Radioactive Waste Management and Decommissioning
2019

Cost Benchmarking

for Nuclear Power
Plant Decommissioning

NEA

Radioactive Waste Management and Decommissioning

Cost Benchmarking for Nuclear Power Plant
Decommissioning© OECD 2019
NEA No. 7460
NUCLEAR ENERGY AGENCY
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENTORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENTThe OECD is a unique forum where the governments of 36 democracies work together to address the economic,
social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understandand to help governments respond to new developments and concerns, such as corporate governance, theinformation economy and the challenges of an ageing population. The Organisation provides a setting where
governments can compare policy experiences, seek answers to common problems, identify good practice andwork to co-ordinate domestic and international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Latvia,
Lithuania, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Korea, the Slovak
Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The
European Commission takes part in the work of the OECD.
OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and researchon economic, social and environmental issues, as well as the conventions, guidelines and standards agreed byits members.

This work is published under the responsibility of the Secretary-General of the OECD.
The opinions expressed and arguments employed herein do not necessarily reflect the official
views of the Organisation or of the governments of its member countries.

NUCLEAR ENERGY AGENCYThe OECD Nuclear Energy Agency (NEA) was established on 1 February 1958. Current NEA membershipconsists of 33 countries: Argentina, Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland,
France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, the Netherlands,
Norway, Poland, Portugal, Korea, Romania, Russia, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland,
Turkey, the United Kingdom and the United States. The European Commission and the International Atomic
Energy Agency also take part in the work of the Agency.
The mission of the NEA is:–

to assist its member countries in maintaining and further developing, through international
co-operation, the scientific, technological and legal bases required for a safe, environmentally soundand economical use of nuclear energy for peaceful purposes;–

to provide authoritative assessments and to forge common understandings on key issues as input togovernment decisions on nuclear energy policy and to broader OECD analyses in areas such as energy
and the sustainable development of low-carbon economies.

Specific areas of competence of the NEA include the safety and regulation of nuclear activities,
radioactive waste management and decommissioning, radiological protection, nuclear science, economic andtechnical analyses of the nuclear fuel cycle, nuclear law and liability, and public information. The NEA Data
Bank provides nuclear data and computer program services for participating countries.

This document, as well as any [statistical] data and map included herein, are without prejudice to the status of or sovereignty
over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
Corrigenda to OECD publications may be found online at: www.oecd.org/publishing/corrigenda.
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Cover photos: Decommissioning of the Merlin Research Reactor in Germany (Forschungszentrum Juelich GmbH); Business accounting(Zadorozhnyi Vikto/Shutterstock).

FOREWORD

Foreword

Decommissioning experience in relation to nuclear power plants (NPPs) and other nuclear
fuel cycle facilities has been gathering steadily in past years. Concerns remain, however,about the ability to accurately calculate and demonstrate the validity of decommissioning
cost estimates, as well as to control the costs during decommissioning.
The Nuclear Energy Agency (NEA) has long been working towards gaining greater
insight into the costs of decommissioning nuclear facilities, releasing a number of
guidance documents on important aspects of cost estimation for nuclear decommissioning
projects, including:•International Structure for Decommissioning Costing (ISDC) of Nuclear Installations (the“ISDC”), a harmonised international approach to the presentation of
decommissioning cost estimates published jointly with the European Commission(EC) and the International Atomic Energy Agency (IAEA) (NEA, 2012);•

Guide for International Peer Reviews of Decommissioning Cost Studies for Nuclear Facilities(NEA, 2014);•

The Practice of Cost Estimation for Decommissioning of Nuclear Facilities (NEA, 2015);•

Addressing Uncertainties in Cost Estimates for Decommissioning Nuclear Facilities –published jointly with the IAEA (NEA, 2017).

Taken together, these publications establish a good basis to produce comprehensive
cost estimates for nuclear decommissioning projects and to enhance confidence in theestimates, while providing improved transparency of the underpinning data andcalculations, and a more explicit representation of the uncertainties and risks that may
affect project costs.
Another, recent report by the NEA, entitled Costs of Decommissioning Nuclear Power Plants(NEA, 2016a), presents the results of an NEA review of the overall funding practices adopted
across NEA member countries in relation to the costs of decommissioning NPPs.
In recent years, the focus has increasingly been on the need to better understand thevariations between cost estimates, the relationship between estimated and actual costs,
and concerns about the apparent escalation of decommissioning costs (Invernizzi et al.,2017). In 2016, the NEA Steering Committee “acknowledged the need to expand andimprove cost benchmarking data as well as the understanding and acceptance ofbenchmarking as a valuable tool for all parties concerned” (NEA, 2016b). The present
report, Cost Benchmarking for Nuclear Power Plant Decommissioning, aims to address theseissues and build on earlier guidance and analyses by the NEA, examining approaches andmethods relevant to the benchmarking of costs in relation to the decommissioning of
nuclear power plants.

COST BENCHMARKING FOR NUCLEAR POWER PLANT DECOMMISSIONING, NEA No. 7460, © OECD 20193

ACKNOWLEDGEMENTS

Acknowledgements

Cost Benchmarking for Nuclear Power Plant Decommissioning was developed based on work
conducted in 2017-2018 by the NEA Decommissioning Cost Estimation Group (DCEG), of theWorking Party on Decommissioning and Dismantling (WPDD), and with the support of staff
in the NEA Division of Radioactive Waste Management and Decommissioning.
The NEA would like to thank the following experts for their contributions to thisreport, as part of the DCEG activity on benchmarking: Waqas Batley (Department for
Business, Energy and Industrial Strategy [BEIS], United Kingdom); Niklas Bergh(Westinghouse, Sweden); Jorge Borque Linan (Enresa, Spain); Markus Calderon (Swedish
Nuclear Fuel and Waste Management Company, Sweden); Simon Carroll (Vattenfall,
Sweden); Jean-Christophe Conus (Électricité de France); Domenico Corica (Sogin, Italy);
Ken Fisher (Sellafield, United Kingdom); Manuel Pantelias Garcés (Nagra, Switzerland);Bernadette Hammer (Alpiq, Switzerland); Lars-Olof Jonsson (Barsebäck, Sweden); John
Lindberg (BEIS, United Kingdom); Marco Migliorelli (European Commission); Paolo Mini
(Swissnuclear, Switzerland); Silvia Mucchi (Sogin, Italy); Richard Pike (Deloitte on behalfof Nuclear Decommissioning Authority [NDA], United Kingdom); Thom Rannemalm (OKG,
Uniper, Sweden); José Rodriguez (Federal Office of Energy [BFE], Switzerland); Karl
Sanderson (NDA, United Kingdom); Jari Tuunanen (Fortum, Finland); and Alex Walsh(Sellafield, United Kingdom).
The NEA also wishes to acknowledge the contributions of the following experts andorganisations: David Crewe (Turner and Townsend); Angel Gally (French Nuclear Safety
Authority); Diletta Colette Invernizzi (University of Leeds, United Kingdom); Nekkhil
Mishra (IPA Global); and Andy Ridpath (NDA, United Kingdom).

COST BENCHMARKING FOR NUCLEAR POWER PLANT DECOMMISSIONING, NEA No. 7460, © OECD 2019

5

TABLE OF CONTENTS

Table of contents
List of abbreviations and acronyms ............................................................................................9
Chapter 1. Introduction ................................................................................................................11
1.1. Objectives ...................................................................................................................................11
1.2. Scope ...........................................................................................................................................121.3. Organisation of the report .......................................................................................................12
Chapter 2. Added value ................................................................................................................132.1. Stakeholder perspectives.........................................................................................................132.2. An example of the potential for added value ......................................................................16
Chapter 3. Approaches .................................................................................................................193.1. Approaches to benchmarking in other industries ..............................................................19
3.2. Common features of other industry approaches ................................................................21
Chapter 4. Barriers and enablers ................................................................................................23
4.1. Cost benchmarking approaches – Barriers...........................................................................23
4.2. Cost benchmarking approaches – Enablers for the removal of barriers.........................28
4.3. Collecting and sharing data – Barriers ..................................................................................33
4.4. Collecting and sharing data – Enablers .................................................................................34
4.5. Enabling cost benchmarking data collection and sharing – Options ..............................37
Chapter 5. Conclusions and recommendations .......................................................................39
5.1. Summary of findings ................................................................................................................39
5.2. Options for benchmarking for NPP decommissioning.......................................................40
5.3. A possible roadmap for the implementation of benchmarking.......................................41
5.4. Moving forward .........................................................................................................................42
References .......................................................................................................................................43

List of appendicesA.

Sweden case study: Interface with project delivery tools .............................................45

B.1.

Details of barriers and enablers identified by industry .................................................49

B.2.

Barriers and enablers: Approach to ascertaining interest group perspectives .........51

B.3.

