommissioning.

In February 2011 during INPP Management meeting the enterprise operation factors (the salaries of the executive employees and specialists of INPP will directly depend on the results of the enterprise operation and implementation of these factors) for 2011 were confirmed:

1.  Safety Indicators:

•  Maximal individual radiation dose – does not exceed 18 mSv (per year);

•  Quantity of safety important events (of Level 1 and above according to INES scale) – 0 (per year);

2.  Economic Indicators:

•  Power energy consumption: 132.463 MWh

•  Heat energy consumption: 204.122 MWh;

•  Power resources programme implementation: 3 stages;

•  Income from sales (sale of dismantled equipment and unused spare parts) and investment activity:-10.0 million LTL;

3.  Decommissioning Indicators:

•  Performance of the interim stages of the main Ignalina NPP decommissioning projects – 24 stages;

•  Implementation of the approved equipment dismantling schedule – 2500 tonnes;

4.  Personnel Management Indicators:

•  Installation of the motivation system of administrative employees: 2 stages.

The main problem which arises during determination and assessment of these indicators is absence of analogues of the operation indicators system at the other nuclear power plants being closed.

1971 employees worked in the enterprise on 1 March 2011. It is planned that in 2029 the quantity of employees will be approximately 1100 people.

By 2029 surroundings of the power plant shall be prepared for the territory reclamation preserving the used buildings and infrastructure (to achieve the state of “brown field”). Total closure expenses can reach about 10 billion LTL.

Decommissioning Projects

Currently both INPP reactors are shut down and are at the safe maintenance phase. Reactor 1 is completely defuelled and the fuel is transported to the spent fuel storage pools. On 1 February 2011 unloading of 500 spent nuclear fuel assemblies from Unit 2 reactor to the storage pool started in order to minimize any risk for safety under the current conditions and forward the transferrence of the spent fuel to ISFSF after completion of its construction. Works of decontamination and dismantling of every building of Unit 1 are planned to be performed having consultation of various experts. The plans prepared for Unit 1 are in fact suitable for Unit 2 which is almost identical. Moreover, it was started to apply the system of management of all decommissioning processes created on the basis of the projects management tool “Primavera” (special software). This efficient complex processes management tool consists of six parts which include registration, planning and calculation, dismantling and decontamination, waste management, documents management and reports preparation processes.

Starting the implementation of the decommissioning projects, INPP Management set very clear objectives. One of them is to become the worldwide recognized leader and expert of safe and effective decommissioning of nuclear power plant Units with RBMK type reactors. Nobody in the world has performed it full scale before and, therefore, INPP employees will be able to acquire new unique and very valuable experience and knowledge which can also be applied in the other nuclear energy facilities. Fulfillment of this objective is aimed at the development of the high-level system of human resources, time, finances and processes management, projects management and radioactive waste treatment system. It is aimed at effective and transparent implementation of the decommissioning projects, main personnel maintenance during the decommissioning, performing the works using internal resources, as well as maximum use of employees knowledge and skills thereby providing them the possibility to obtain the new unique experience.

Key Projects:

§  New Interim Spent Fuel Storage Facility (ISFSF) (the “old” dry storage facility existing at INPP is already completely filled) – Project B1;

§  Solid Waste Management and Storage Facilities (SWMSF) – Project B2/3/4;

§  Landfill Facility for Short-Lived Very Low Level Waste – Project B19;

§  Near Surface Repository for Low and Intermediate Level Short-Lived Radioactive Waste – Project B25;

§  Engineering works of structures dismantling from Unit 1 reactor shafts – UP01. UP01 is initiated as an internal project implementation of which will enable INPP personnel to apply maximally their knowledge and experience. Internal projects considerably reduce the need of finances necessary for decommissioning (in 2010 alone the savings were 20.1 million LTL). It is planned to cooperate with various scientific institutions of Lithuania and other states. Beginning to initiate international graphite treatment project an application was submitted to IAEA (International Atomic Energy Agency) as well.

Implementation of projects B1 (ISFSF) and B234 (SWMSF) which are being financed by the International Ignalina Decommissioning Support Fund are considerably delayed. Both projects already have to be operated, however, it will unlikely happen before 2012-2014 (although the date of ISFSF delivery indicated in the contract is 28 March 2011) and 2013 (SWMSF; according to the Programme of Performance provided by the General Contractor, although the facilities already had to be in operation in 2009). The delay of ISFSF has a considerable impact on the schedule of reactor defuelling. Due to the 32-months delay of Project B1, INPP suffers heavy losses (2.87 million LTL per month) which arise because the fuel is still being stored in Unit 2 reactor and in both Units pools. The date of beginning of ISFSF operation determines the final schedule of reactor 2 and storage pools defuelling. Construction of the Landfill facility and near-surface repository currently is at the first stage of designing, in case of the Landfill facility it also concerns the construction of the buffer storage facility. Implementation of these projects is also delayed, however, it does not have a considerable impact on the general implementation of the decommissioning projects.

The main reasons of the decommissioning projects delay:

§  The lack of experience, responsibility and exactingness of the Employer while signing work contracts and beginning projects implementation. It was not required to reduce the existing delays and to perform the planned works according to the set schedules and, what is most important, to meet them.