Enabling benchmarking option analysis ..........................................................................55

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TABLE OF CONTENTS

List of figures
2.1:

Key groups of stakeholders and their roles......................................................................13

2.2:

Potential savings on future projects identified by the NDA from theapplication of cost benchmarking techniques ................................................................17

4.1:

Barriers and the overarching challenges for their removal ..........................................23

4.2:

Organisation and facilitation – Examples of other industries compared to NPP
decommissioning (with assumed starting point and vision) .......................................25

4.3:

Benchmark components enabling the normalisation of cost data .............................26

4.4:

Cost benchmarking maturity development cycle...........................................................28

4.5:

Dependencies for benchmarking approach development ............................................29

4.6:

A critical mass for barrier removal and cost benchmarking development ...............29

4.7:

Enablers for the removal of barriers to cost benchmarking .........................................31

5.1:

Benchmarking implementation roadmap........................................................................41

A.1:

Simplified description of governance model adapted for nuclear D&D .....................46

B2.1: The need for a catalyst to justify industry buy-in to commit to benchmarking? .....53
B2.2: Enabling components to form the critical mass necessary for removalof headline barriers...............................................................................................................54

List of tables
4.1:

Elements informing the quality of normalisation and comparison ............................27

4.2:

Supporting information contributing to knowledge of and user confidencein actual cost data .................................................................................................................27

4.3:

Examples of benchmarking enablers in the construction sector ................................32

4.4:

Examples of benchmarking enablers in the oil and gas industry ................................32

4.5:

Characteristics that need to be considered to support options for costbenchmarking NPP decommissioning ..............................................................................33

4.6:

Cost data requirements for project-level and activity-level benchmarking ..............34

4.7:

Considerations for data collection and sharing ..............................................................35

4.8:

Cost databases: Advantages and disadvantages .............................................................36

4.9:

Preliminary considerations informing cost benchmarking, data collection
and sharing options ..............................................................................................................37

4.10: Generic options (A-F) for data collection and sharing ...................................................38
5.1:

8

Summary profile for Option F .............................................................................................41

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LIST OF ABBREVIATIONS AND ACRONYMS

List of abbreviations and acronyms

DCEG

Decommissioning Cost Estimation Group (NEA)

D&D

Decommissioning and dismantling

FMI

First Marine International (United Kingdom)

IAEA

International Atomic Energy Agency

ICMS

International Construction Measurement Standards

ISDC

International Structure for Decommissioning Costing

KPI

Key performance indicators

NDA

Nuclear Decommissioning Authority (United Kingdom)

NEA

Nuclear Energy Agency

NPP

Nuclear power plantOECD

Organisation for Economic Co-operation and Development

OMS

Operation, maintenance and security

RICS

Royal Institution of Chartered Surveyors (United Kingdom)

WPDD

Working Party on Decommissioning and Dismantling (NEA)

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INTRODUCTION

Chapter 1. Introduction

The number of nuclear power plants entering the decommissioning phase will increasesignificantly in the coming years, with a corresponding need to:•demonstrate that decommissioning cost estimates are a reliable basis forunderstanding actual costs;•

facilitate the collection of relevant information and cost data from NPP
decommissioning projects;•

make use of the above information and data on costs to improve management toolsthat support effective and efficient delivery of decommissioning projects.

While the development of decommissioning cost estimation methods is ongoing, andexperience is expanding in their application, the relationship between estimates andactual decommissioning costs has yet to be systematically examined. Addressing therelationship between estimates and actual costs requires the collection and analysis ofdata relating to cost estimates, as well as information on the actual costs incurred. It also
requires information on the relevant, specific contexts or conditions in the individual
countries, as well as any additional information on factors that may have an impact on
costs. For the purposes of this report, such an analysis is referred to as “cost benchmarking”.
Developing and applying cost benchmarking approaches appropriate fordecommissioning projects would facilitate the systematic analysis of actual
decommissioning project cost outcomes, including in relation to the original cost estimates.
It would also yield valuable insights about key cost drivers in actual decommissioning
projects, and the extent to which current cost estimates accurately capture and reflect
these cost drivers. Aligning the reporting of decommissioning project costs with theunderpinning cost estimates would thus facilitate the identification of causes of major
deviations between projected and actual costs.
A major challenge arises for cost benchmarking in the context of NPP decommissioning,
because relevant project and cost data is not always made readily available. Understanding
the specific nature of the difficulties and barriers to sharing and analysing nuclear
decommissioning project information relevant to costs, from the perspective of different
stakeholders, is therefore key to understanding if and to what extent these factors may be
addressed. It is therefore fundamental to determine the potential added value of developing
and implementing cost benchmarking in the context of nuclear decommissioning.

1.1. Objectives
This report provides policy makers, regulators, strategy and decision makers with adescription and an analysis of the practice and methodology of cost benchmarking in thecontext of NPP decommissioning. It also suggests new approaches to cost data sharing andanalysis, and promotes the development of benchmarking methodologies specific to NPP
decommissioning.

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INTRODUCTION

1.2. Scope
The report draws on the experience of NEA member countries in developing andimplementing approaches for cost benchmarking suitable for nuclear decommissioning
projects, including experiences in decommissioning other types of nuclear infrastructure(i.e. nuclear facilities other than NPPs). The report takes into account related developments
in other industry sectors, such as oil and gas, some of which are better served by moremature cost benchmarking approaches than those in the nuclear sector.
Particular focus is given to identifying key factors, drivers and constraints toimplementing cost benchmarking in the context of nuclear decommissioning. These are
addressed from a broad range of perspectives in order to help identify a path forward thatmight enjoy sufficiently broad support from a wide base of interested stakeholders.
While the specific focus of this report is on the application of cost benchmarking in thecontext of NPP decommissioning, the methods and approaches considered herein are
nonetheless intended to be generally applicable and therefore relevant – with suitable
adaptions – to the decommissioning of all nuclear facilities.

1.3. Organisation of the report
The findings presented in this report are based on the experiences in, and insights from,
NEA member countries as provided and collected by experts in the benchmarking activity
within the NEA Decommissioning Cost Estimation Group (DCEG).
The added value that could potentially be realised through implementing costbenchmarking for decommissioning from a variety of stakeholder perspectives isdiscussed in Chapter 2 of this report. Chapter 3 of the report presents approaches to costbenchmarking in a range of other industries, and Chapter 4 provides information on
approaches to data collection and sharing, including for highly sensitive data, and how
these might inform the identification of appropriate methods for collecting and sharing
the information required for benchmarking for decommissioning. This chapter also
includes an important discussion on the barriers to such data sharing, and the potential
for enabling the removal of such barriers. Chapter 5 of this report then summarises thefindings and conclusions, and provides overall recommendations.
The appendices include further information on the individual aspects described in thisreport, as well as case studies reflecting experiences in NEA member countries. Morespecifically:

12•

Appendix A: Case study from Sweden – Interface with project delivery tools;•

Appendix B.1: Details of barriers and enablers identified by nuclear industry
stakeholders;•

Appendix B.2: Approach to ascertaining stakeholder interest in NPP benchmarking;•Appendix B.3: Additional analysis of cost benchmarking options.

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ADDED VALUE

Chapter 2. Added value

Cost benchmarking adds value to different stakeholders in a variety of ways, and the utilityof cost benchmarking varies as projects mature through their lifecycles. This chapter
explores the perspectives of different stakeholder groups, and ways in which their needschange through time.

2.1. Stakeholder perspectives
Though countries vary in the organisation of their nuclear industries, all share common
characteristics in terms of having groups of stakeholders who have differing needs for costand schedule estimates, and thus differing interests in the cost benchmarking process.
These typical stakeholder groups include: executive decision makers; authorities andregulators; programme and project teams; and the supply chain. The needs of stakeholders
in the nuclear sector are likely to be similar to those already demonstrated in otherindustries. Accordingly, a general description of these needs may prove to be useful as abasis for the approach of this report.
Figure 2.1: Key groups of stakeholders and their roles
Executive decision
makers• Approve programmes and projects• Allocate funding• Disburse contingency reserves

Authorities andregulators• Set policy and regulatory framework• Establish financing requirements

Programme andproject teams• Develop and execute
decommissioning work

Supply chain• Engineer and execute specificscopes of work

Executive decision makers
The stakeholder group of executive decision makers commissions the work, decides on
strategy, approves funding, manages the disbursement of risk contingency reserves, and assuch has a keen interest in receiving accurate cost estimates. Typically, executive decision
makers include owner/operator roles such as Chief Executive Officer, Chief Financial Officer,
other executives in charge of project shaping and delivery, and the boards of operatingcompanies. Executive decision makers are interested in the ultimate decommissioning costs
as early as possible during the new-build process, in order to incorporate these into costbenefit considerations of the economic viability of projects. Such decommissioning costestimates might also form the basis for the financing of future decommissioning activities.
In both cases, underestimating or overestimating, such costs may contribute to distortions
in decision making.
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ADDED VALUE

More obviously, executive decision makers must approve decommissioning work at
different points in time, typically through decisions taken in stage-gated processes when
decommissioning programmes and projects mature. Such approvals require accurate
estimates of both the magnitude of funding required and the phasing over time (and henceof the schedule).
Executive decision makers are reliant on programme and project teams to provide
them with business cases incorporating not just point estimates of costs and schedules,
but also ranges of probable outcomes. Quality decision making relies on the provision ofreliable estimates at an early stage of the project initiation process. This helps establish
the strategy and consideration of alternative approaches. During the early stages ofprojects, cost estimation largely relies on analogous comparisons because of an inherent
low engineering definition, i.e. benchmarking with initiatives of similar scope.
Benchmarking is thus a necessary tool in the earliest stages of the project lifecycle.
Using cost benchmarking as a tool helps to make the actual outcomes of scope, costand schedule available to others in the form of a lesson learnt. The value that costbenchmarking adds to executive decision makers is in bringing better quality of
information about possible outcomes within realistic ranges. Executive decision makers
are generally unable to comment in detail on bottom-up cost and schedule estimates,
based on thousands of elements and assumptions, but they are capable of probing why
project teams might present an arbitrary or too-narrow range of cost estimate values thatmight not overlap with actual outcomes of analogous projects elsewhere. In this sense,
cost benchmarking at the project/programme level allows executive decision makers tochallenge project teams to remove optimism bias, and to actively compare and contrast
their initiatives with analogues.

Authorities and regulators
Bodies that oversee the executive decision makers commissioning projects include
regulatory bodies and governmental authorities. Authorities and regulators have
responsibilities to ensure that financing for decommissioning is adequate. They may also
have additional oversight responsibilities such as ensuring value for money in projectdelivery. Authorities and regulators thus have an interest in assessing the competence ofthe executive decision makers’ ability to provide accurately estimated programmes ofwork. Authorities and regulators in other industries often require that cost benchmarking
be undertaken as part of the process of oversight. Authorities and regulators sometimes
create their own cost benchmarking datasets in order to compare and contrast operator
proposals.
Cost benchmarking provides authorities and regulators with insight into whether
operators (and the decision makers among them) are providing value for money totaxpayers/customers; whether they are efficient stewards of capital; whether they havecompetent processes for shaping and executing programmes of work; whether theirpolicies are working; and whether operators have selected appropriate strategies toimplement their policies.
Authorities and regulators may also use cost benchmarking to identify the magnitude
of systemic sector premiums, and the root causes of such premiums. Ideally, this should
also contribute to the identification of measures to make the entire industry more efficient.
In this sense, authorities and regulators are not only interested in benchmarking
capital/abandonment expenditure, but also in operating expenditure.
There is a perception by some national regulators that cost benchmarking can be used
as a tool to prevent serious overruns on cost and scheduling for some of the megaprojects.
Industry research indicates that megaprojects in general (Merrow, 2011) and nuclear
projects in particular (Locatelli, 2018) are prone to such overruns. While this research is
focused on overruns of new-build activity, some authorities (such as in the United Kingdom)

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ADDED VALUE

have extensive new-build scope as part of their decommissioning plans. Some
decommissioning project cost and schedule outcomes have already illustrated considerable
overruns, by as much as an order of magnitude on cost, and decades on the schedule.

Programme and project teams
Programme and project teams have as much interest as executive decision makers, andauthorities and regulators, in reliable cost and schedule estimates. Reliable estimates help
formulate robust project execution plans, and help develop accurate scopes of work for the
supply chain (the supply chain as a stakeholder is discussed in the following section).
In addition, programme and project teams are interested in a further level of detailed
insight that cost benchmarking can provide. Teams involved in the early, shaping step of
the project life cycle focus on identifying and selecting options for further development.
This entails, firstly, widening their analysis of the ranges of alternatives, then narrowing
and rejecting options until a single, preferred alternative is evident, and this latter
alternative is brought forward for approval. Such “optioneering” activity is crucially
supported by cost benchmarking, not only because it informs the cost and schedule
estimate ranges of alternative approaches and thus their relative merits, but also because
it compares the approaches directly. Furthermore, in seeking to understand why an
estimate varies from one seemingly analogous project to another, project teams gain
insight into alternative approaches and methodologies that might optimise their own
plans, and thus identify superior approaches.
Whereas decision makers, authorities and regulators are interested in costbenchmarking and schedule estimates of the project as a whole, programme and project
teams have much to gain from benchmarking detailed aspects of the cost and schedule. For
example, simple databases of “norms” (typical costs or cost ranges for particular cost items)
to explain typical costs for equipment and materials can help inform base cost estimates.
Cost estimate and benchmark data presented in the form of “ratios” (estimated cost in
relation to typical cost value or ranges) can help identify whether a system is over or underengineered. 1 Benchmarking ratios cannot reveal such issues directly, but analysis ofdeviations from other project ratios can stimulate programme and project team members
to ask probing questions that lead to such revelations.
Cost benchmarking for programme and project teams can thus be of a different kindthan that for executive decision makers and authorities and regulators. It occurs
throughout the project life cycle and not only in association with decision gates whenapproval is being sought for estimates. Cost benchmarking occurs at the detailed level, notjust the macro level. Furthermore, it is expressed in a myriad of ratios, trends anddiscontinuities. In some industries, it has been found that programme and project teams
might rely on a set of benchmarking tools and data that are different from those used byexecutive decision makers. The interface with cost benchmarking tools and products byexecutive decision makers and by programme and project teams needs special attention
in order to ensure that the same underlying information does not give rise to apparently
contradictory findings about the status and health of projects and programmes when usedin different contexts.
A case study from Sweden illustrating the interaction between cost benchmarking, andproject governance and delivery tools, is presented in Appendix A.

1.

For example, a relatively high ratio compared to other similar examples could reveal an inefficient(over-engineered) design on the one hand, or a relatively low ratio might suggest an insufficientattention to detailed requirements (inadequate design) on the other hand.

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ADDED VALUE

Supply chain
Suppliers need to have a keen understanding of the levels of uncertainty and risk in order
to correctly price their work and promise delivery timescales. Typically, this occurs in thecontext of a competitive bidding process. In addition, suppliers may be invited byprogramme and project teams to create cost and schedule estimates upon which owner/
operator teams will rely.
The owner/operator project control function might sometimes create an integrated
project team with the supply chain, integrating suppliers’ process of estimation into theproject as a whole. The observations made above about the importance and added valueof cost benchmarking data and tools for programme and project teams apply equally to theestimating teams in the supply chain. In addition, suppliers as entities can derive added
value from cost benchmarking by demonstrating the robustness of their estimates in thebidding process, and thus the commercial viability of their tenders. The specific types ofvalue added include: being able to provide greater certainty of cost and schedule outcome;being able to negotiate more fairly any incentivisation and penalty clauses associated witha contract; and being able to optimise bids by comparing and contrasting design andproject execution characteristics with analogous projects.
Because of its role in the bidding process, the supply chain tends to regard benchmark
data as a competitive advantage and to be unwilling to share it with other entities. These
supply chain concerns will be discussed further in subsequent chapters, in the context ofbarriers to sharing sensitive information and how these might be addressed.

2.2. An example of the potential for added value
This section outlines an example of how the United Kingdom Nuclear Decommissioning
Authority (NDA) used project-level (i.e. the whole project) cost benchmarking to inform
executive decision makers on the costs of decommissioning NPPs.
In 2013, the NDA project controls contract supplier recognised that consistent data
capture from current decommissioning projects would improve the estimation of costs andscheduling for future projects, enabling better decision making. By adopting consistentmethods of data capture, the UK nuclear decommissioning industry would be in a better
position to share and utilise the information available. The scope of the exercise included
analyses of two projects at the Bradwell and Dungeness nuclear power plants, which werethen either at or near completion. By analysing these past projects and understanding thescope, cost drivers and project specific “premiums”, the hope was that greater certainty ofoutcome would be achieved on future projects.
This work captured the following types of information:•

the scope of work performed;•

the original cost estimate in a standard cost breakdown structure and the actual
cost outcome;•a variance analysis that identified the reasons why costs changed between theoriginal cost estimate and the actual cost outcome;•metrics appropriate to the nature of the project that could form the basis of the costnorms for use on future projects;•

the cost “norms” against the identified metrics.

The results from this analysis suggest that consistent application of cost benchmarking
tools could present opportunities for potentially large cost savings in relation to future
projects, in applying the lessons learnt from those earlier projects. The study showed thatthe greatest potential savings could be realised if the benchmarking insights were applied
early in the project development (i.e. at the conceptual design stage), and that the potential

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ADDED VALUE

savings diminished if the insights were applied later, as the project planning advanced, orwhen the project was underway. Figure 2.2 indicates the magnitude of potential savings
foreseen by the NDA at the time, all of which could be achievable if the insights obtained
through the use of cost benchmarking techniques were effectively applied.
Figure 2.2: Potential savings on future projects identified by the NDA
from the application of cost benchmarking techniques
80
Potential savings (%)

70
60
50
40
30
20
10
0
Conceptual stage

Partly conceptual,partly underway

In progress

Stage of project when benchmarking insights are applied.
Source: NDA.

In 2015, the NDA commissioned a further benchmarking study in order to build further
on the potential identified in 2013. The study focused on data from the NDA Estate portfolioof recent decommissioning with historical data from the NDA’s Project Memory Guide andthe United States Department of Energy. A standard proforma structure was developed tocapture the facility size, cost and schedule. The project data was broken down into thestages of studies, design, construction and commissioning. Nine facility types wereidentified, based on construction methods and the complexity of equipment, with lessemphasis on the facility function. Projects were categorised according to these nine facility
types and direct comparisons were drawn for whole-project estimation. With data input
from ~1 000 projects, the NDA was able to gain sufficient confidence to make a significant
reduction in the nuclear provision for projects across the NDA’s estate. The database fell
into disuse after an attempt to transfer ownership to another arm of the UK government.
One of the lessons learnt from this study is that clear long-term ownership of data is as
important as the initial gathering of the data itself for the ultimate success of a costbenchmarking approach. This theme will be explored further in Chapter 4.
The NDA has also experimented with other benchmarking approaches. In recent years,
the construction of a second independent cost estimate for major projects has been
attempted, using cost norms from other industries devoid of the “nuclear premium”
thought to exist in the United Kingdom. This approach has been found to be of variableutility, and is inherently expensive, although it did provide insight, at the line-item levelwithin project cost estimates, into the root causes of variances, while providing
suggestions for cost optimisation. The NDA has most recently experimented with using
third party suppliers to benchmark major capital projects at the project level. The approachhas been insightful, but is hindered by limited availability to a robust dataset of analogous
projects accessible to third parties. The NPPs for which the NDA is responsible are mainlyof the Magnox type, and the approach to sharing cost data on decommissioning between
these NPPs has, to date, consisted of placing the entire fleet of Magnox reactors into one
organisational unit in order to maximise the opportunities to apply lessons learnt andshare cost data.
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Chapter 3. Approaches

This chapter discusses some approaches used for cost benchmarking in other industries
and how these might be applied to cost benchmarking for decommissioning NPPs.

3.1. Approaches to benchmarking in other industries
Historically, cost benchmarking has always been part of the approach used during major
projects: the questions “how much will it cost?” and “how long will it take?” have always
been informed by comparisons to other analogous projects. The last decades of the20th century saw the greatest innovation in benchmarking approaches, enabled byadvancements in information technology that allowed more effective sharing andstructuring of data, as well their normalisation. This innovation also followed a post-war
investment boom that generally disappointed investors in terms of project outcomes notmeeting expectations. The consistent failure to deliver projects on time, within budget andto specification, led to considerable investment in techniques to better match theestimates with the outcomes.
The degree of experience with, and sophistication of tools to support, costbenchmarking varies between industries. This chapter examines approaches developed foroil and gas, shipbuilding and civil construction.