§  One of the aspects which contributed a great deal to the delay in implementation of the projects is a complicated financing procedure of the decommissioning projects (DP) – the contract with EBRD shall be changed since participation of the bank, as an intermediary, in INPP closure processes has not ensured the efficiency of use of finances and timely submission of the projects financed from it, i.e. the quality of the projects. The contracts with the general contractor implementing the largest DP (B1 and B234) are concluded in 2005 in accordance with the English Law (the provisions of the contracts are not favorable for the Employer, while the disputes procedure described in them is also not favorable for quick settlement of issues on delays). Before signing these contracts the legal analysis of the contracts ensuring the rights of the Employer was not carried out, they were not even considered in INPP Management what is required according to INPP Management Work Regulations.

§  The situation was worsened by the lack of experience in the management of international projects and by the shortage of publicity and transparency during implementation of the DP. Project technical solutions not fully complied with INPP needs as well as with technical and structural requirements.

§  The foreign consultants working under the contract with EBRD did not ensure timely implementation of the main projects and in fact did not performed their basic functions (in spite of the fact that the price of one expert is about 1 million LTL per year). The number of consultants ranged from 25 (in 2005) to 16 (in 2010) and they were paid more than 100 million LTL for their services. In 2011 the number of consultants was reduced from 16 to 8.

§  The long process of agreement in the state institutions – a design shall be agreed with 12 state institutions of the Republic of Lithuania. In spite of this, the Contractor who has announced the experience of implementation of similar projects, also had to analyze the real situation, however, it did not get properly acquainted with the requirements of the Lithuanian institutions and VATESI.

§  The General Contractor (in case of B1 – the leading partner of Consortium) neither had an experience of implementation of such large-scale and complex projects nor sufficient resources for implementation of 2 the most major projects simultaneously. Regardless of these facts, the appropriate contracts with it were signed, although the analysis of the General Contractor possibilities had first to be performed before it and the measures had to be taken for high-quality and timely implementation of these projects. It also was not performed in time.

Please, pay attention: The contract of the European Bank of Reconstruction and Development was again imposed on Lithuania. In accordance to this contract, the consultants (particularly the Nuclear Power Safety Department of the mentioned Bank) who had to ensure smooth implementation of the projects, not only failed to accomplish the role of controllers and experts, but also currently are seeking to deny their faulty and inefficient activity and blame various Lithuanian institutions, INPP specialists and managers. The function of the consultants was to ensure the quality and timely implementation of the contracts and realized projects. Unfortunately, the consultants did not perform their functions and obligations properly and did not exercise the strict control over the projects surveillance. Almost from the very beginning, when the contract was signed, the faulty mechanism was created: EBRD did not require any results of their activity, former INPP Administration also did not controlled their work. In fact, due to the absence of any EBRD control and proper work controlling mechanism, the consultants were interested in the longest period of projects implementation, since it ensured stable and considerable income for them. This faulty practice has been changed by the new INPP Administration: the number of the consultants was reduced from 16 people working in 2010 up to 8 people in 2011 (in 2002-2005 there were even 25 consultants). Only those consultants have been left who are necessary to implement one or another project or to assure a very specific activity. The contracts with the consultants are currently signed only for one year. Their functions and aims which shall be achieved by them during their contractual work are defined very clearly. The budget of the consultants reached in average 14-21 million LTL in 2002-2009, while this year it is 8.97 million LTL (in 2010 it was 13.5 million LTL)

The fact that EBRD poorly administers the finances intended for INPP closure was already stated in the conclusions provided by the National Audit Office in 2009. The facts are obvious – implementation of the projects administered by the Bank is delayed, the prices of the projects are growing and it has a negative impact on the entire INPP decommissioning process. It also was stated in the Seimas by the Minister of Energy Arvydas Sekmokas who emphasized that on 14 October 2009 the European Commission officially in writing warned Lithuania that this contract violates the European Union Law in the field of taxes, more specifically the works, services and goods financed by the European Bank of Reconstruction and Development are tax-exempt. Therefore, the contract with the European Bank of Reconstruction and Development shall be changed. The contract with EBRD cannot be cancelled or changed without interference of the Seimas since this contract was ratified in the Seimas of the Republic of Lithuania. For example, Slovakia did not ratified analogous contract with the Bank and, therefore, successfully applies it on the basis of its own and EU laws, but not the non-transparent procedures applied for the third parties.

Nukem Technologies operation mechanism is similar in all states (mainly in countries of the East Europe and Russia) – they require exceptions to procedures regulated by the laws, however, compromises are not possible since these facilities are related to the nuclear safety. Nukem Technologies activity and their practice are notorious not only in Lithuania and in the states where this company implemented or realized the similar projects (for example, the analogue of our Project B234 in Chernobyl has risen in price more than twice and it still is not in operation), but also in the international power sector in general. Currently, it is a small company containing or involving about 140-190 employees. Probably, even if it changes its culture it could not work successfully for a long time even with the projects less complex than Ignalina NPP.

However, there are some examples of more professional and efficient cooperation such as INPP relations with the other important partner in Project B1 – manufacturer of the new casks for spent fuel German company GNS which is well-known in this sphere. The issues which arise during realization of the projects are rather well settled with such famous companies as AMEC, AREVA, etc.

Taking into account the developed situation, the new Management of INPP took measures to change it:

§  Control of projects implementation was enhanced. Works performance is supervised systematically and the compliance with the accepted works schedule is required, any conventional nonconformities or threat to the timely implementation of the projects are strictly fixed. Special attention is paid to the quality of the performed construction works and fulfillment of construction regulations requirements, since the General Contractor not always used to ensure the necessary labor discipline and strict adherence to the construction requirements imposed on such facilities.

§  The projects management and the group of negotiations with Nukem Technologies GmbH are enhanced.

§  Control of manufacturing, acceptance and modifications of the equipment at the Units is enhanced.