The oil and gas industry
The oil and gas industry has long benefited from services that benchmark project costs,
schedules, the scope of projects and even project maturity at stage gates for new-build
capital investments, but only lately have these services been extended to thedecommissioning of such facilities. The services to support decommissioning estimatesfor offshore facilities in the Gulf of Mexico are generally more advanced than fordecommissioning in the North Sea, reflecting the cycle of maturity since older Gulf of
Mexico assets were being taken out of service earlier.
Despite the decommissioning of North Sea offshore oil and gas facilities still being in
its infancy, the capacity that the industry already has to benchmark such initiatives far
exceeds the capability of the nuclear industry to benchmark its own decommissioning
programmes, which are at similar, early stages of development. This lack of capacity in the
nuclear industry underlines the enormous potential for applying cost benchmarking
approaches to its decommissioning projects, along with the possibilities for learning fromthe offshore oil and gas sector when doing so.
Oil and gas cost benchmarking is served principally by three third party suppliers in
the private sector. Two of these offer benchmarking services covering mainly surface
facilities and the third offers benchmarking services focusing on subsurface wells. The
two providing benchmarking services relating to surface facilities each oversee a
consortium in which more than half of the industry participates to share benchmark data.
Many of the “supermajor”, international oil companies participate in both forums, andsome seek to benchmark their projects twice using the data available from each supplier.
In addition, certain jurisdictions host governmental sources of cost benchmark data (forexample, the United Kingdom regulator, the Oil and Gas Authority) to complement
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APPROACHES

offerings from the private sector, ensuring a like-for-like data set within a certain
geography and regulatory framework.
Whereas participation in private sector benchmarking consortia is voluntary at theenterprise level, once an enterprise joins a consortium, individual project participation
becomes mandatory for members, whereby projects may use the database to inform theirestimates, but they must supply their actual outcomes at project closure to help others in
the consortium. Participation in governmental benchmarking regimes is often mandatory,
as a pre-requisite for governmental approvals, and thus governmental databases can be
useful repositories of holistic data sets.
Oil and gas benchmarking cost datasets are typically limited in scope to oil and gas
initiatives, with little or no sharing of data between this industry and other industries. Thisis the case by design, in order to guarantee that the operators contributing data have acertain level of control of their usage. At the same time, there are no intrinsic limitations
such that the industry could not learn from another data set: for example, the constructionof a hull for a floating production storage and offloading vessel in oil and gas may have
many similarities with the hull of a super tanker in the shipbuilding industry.
The oil and gas industry conducts cost benchmarking at both the project level and theactivity level, and some of the commercial benchmarking organisations focus on delivering
services relating to one or another of these types of benchmarking. Project-level
benchmarks are often demanded by decision makers and regulators as part of theapprovals process, whereas activity-level benchmarks are used by project teams to refine
design criteria and project execution approaches (see Section 3.2 below).
In the oil and gas industry, the cost data available for the benchmarking ofdecommissioning activity is less plentiful than that for new build. Nonetheless, the same
tools and techniques used for decades to benchmark new build are now being extended
for use in the case of decommissioning activities. Although the industry suffers from a
relative lack of data related to decommissioning, with some data richer from certain basinsthan others, it has not stopped the industry from normalising the data for use in one partof the world to another, e.g. normalisation of data from the Gulf of Mexico for use in the
North Sea.

Commercial and defence ship building
Individual commercial ship builders have the benefit of significant, historical data
capture, which informs their norms and estimating approaches. Despite the competitive
nature of commercial ship builders, these companies have embraced the benefits ofsharing benchmark data across the industry in a drive for effectiveness and cost
reduction. Commercial, civilian ship builders share data anonymously through First
Marine International (FMI). FMI maintain the data set and have developed the algorithms
to normalise the data and understand the variant factors (complexity, regulatoryenvironment, etc.).
In response to concerns regarding the performance of UK naval projects, and in a UK
market with limited competition, the UK Ministry of Defence has also commissioned the
FMI to benchmark naval projects. The use of cost benchmarking in defence shipbuilding
has expanded and now encompasses Australian and US projects.

Civil construction
The International Construction Measurement Standards Coalition (ICMSC) is a group of
more than 40 professional and not-for-profit organisations from around the world, working
together to develop and implement international standards for benchmarking, measuring

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and reporting construction project cost. 2 To this end, the ICMSC has produced theInternational Construction Measurement Standards (ICMS) (ICMSC, 2017). The ICMS is acost classification and reporting system, which aims to provide global consistency inclassifying, defining, measuring, analysing and presenting construction costs. The firstedition of ICMS focuses on capital costs; however, future editions of ICMS may also
incorporate other matters such as costs in use.
A survey of the members of the Global Alliance for Buildings and Construction (GABC)
was published by the Royal Institution of Chartered Surveyors (RICS) in November 2017 (RICS,
2017). The purpose of the survey was to investigate what type of construction data iscollected by whom, where and for what reason; and also to examine data collection and use
patterns. The survey identified a series of key challenges in relation to better data capture
and management, such as the lack of a central storage location, non-harmonised datacollection formats and data reporting obligations, overall data availability and accessibility,and data reliability. The analysis concluded that, in terms of effective data capture andsubsequent management, the sector still has some way to go. While there is an encouraging
number of good practice examples and public and private initiatives, the overriding messageof the survey findings is that fragmentation and silo-thinking in this sector has affected theway that data are handled in the sector. Finally, the report also provides guidance as to howsome of the challenges identified may be potentially overcome, highlighting the benefits andopportunities that arise from a more consistent and coherent approach to data andinformation collection, as well as management for individual stakeholders.
In March 2018, the results of a series of industry workshops, with the objective ofidentifying the incentives for, and barriers to, sharing cost data, were published by RICS
(RICS, 2018). These results noted the increasing difficulties in collecting consistent data at
the required level of granularity, which likely stem from changes in the approach tocontracts; a growing reluctance from the industry to give away what is increasingly seen
as a valuable commodity – which is often protected by intellectual property rights (IPR) –and clients’ insistence on confidentiality, particularly in the private sector. Intriguingly,
the findings highlight that the benefits of sharing data seem to be well recognised by clients,
consultants and, to a lesser extent, contractors. Moreover, they suggest that the willingness
to share data appears to be proportional to the perceived benefits. The report nonethelessquestions whether this apparent recognition of the value of sharing data is a true reflectionof the actual appetite for doing so. It appeared from the workshops that there was generalagreement across the industry that the ICMS could act as a catalyst to change attitudes.
The ICMS could thus be the appropriate vehicle through which the process of costcollection and analysis is standardised.

3.2. Common features of other industry approaches
The examples discussed above highlight two broadly different approaches that might betaken in cost benchmarking:
1. Project level: a comparison of overall cost and scheduling for one project with the overall
cost and scheduling for another. This technique is offered by Independent Project
Analysis Global (IPA Inc.) for oil and gas and process industries, and by the FMI for
shipbuilding. The approaches are typically aimed at informing the decision executive, as
well as the authority and regulator stakeholder groups.
2. Activity level: a comparison at the line-item level within a project’s cost and schedule
estimate – i.e. comparison of one activity of the project against a similar activity inanother project – and aggregation of the results. Turner and Townsend, the ICMS, IPA
Inc. and the FMI offer this type of analysis.

2.

Description adapted from https://icms-coalition.org.

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Cost benchmarking approaches in these industries have some shared characteristics.
These include:•

a horizontal collaboration between organisations, and across geographies between
entities that may otherwise be competitors;•

a vertical collaboration between governments, operators and the supply chain toshare data in managed ways;•

the centralisation of the structured records of project outcomes into databases;•

facilitation by third party entities that provide value-adding services to consortia ofparticipants, which may range from agreeing formats for making comparisons toactually managing and analysing data provided by members.

In the examples provided above, the involvement of the private sector in providing thebenchmarking services is noteworthy. Evidently, the industries concerned have found a
way not only to overcome barriers to sharing data, but they have also developed such alevel of trust that the private sector has been invited to host the data on their behalf. In
this context, the RICS analysis described above (RICS, 2018) highlights a number of criticalissues for establishing databases equally applicable to cost benchmarking for nuclear
decommissioning, as represented in the following questions:•

How can clients and their supply chains be incentivised to collect data that iscomprehensive and robust, while properly describing the context?

•

Who should pay for the cost of data collection and analysis?

•

Which entity or entities should take the lead in setting up, managing, offering
quality assurance and analysing the data repository? And how should it be funded?

Many factors contribute to making direct comparison of projects difficult during a costbenchmarking exercise. Projects occur in different contexts, for example they may vary incomplexity, may be novel, operate in different regulatory environments, encounter
different labour costs and industrial relations arrangements, utilise different currencies,
and they may have access to labour with varying levels of skill and training, experience withcomplex technology, etc. Approaches to address these benchmarking challenges in suchcontexts have been adopted by other industries, and include:•

techniques to present/store data in a consistent format;•

agreement to use a standard work breakdown structure/cost-reporting format;•

specific methodologies to compare and assess non-equivalent data sets or nonnormalised data.

The use of standard, work breakdown structures, cost breakdown structures andproduct breakdown structures greatly simplifies cost benchmarking. The International
Structure for Decommissioning Costing (ISDC) of Nuclear Installations report provides exactly thistype of common reporting structure for NPP decommissioning costs (NEA, 2012). The
International Atomic Energy Agency (IAEA) has in fact adapted the ISDC for application in
research reactor decommissioning projects (IAEA, 2017).
Approaches to cost benchmarking by other industries considered in this report suggestthat benchmark databases are a key enabler for providing the added value sought bystakeholder groups, a subject that will be further discussed in the following chapter.

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Chapter 4. Barriers and enablers

4.1. Cost benchmarking approaches – Barriers
Barriers to the introduction of cost benchmarking in the decommissioning of nuclear
power plants (NPPs) mainly result from a lack of collected data on actual costs, as well as
perceived obstacles to sharing this data with others. Enabling the removal of these barriers
is thus essential to introducing cost benchmarking approaches and to achieving the added
value described earlier in this report. In order to overcome these barriers, it will benecessary to address the apparent absence of an appropriate organisation within the
nuclear industry, which will ultimately be needed to enable cost benchmarking and to
facilitate the sharing of data.
This chapter discusses the interrelated barriers to cost benchmarking. These barriers
are common to costs at both the project level and the activity level. Figure 4.1 illustrates
the nature and interrelated character of such barriers.
Figure 4.1: Barriers and the overarching challenges for their removal

No incentive for industry
engagement

Competition law
The requirement for
co-operation agreements to bealigned to applicablecompetition law

Low benchmarking
maturity
Benchmarking has low
maturity or no track record ofadding value to NPP
decommissioning,
discouraging stakeholder
engagement

The industry has commercial,
cultural, and security risk
concerns that limit sharing ofdata. Internal benchmarking
adds insufficient value

The over-arching challenge
for barrier removal
How organisations and decision makers
responsible for decommissioning can be
engaged through benchmarking withthose who have progressed throughsimilar decommissioning projects,
and thus have valuable cost data
available

Obstacles to normalisation

No investment inorganisation and facilitation
A dependency on the necessity tocollect and share cost data, andalign approaches that use them,so as to enable industry-wide
added value

Absence of actual
cost data
The lack of collected and sharedcost data with definitions thatsatisfy boundary conditions
sufficient to allow reliance on
the data

The inability to normalisebenchmark data because it lacks
sufficient information on context
and scope to adjust it to enable
comparisons

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As these barriers are interrelated, each one needs to be removed in order to allow thecost benchmarking to deliver its full, potential value. Each of the barriers is discussed in
more detail in the following subsections. Potential enablers for the removal of the barriers,
as well as the overarching challenges for barrier removal, are discussed in Section 4.2.

Barrier: No incentive for industry engagement
The nuclear industry has numerous commercial, cultural, security and risk concerns thatact as barriers to sharing cost information with others. Today there is essentially onlyinternal cost benchmarking within organisations, and this is not adding the overall value
sought from cost benchmarking. The nuclear industry often describes his reluctance toshare data as a fundamental barrier to even engaging in the first, potential steps required
to start implementing cost benchmarking across the industry. These industry-specificbarriers are summarised at Appendix B.1.
The extent to which nuclear industry actors may be interested in cost benchmarking
varies widely. There are those who might want to take the benefits and realise the added
value from cost benchmarking, but have little ongoing interest in investing or otherwise
collaborating in its development and maintenance. Similarly, there may be stakeholders
with valuable data from advanced or completed decommissioning projects, who have nofuture requirements in this regard and thus little or no interest in collaboration for the
benefit of others. In addition, some NPP operators might be more incentivised to focus on
nuclear power generation rather than decommissioning of NPPs or radioactive waste
management, and they might have little interest in participating in the optimisation of
decommissioning costs.

Barrier: No investment in organisation or facilitation
Currently, no organisation or governance has been established or designated to collect andshare data in the nuclear sector. And yet any such structure and process must be managed
in a way that will meet and satisfy potential stakeholder concerns. It is also necessary to
encourage engagement by showing real value and benefits at the different stakeholder
levels. Other industries have developed an organisation, governance and facilitation toboth enable management of the perceived risks and add value, and there is sufficientevidence to indicate that the nuclear industry can learn and benefit from this experience(see illustration in Figure 4.2).

Barrier: Absence of actual cost data
“The lack of cost data from actual decommissioning projects is a major hindrance to thebenchmarking and validation of decommissioning cost estimates” (Costs of Decommissioning
Nuclear Power Plants [NEA, 2016a]).
Actual cost information that can add value when it is made available to others is a crucial
aspect of the cost benchmarking process. In other words, it is important to have informationon actual costs for projects and activities that have been completed. This might also include
records of estimates made at recognised project stages, useful when examining the effectof project and engineering maturity on estimates. Actual cost data needs to be accompanied
by a description of the project or activity scope that it represents. This description mustdescribe boundary conditions sufficiently well in order to allow reliance on the cost
information definition in the preparation of other estimates, decisions and approaches toproposed decommissioning work and services. Cost data which is provided with thisaccompanying description, is referred to in this report as “actual cost data”, i.e. benchmarks.
There is a general absence of industry shared, actual cost data from NPP
decommissioning to support external cost benchmarking. This absence of shared
information generally results from few such NPP decommissioning projects having been
fully completed. While some project and multi-national data are captured and managed in

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specific cases (e.g. within the EU Nuclear Decommissioning Assistance Programme [NDAP]),
where such actual cost data exists, its collection and sharing is not widespread. Today,
when actual cost data is captured in a comparable, validated and trustworthy form, it istypically held and used within the organisation where it originated to support internal costbenchmarking. Some isolated sharing of cost data does take place, but it is rare.
Organisations capturing and using only their own data are fully aware that this internalbenchmarking is not delivering the value sought as they are unable to draw on wider
experience in seeking to apply lessons learnt.

Figure 4.2: Organisation and facilitation – Examples of other industries compared
to NPP decommissioning (with assumed starting point and vision)
The starting point
NPP decommissioning now
Internal data
Little external data (e.g. construction only)
Little or no collaboration
No best practice model
Non-global, but growing global demand

The vision
NPP decommissioning in the future

Developing capability
e.g. construction industry

External data capture and sharing
Independent verification/custodian
Strategic/tactical decisions supported
Support service menu
Global buy-inInternal/external collection/sharing
Data capture and sharing
Government policy requirements
Developing best practices
GlobalCurrent mature practicee.g. oil and gas industry
External sharing
Independent facilitation
Shared insight
Cost, schedule and project performance/maturity
GlobalBarrier: Obstacles to normalisation“The barrier is the inability to normalise the benchmark data, to a reasonable fit with thesubject of the cost estimate, because the benchmark lacks context to enable adjustment”(NEA, 2016a).
Normalisation, for the purposes of this report, means the process of conversion of actual
cost data (facility, project, phase, activity, etc.) that is not directly comparable to the subjectof the cost estimate (facility, project, phase, activity, etc.), into data that is comparable.
Normalisation allows assumptions and associated risks of the comparison to be identified.
Normalisation also enables like-for-like comparison and alignment of cost data.
Without it, the comparability of data would be misleading, presenting significant risk for
the user. Normalisation is about the need to account for the natural differences between
projects or activities – differences in what the actual benchmark cost data represents(facility, project, phase, activity) when compared to the subject of the cost estimate (facility,
project, phase, activity). This need to account for differences can also apply to the potential
use of benchmarks for historic end-stage/phase estimates of probable cost out-turn ranges
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BARRIERS AND ENABLERS

to check the out-turn forecast of a project, where assumptions made in the estimates should
also be understood.
Actual cost data needs to be reasonably aligned to the subject of the cost estimate. Thisactual cost data must provide the user with knowledge (including boundary conditions)and confidence sufficient to identify the differences between the subject and benchmark
projects and activities, as well as the risks in terms of the conclusions drawn fromcomparisons made. The quality of normalisation will inform the quality of the outcome
from the cost benchmarking (see Figure 4.3 below).
Figure 4.3: Benchmark components enabling the normalisation of cost data
Knowledge of what
the cost information
represents

Confidence in thecost information

Cost information

Actualbenchmarkcost data

Actual cost information without this supporting knowledge and confidence is a barrier
to normalisation, and in turn to introducing cost benchmarking approaches, a barrier that
was already identified in the NEA study Costs of Decommissioning Nuclear Power Plants (NEA,
2016a) as follows:
The diversity of views between and within countries, which are all boundary
conditions for establishing cost estimates, explains why benchmarking ofdecommissioning programmes and projects is very difficult, while
comparison is possible and recommended for similar activities or projectcomponents … lessons must be drawn from completed projects to better
understand the cost drivers which help define priority areas anduncertainties for cost estimates. In case the diversity of boundary conditions
does not allow real benchmarking from one country to another, comparisonsmight nevertheless be possible for specific activity or project components.
Normalisation at the whole project level or the activity level requires a degree ofknowledge about the benchmark, and has already been examined by the NEA study The
Practice of Cost Estimation for Decommissioning of Nuclear Facilities (NEA, 2015), whichconcluded that when comparing costs (i.e. benchmarking), “cost figures should not be taken
at face value unless these ten elements and their history are specified in comparative tables”. The
ten elements identified provide a minimum threshold for the knowledge integral to usablebenchmark cost data, and these elements are set out in Table 4.1.
Additional information is needed to support the understanding of and confidence in
actual cost data. This would include some or all of the following information set out inTable 4.2. Presenting cost data without this additional information runs the risk of limiting
the quality of the benchmarking that can be performed, whether this is at the wholeproject level or at the activity level.

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Table 4.1: Elements informing the quality of normalisation and comparison
Actual cost data benchmarks need to be accompanied by:
Scope of work through to the end-point of the site
Regulatory requirements, including details of reporting and clearance levels
Stakeholders’ demands
Characterisation of physical, radiological and hazardous material inventory
Waste processing, storage and the availability of ultimate disposal facilities
Disposal of spent fuel and on-site storage prior to emplacement in a deep geological repository
Clean structure disposal and use of the site for new developments
Contingency application and use in the estimates
Availability of experienced personnel with knowledge of the plant
Assumed duration of the dismantling and clean-up activities
Source: The Practice of Cost Estimation for Decommissioning of Nuclear Installations (NEA, 2015).

Table 4.2: Supporting information contributing to knowledgeof and user confidence in actual cost data
Type of information
Facility/project type
Scope of work planned
Scope of work delivered
Metrics defining the facility/project
Data defining the facility (e.g. inventory database)Timeline (schedule) achieved (overall, and by stage)
Basis of estimate +Structure of estimate +Work breakdown structure + (or recognised cost-reporting structure, e.g. ISDC)
Schedule and uncertainty analysis (historic) +Principal activities*
Decommissioning process
Activity groups*
Activities*
Cost categories
Definitions for cost items*
Project performance information (planned and actuals)
Facility/project delivery strategy (planned and actuals)
Procurement strategy (planned and actuals)
Waste management strategy (planned and actuals)
End-state delivered (planned and actuals)
Independent validation of cost information; data is traceable
Assumptions and boundary conditions* (as below)
Scope of work through to the end-point of the site
Regulatory requirements, including details of reporting and clearance levels
Stakeholders’ demands
Characterisation of physical, radiological and hazardous material inventory
Waste processing, storage and the availability of ultimate disposal facilities
Disposal of spent fuel/on-site storage prior to emplacement in a permanent (e.g. geological) disposal facility
Clean structure disposal and use of the site for new developments
Provisions for estimating uncertainty and risk – application and use in the estimates
Availability of experienced personnel with knowledge of the plant
Assumed duration of the dismantling and clean-up activities
Notes: Items marked with a + are identified in The Practice of Cost Estimation for Decommissioning of Nuclear Installations(NEA, 2015), and those marked with a * + are identified in International Structure for Decommissioning Costing (ISDC) of
Nuclear Installations (NEA, 2012).

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Barrier: Low maturity in cost benchmarking
The nuclear decommissioning industry has not developed enough maturity in costbenchmarking approaches through its experience in applying them, nor has it built a trackrecord of adding value through their application. This current lack of experience andmaturity in cost benchmarking discourages stakeholder engagement.
Cost benchmarking develops maturity through an iterative development cycle as
illustrated in Figure 4.4. The limited number of examples of fully completed NPP
decommissioning projects to has contributed to the lack of maturity in cost benchmarking.
With little actual cost outcome data available, and because available data is not currently
being shared, projects have become accustomed to constructing estimates without thebenefit of external cost benchmarking. Similarly, decision makers have become
accustomed to approving projects without any reference to established cost benchmarks.
When projects are completed, these projects are not in the habit of sharing their outcomeswith others, as they themselves did not originally benefit from the help of others in thisregard. The cost benchmarking maturity development cycle outlined in Figure 4.4 is thus
broken. Instead, a lack of demonstrable value combined with other obstacles creates abarrier to building the industry support and investment necessary to “kick-start” thedevelopment of a cost benchmarking approach and bring it to maturity.
Figure 4.4: Cost benchmarking maturity development cycle
Actual project cost data
Data collection (project, facility,
activity) and analysis(contextualisation)

Successful delivery outcomes
Fewer surprises and reduced
apparent cost escalation; captureof actual costs and context

Estimating and challenge
capability
Comparison and analysis(e.g. project, facility, phases,
activities, norms and rates)

Better strategic and project
management decison making
Improved cost estimation andbetter understanding of
uncertainty, risk and optimism

Barrier: Competition law
The requirement for co-operation agreements to be aligned to applicable competition law
will need to be accommodated by any organisation of parties who agree to the sharing of
cost data and cost benchmarking. The requirements of such alignment requires additional
analysis beyond the scope of this report.

4.2. Cost benchmarking approaches – Enablers for the removal of barriers
As illustrated in Figure 4.5, some dependencies for being able to develop cost benchmarking
approaches currently exist.

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Figure 4.5: Dependencies for benchmarking approach development

Agreement andcommitment toremove barriers

Critical mass ofinterest groups

Other obstacles
contributing tobarriers removed
or accepted

Barriers removed

Benchmarkoption selection
and maturity
development

Actual cost data is not yet available to support external cost benchmarking, at projector activity level, with the possible exception of a subset of activities common to nonspecialist construction work. The availability of actual cost data is considered a key starting
point in the development of cost benchmarking, because it can incentivise and motivate
the industry to engage and invest in benchmarking. With data availability and associatedindustry investment comes the potential ability to conduct normalisation and develop
benchmarking maturity. Once the absence of actual cost data is addressed as the starting
point for enabling cost benchmarking to develop, then there is still the problem of
demonstrating value. This evidence of value is necessary to begin engagement, encourage
industry participation, and spur investment to capture and share actual cost data.
The challenge will be engaging organisations responsible for planned future NPP
decommissioning in cost benchmarking with those that have progressed through similar
decommissioning projects, and so have (or will have) valuable actual cost data to input. 1
In other words: “How do we get the right people and organisations in a room, who will together
agree that benchmarking is a good idea because of the benefits it provides, and who are prepared tomake benchmarking happen?” This is the overarching challenge to enable the removal of
barriers.
A “critical mass” of participants and facilitation is necessary to initiate thedevelopment of cost benchmarking. This coming together of organisations with the mostvalue to gain from cost benchmarking is considered essential for the development of a
viable cost benchmarking approach.
Figure 4.6: A critical mass for barrier removal and cost benchmarking development
Potential beneficiaries and consumers
of benchmarking
Those stakeholders with the greatest need for value frombenchmarking, who can justify the investment

Facilitation of barrier removal
Resource and governance that removes barriers

Facilitation of benchmarking

Stakeholders with relevant data

Resources and governance that meet the
stakeholders' (i.e. interested parties) requirements forvalue and maintains enablers for barrier removal

Those stakeholders with data that can add value tobenchmarking; the data relevant to the decommissioning
planned by the potential beneficiaries and consumers

Also essential is the engagement of stakeholders with data capable of being shared. It
is the organisations with the greatest decommissioning challenges in terms of overall costthat can expect the greatest value from benchmarking. The organisations that can justify
the investment in benchmarking can form the critical mass to get an initiative started. The
beneficiaries and consumers of cost benchmarking are the principal organisations anddecision makers responsible for planned future NPP decommissioning, as illustrated in
Figure 4.6.

1.

An approach to obtaining market and interest group perspectives is set out in Appendix 4.2.

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Drivers for the enablers – The likely demand for cost benchmarking
The demand for decommissioning cost benchmarking services could provide the impetus
to overcome the challenges of their implementation. Fewer than 20 NPPs have completed
the decommissioning process to date and a further 173 NPPs are in permanent shutdown,with varying plans and schedules for decommissioning. 2 Industry estimates indicate thatan additional 200 NPPs will be shut down over the upcoming two decades, from the450 NPPs in operation worldwide today. The demand for cost benchmarking to support
improvement in cost estimation and decision making is expected to increase ahead of thisplanned shutdown of reactors. Potential demand could also be expected from those
assessing decommissioning costs when planning new NPPs, and in developing thebusiness cases for such investments. All future NPP decommissioning projects could
benefit from the sharing of benchmark data from completed projects and from those forwhich decommissioning planning is more mature.
The market for cost benchmarking data for NPP decommissioning is therefore
considered real, and the countries that might benefit the most are those with the largest
number of NPPs. In most countries, the operator or owner is responsible for thedecommissioning costs, and thus these operators/owners would be the primary
beneficiaries and consumers of cost benchmarking.
In such a context, there is a significant risk that the absence of a demonstrable benefit
and value from cost benchmarking prevents or delays the capture and deployment of theactual cost data required to demonstrate the benefit. Stakeholders might choose to rely
upon their own accumulated data for detailed cost estimating, or on published ranges(see NEA, 2016a) for overall NPP decommissioning costs. Mitigation of this risk requires thedevelopment of value-added benchmarking in the industry, which depends on building acollaborative case and gaining widespread stakeholder buy-in. Stakeholder buy-in should
focus on those who will have the ownership of actual cost data produced by ongoing andnear-term projects (the suppliers of data), and those with responsibility for near-to-longterm projects (the demand for the data).
Some stakeholder organisations will be on both the supply and demand side ofbenchmark data, and as such there is a risk that they choose to remain independent fromany collaboration, preferring to protect their commercial position. In other words, though
the industry would benefit by collectively agreeing to invest in and “trigger” thedevelopment of cost benchmarking, there is a risk that gaining buy-in to collaborate in costbenchmarking might be difficult for the owners of data, and those with little or no future
requirements for cost benchmarking.

Enablers for barrier removal (a two-stage approach)
Given the interdependent nature of the barriers, they would need to be addressed together,and not individually. Implementation of these enablers should be considered as the firstof a two-stage approach to barrier removal. Once these are removed and the critical massis built, then the more detailed barriers can be addressed (see also Appendix B.1).
The first stage enablers for removal of barriers to cost benchmarking are outlined in
Figure 4.7.
The relative lack of actual cost data in relation to NPP decommissioning is afundamental issue. Its development is dependent upon delivery and completion of NPP
decommissioning projects, from which useful data can be drawn. While the collection andsharing of actual cost data is the fundamental start-point for maturing the benchmarking
process, it is unlikely to happen without a collective, collaborative industry approach that2.

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BARRIERS AND ENABLERS

would provide a “trigger” for investment in, and conducting of, organised collection of
actual cost data.
Furthermore, the demand for, and the optimum time for using such actual cost data
(e.g. in assessments of likely future liabilities or for approval of project business cases) is
likely to largely precede its availability from completed projects. Many of the projects
delivering actual cost data will not be completed in the near term, delaying availability ofthe data. There is therefore a significant issue for the industry: how to trigger andencourage investment in data collection and sharing today, while not being able todemonstrate the immediate value to many of the potential users of cost benchmarking
until a point in the future when well-defined actual cost data would become available?
This issue might be addressed by prioritising the collection of data that is of greatest added
value to globally planned types of projects, and activities most relevant to the majority ofretiring NPPs (e.g. activities that are at the forefront of similar decommissioning projects,
and/or with significant repeat elements and activities).
Figure 4.7: Enablers for the removal of barriers to cost benchmarking

Independent
organisation andfacilitation
representing theindustry

Collective andcollaborative
industry buy-in todevelop andmaturebenchmarking

An agreed industry
strategy and plan,
to develop maturity
and prioritise future
demand for
project/activity
type

Barriers

Actual cost data
contextualised withknowledge andconfidence so thatit can be
normalised

Enablers for datacollection andsharing barriersCollective industry
investment

Enablers: Other industry experience
Lessons learnt and practices observed from other non-nuclear industries provide somerelevant insights into a possible way forward for benchmarking NPP decommissioning costs.
A number of examples of enablers for benchmarking in relation to each of the barriers
are shown in the tables below. The information presented has been identified from theconstruction sector (Table 4.3) and from the oil and gas industry (Table 4.4). Where thebarrier has been successfully addressed, the status column is green, and where it has been
partially addressed, the status column is amber.

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BARRIERS AND ENABLERS

Table 4.3: Examples of benchmarking enablers in the construction sector
Barrier

Enablers for benchmarking in the construction sector

StatusNo incentive forindustryengagement

Activity-level benchmarking used to build bottom-up cost estimates for projects.
Industry commercially supports the capture of data. Unit rates (e.g. per square metreof facility) applied to early planning. Project or sub-project-level data is used.

Addressed

No investment inorganisation andfacilitation

Independent organisation (RICS, BCIS) established 50 years; collects, collates,
analyses, models and interprets cost information. International coalition to promotebenchmarking initiatives globally (ICMS).

Addressed

Absence of actual
cost data

Data collected globally through independent sector institution (RICS). RICS makes
cost information accessible through data licensing and publications.

Addressed

Obstacles tonormalisation

Normalisation is carried out by the organisation accessing the data. “International
Construction Measurement Standard: Global Consistency in Presenting Construction
Costs” provides a framework against which costs can be classified, measured,
recorded, analysed and presented.

Partially
addressedLowbenchmarking
maturityCompetition law

RICS Guidance Note, “Cost Analysis and Benchmarking”, published in 2013, providing
recommended good practice; plans for development of maturity not available.
Agreements aligned to applicable competition law. Cost information accessible
through data licensing and publications.

Partially
addressed
Partially
addressed

Sources: Cost Analysis and Benchmarking (RICS, 2013); Global Trends in Data Capture and Management in Real Estate and Construction (RICS,
2017); Sharing construction cost data – benefits, challenges and opportunities (RICS, 2018).

Table 4.4: Examples of benchmarking enablers in the oil and gas industry

32

Barrier

Enablers for benchmarking in the oil and gas industry

StatusNo incentive forindustryengagement

Industry has considerable experience in cost and schedule challenges in new-build
developments. Executive decision makers require industry benchmarks as part ofbusiness case approval process. Operators routinely benchmark themselves withregard to project outcomes, with net present value (profit) incentive for better
performance readily apparent. Some countries also have governmental authorities
that mandate the delivery of cost and schedule outcome data for subsequent use inbenchmarking new decommissioning business cases, as part of the review andapproval process.

Addressed

No investment inorganisation andfacilitation

Several, long-established, major independent cross-industry collaboration groups, inwhich most operators participate (some operators participate in more than one). All
groups are managed by private sector enterprises, and most oil and gas majors
participate, with their data suitably anonymised. Some major corporates alsoorganise and share their internal data within their divisions.

Addressed

Absence of actual
cost data

Large numbers of completed new-build developments have populated anddeveloped the benchmarking systems. Decommissioning data is now being applied
into pre-existing working tools and practices. Some differences between geographies
limit the utility of data; e.g. decommissioning data more prevalent for Gulf of Mexico
assets than for North Sea.

Partially
addressed

Obstacles tonormalisation

Very few: normalisation typically performed in a standardised manner based on
structured input from operators. The similarity between decision making processes
among operators allows for relatively easy comparison, not just for whole-project
outcomes but for cost and schedule at various stages within projects.

AddressedLowbenchmarking
maturity

Benchmarking mature. Consortia have developed to perform value-adding services
around basic cost and schedule benchmarking; for example, the undertaking ofindustry studies on areas of common interest; and the benchmarking of project
maturity at stage gates. Some major international oil companies mandate use of
maturity assessment by third parties as part of their internal decision making process.

Addressed

Competition law

Agreements aligned to applicable competition law by the collaboration groupmanagers and participants.

Addressed

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The above descriptions from other industries of example enablers for costbenchmarking suggest that some key enabling or desirable characteristics will need to beconsidered to support a range of options for initiating value-added cost benchmarking for
NPP decommissioning (see summary in Table 4.5).

Table 4.5: Characteristics that need to be considered to support options
for cost benchmarking NPP decommissioning
Type of enabler

Contribution

Commitment: Industry buy-in to collaborate and invest in
development

A collective alignment recognising the benefits and value
needed, and common agreement to develop costbenchmarking maturity

The right stakeholders: Principal stakeholders are thosewith strongest potential demand for value, and those who
can supply the actual cost data fitted to the demand

Input to the benchmarking process, especially data

Organisation and governance: A clear governance forengaging in and managing the process and procedure ofcost benchmarking

A framework (structure, process, procedure) for datacollection, sharing and cost benchmarking, which
addresses the stakeholder issues and barriers

Independent facilitator/managed service provider
responsible for data collection and sharing – collects,
collates, analyses, models and interprets cost information

Resources to implement cost benchmarking to support
governance and deliver independent services to meetstakeholder requirements; hosting of benchmark data;normalisation of data; structuring and anonymisation of data

Demonstrable value-adding outcome

Monitoring and capture of lessons learnt to demonstratethat the benefits sought are being delivered, and maturity
is developed

4.3. Collecting and sharing data – Barriers
What form of data is required?
As discussed in Section 3.2, to provide value to the different stakeholder types identified,cost benchmarks could represent two principal types or levels:•

Project level: Whole-project phase estimate ranges, accompanied by actual wholeproject out-turn.

•

Activity level: Actual cost information at the sub-project, facility and activity levels(e.g. at ISDC levels 2 and 3).

To add value, both of these levels of benchmarking need to be accompanied by theknowledge and confidence in what the estimated and actual cost represents. When
combined together in a form to allow normalisation, the cost information, knowledge andconfidence become usable benchmarks.
In this context, the cost benchmarking data required provide the information needed
to challenge and to justify decisions to secure funding. The data can be used to underpin
the basis for the decommissioning plans and budgeting of the baseline cost. It is only
through providing the necessary data that cost benchmarking will be able to provide thevalue sought by the different stakeholder group audiences for these two approaches.
Different levels of actual cost data are required to support delivery of project-level andactivity-level cost benchmarking. The different levels of cost data required are summarisedin Table 4.6.

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BARRIERS AND ENABLERS

Table 4.6: Cost data requirements for project-level and activity-level benchmarking
Actual cost data required to support
whole-project level cost benchmarking

Actual cost data required to support
activity-level cost benchmarking

Facilities and projects

Facilities and projects

Project stages

Project stages

Record of estimated cost ranges

Record of estimated cost ranges

Principal activities*

Principal activities*
Activity groups*
Activities*

Note: * indicates an item identified in International Structure for Decommissioning Costing (ISDC) of Nuclear
Installations (NEA, 2012).

Although actual cost data is required, because it represents a project that has developed
maturity and delivered a defined end-state, there is significant value to audiences
understanding the path to maturity since it leads to an understanding of the lessons
learnt from experience in similar projects. The experience will be in the form of cost outturn ranges estimated at defined stages in the project lifecycle, compared to the actual
cost out-turn. In this case, benchmarking is of particular, potential benefit to the executive
decision makers.
The supporting information requirements of both actual cost data and estimatedwhole-project cost ranges are extensive. Collecting and sharing such detail assumes thatthose who generate and own the data are prepared to invest in their capture in a coherent
usable form, such as the ISDC reporting format or other aligned work and cost breakdown
structures. Absence of a common reporting structure is considered a barrier, as it would
hinder the collection (supply) of cost data, with appropriate supporting information.

The requirement for data collection and sharing
Data collection and sharing is a critical factor for benchmarking. With other enablers, it isfundamental to start the unlocking of value from, and development of maturity inbenchmarking.
The requirement is to capture the actual cost data, and historic estimated wholeproject data on probable cost ranges. This data collection and sharing must satisfy demand,deliver added value and satisfy stakeholder sensitivities.
Some actual cost data collection is practised within individual stakeholder
organisations. However, evidence suggests that the interpretation of the actual cost data
is often problematic as a result of the absence of context in the form of supporting
information. This absence of data can be linked to a lack of disciplined and structured data
capture but also to knowledge loss (“poor corporate memory”) within organisations dealing
with very long-term projects. A disciplined, clearly governed system of actual cost data
capture and management is essential to data collection and sharing.

4.4. Collecting and sharing data – Enablers
Removing the barriers for data collection and sharing
The agreement, investment and co-operation of stakeholders necessary for the removal of
barriers to cost benchmarking will need to be reinforced by an approach specificallydesigned to remove barriers to data collection and sharing. In other words, enabling theremoval of some or all of the particular barriers to data collection and sharing cited byindustry will be essential (see Appendix A).

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BARRIERS AND ENABLERS

The task of enabling the removal of these data collection and sharing barriers, as wellas other concerns, should not be underestimated, and plans should fully recognise thesignificant challenges involved.
This assessment has considered barriers in turn and taken lessons learnt andobservations from other industry practice. It has categorised each barrier by its “removeability” and identified potential options for removal of the individual obstacles. It has been
observed that some barriers cannot be removed and will remain confounding factors,
i.e. things that cannot be controlled or eliminated, and these barriers might remain
detrimental to cost benchmarking outcomes.

Considerations for data collection and sharing to support value-adding benchmarking
Many risks are involved in establishing and managing the data collection and sharing
process. The principal risks identified in this assessment are summarised in Table 4.7.

Table 4.7: Considerations for data collection and sharing

Data collection

Stakeholder buy-in

Risk – “There is a risk that…”

Impact

The demand for actual cost data is not understood and the supply
is not/cannot be aligned to the demand

Approach not aligned to themarket/industry

The market is not convinced of the benefit until this isdemonstrated, and investment to kick-start development isinsufficient

Little engagement or support toestablish approaches that remove theheadline barriers to benchmarking

There are no institutions and facilitators prepared to invest in
developing an approach because of the low maturity
base/perceived lack of benefit

Rules out options that are working inother industries

The timeline and investment to realise benefit is significant

Initiatives stall or fail to advanceA common approach to governance cannot be agreed acrossindustry stakeholders (suppliers and users of data) – insufficient
removal of barriers

Initiatives stall or fail to advance

Expectation for collection and sharing, and the development of
maturity and release of added value, is too high – turning off
interest and investment

Initiatives stall or fail to advanceThe sources of data are limited, constraining the growth of datacollection such that it cannot support the demand, and so maturity
development is slowed

Limited usefulness of collected data.

The actual cost information currently available for collection
cannot be contextualised (i.e. with knowledge and confidence),
and is not usable

There are little usable data

The historic estimates of ranges and actual out-turn for completed
facilities/projects is not available or cannot be contextualised

There are little usable data

The actual cost data collected is not convertible to the selectedreporting/cost breakdown structure, and cannot be aligned tomarks

There are little usable data

No agreement can be reached on a common cost breakdown
structure; there is no incentive to align, e.g. because the benefit islong term

There are little usable data

The actual cost data is not validated or independently assured andis perceived as carrying risk that outweighs the potential benefit

The benefit is questionable and use
could build in additional risk – loss ofcredibility

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BARRIERS AND ENABLERS

Table 4.7: Considerations for data collection and sharing (cont’d)Data management and sharing

Risk – “There is a risk that…”

ImpactThere is a very large volume and complexity of actual cost datawith many variables, assumptions, uncertainties and risks requiring
management

A database will be required to manage
and allow interrogation, and sharing of
the cost data

The management and sharing of collected data is informing
business critical decisions; transparent assurance of the model andoutputs is required

Agreement across industry would be
potentially onerous

Shared actual cost data cannot be sufficiently interrogated andnormalised by the stakeholder users leading to credibility issues

There are little usable data

The data shared is so heavily qualified or caveated that their value
becomes questionable

Credibility and reputational issue

Stakeholders become dissatisfied with the sharing service and/or
require market testing to satisfy procurement requirements

Flexibility to re-compete is needed

Is a database required?
Less complex options for cost benchmarking might operate with a simple spreadsheet
collection and sharing tool, or the mutual publication of reports. More advanced types of costbenchmarking usually involve the building of a database, in particular one that is suitably
assured as a business critical model. Lessons from other industries show that the complexityand volume of data collected, the ability to accumulate, maintain and interrogate it over asignificant period, and the provision of online access, will necessitate a database. The
barriers for participation in terms of commercial and security sensitivities also point to a
database solution with appropriate physical and cyber protection.
Advantages and disadvantages of using a database to collect, manage and share actual
cost data are summarised in Table 4.8.

Table 4.8: Cost databases: Advantages and disadvantages
Advantages

Disadvantages

Control – e.g. error management

Complexity

Data analysis and management

Design and development

Complex search queries

Significant resources

Multiple users

Upfront and ongoing financial resources

Displaying summary datasets

Maintaining security – risk; location; data integrity

Data summary reports

Compatibility

Repetitive data sequences
Complexity
High volume of data handled > spreadsheets
Scalable database architectures for future growth
Data integrity
Speed of dataset manipulation
Stable control – access and user restrictions/records
Efficiency

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BARRIERS AND ENABLERS

4.5. Enabling cost benchmarking data collection and sharing – Options
Data collection and sharing is an integral part of the cost benchmarking option selection.
Some preliminary overarching considerations are identified in this regard for a costbenchmarking strategic business case in Table 4.9.
Table 4.9: Preliminary considerations informing cost benchmarking,data collection and sharing options
Set cost benchmarking strategy, which datacollection and sharing is required to support
Costbenchmarking
strategic
business case• overview;• strategy and aims for benchmarking;• existing arrangements;• business (market needs and demand);• scope of benchmarking (service).

Define the scope of data collection/sharing• define the subject cost estimates that the
stakeholder demand for benchmarking identifies –in terms of facility, project, principal activity, group
activity and activities;• prioritise the data by type, and develop a (phased)
plan for capture;• define the actual cost data and the information thatwill support and contextualise them – i.e. theknowledge and confidence in what they represent;• define where the responsibility sits for datacollection and management;• agree a consistent cost breakdown structure
appropriate to the above;• consider support and technology to collect, manage
and share the data;• define the required validation and assurance of data.

Summary options for cost benchmarking, including data collection and sharing
This assessment explores a range of generic options for data collection and sharing. The
options examined range from doing nothing to introducing cost benchmarking
arrangements of increasing sophistication and degree of organisation. The options include
examples where organisations capture and maintain their own data, and options with anindustry-wide, managed service, governed by an independent institution. The outcomesof this analysis are summarised as Options A to F in Table 4.10. 3 A more detailed
description of these options is set out in Appendix B.3.
All of these options offer a range of potential advantages and drawbacks. It should be
noted that the costs of these options were only assessed in general, relative terms. All ofthese options will also need to be assessed under competition law, as this issue was notconsidered in detail as part of this preliminary assessment. Lastly, it should be noted thatfor all these options, the removal of the initial barriers to benchmarking is assumed. Thus,a more in-depth and thorough analysis of options than was possible in this preliminary
review would be needed before proceeding with the choice of any one particular option for
implementation. A preliminary period of stakeholder and market consultation should be
included as part of a phased roadmap to identify and implement cost benchmarking.

3.

The tables are presented in ascending order of complexity with a relative cost ranking from low(green) to high (red). The options are characterised according to a “red, amber, green” (RAG)
coding, describing the expected success of the option in removal of the barriers, (red = notremoved; amber = partly removed; green = removed).

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BARRIERS AND ENABLERS

Table 4.10: Generic options (A-F) for data collection and sharing
Option A: Internal/isolated data collection and sharing
Obstacles tonormalisation

Lowmaturity

R

R

R

No incentive for No investment inorganisation/industry
facilitation
engagement
R

Satisfies added
value beingsought?

Relativeorder of
cost

R

Low

R

Satisfies added
value beingsought?

Relativeorder of
cost

R

Low

R

Relativeorder ofcost

RatingAbsence ofactual cost
data

RatingSupports removal of the headline industry barriers to cost benchmarking?

RatingInternal
collection;
no external
sharing

Moderate

R

R

Commentary: Potential isolated internal benefit. No learning or value is added.
Option B: Raw data/isolated data collection and sharing
Internal raw
data
collection;
isolated
sharing

Supports removal of the headline industry barriers to cost benchmarking?
Absence ofactual costdata
A

Obstacles tonormalisation
R

Low
maturity

No incentive
for Industry
engagement

No investment inorganisation/
facilitation

R

R

R

Commentary: Potential isolated internal benefit. No normalisation, learning or value added. Risk from use of raw data.
Option C: Contextualised data/peer group collection/sharing arrangement
Actual costdata
collection;
isolated peer
sharing

Supports removal of the headline industry barriers to cost benchmarking?
Absence ofactual costdata

Obstacles tonormalisation

Lowmaturity

No incentive
for industry
engagement

No investment inorganisation/
facilitation

A

A

A

A

R

Satisfies added
value beingsought?
R

Commentary: Potential benefit in aligned stakeholder groups. Considered unlikely that data collection/sharing barriers would allow use
beyond alliances or formally related organisations.
Option D: Facilitated member group data collection/sharing arrangement – no normalisation

Lowmaturity

No incentive
for industry
engagement

No investment inorganisation/
facilitation

G

A

G

A

G

Relativeorder ofcost
ModerateA

Relativeorder of
cost
High

A

Satisfies added Relative
order ofvalue being
cost
sought?

RatingObstacles tonormalisation

RatingSupports removal of the headline industry barriers to cost benchmarking?
Absence ofactual cost
data

RatingActual costdata
collection
and sharing
by 3rd party

Satisfies added
value beingsought?
A

Commentary: Potential benefit in aligned stakeholder groups. Stakeholders carry the normalisation risk.
Option E: Facilitated industry collection and sharing arrangement – Data published with no normalisation
Managedcollection,
sharing andbenchmarkservice

Supports removal of the headline industry barriers to cost benchmarking?
Absence ofactual costdata
G

Obstacles toLownormalisation maturityA

G

No incentive No investment infor industry organisation/
engagement facilitation
A

Satisfies added
value beingsought?

G

G

Commentary: Potential benefit in aligned stakeholder groups. Stakeholders carry normalisation risk.
Option F: Rich functionality with facilitated member group collection/sharing arrangement and normalisation
Managedcollection,
sharing andbenchmarkservice

Supports removal of the headline industry barriers to cost benchmarking?
Absence ofactual costdata

Obstacles tonormalisation

G

G

Low
maturityG

No incentive
for industry
engagement

No investment inorganisation/
facilitation

G

G

G

High

A

Commentary: Potential benefit in aligned stakeholder groups. Stakeholders trust in third party data sharing and normalisation.
Note that each of the options C to F assume the removal of the initial barriers to cost benchmarking. The first stage towards enabling
this removal is that the right stakeholder organisations are brought together to form a critical mass, agreeing that cost benchmarking
will add benefit. This barrier removal remains a significant risk to implementation of these options, and the timescale for implementationof cost benchmarking. A preliminary period of stakeholder and market consultation should therefore be provided for as part of a phased
roadmap to identify and implement cost benchmarking. An approach to this type of consultation is outlined in Appendix B.2.

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CONCLUSIONS AND RECOMMENDATIONS

Chapter 5. Conclusions and recommendations

5.1. Summary of findings
Cost Benchmarking for Nuclear Power Plant Decommissioning is intended to provide policy
makers, regulators, strategy and decision makers with a preliminary description and analysisof the cost benchmarking practice and methodology in the context of decommissioning
nuclear power plants (NPPs). It therefore discusses approaches to cost data sharing andanalysis, as well as the development of cost benchmarking approaches that could be
implemented for NPP decommissioning, taking into account related developments in otherbranches of industry.
Preliminary analysis presented in Chapter 2 concerning the potential added value of
cost benchmarking suggests that a variety of stakeholder groups can benefit from such an
exercise. The analysis demonstrates that regulators and authorities, as well as executive
decision makers from operators and funding bodies, are the stakeholders who would
benefit most from project-level cost benchmarking of the cost and schedule. Programme
and project teams, and the wider supply chain, would also benefit from activity-level costbenchmarking. This report notes that a degree of overlap may exist between these twoclusters of stakeholders. The choice of relevant metrics and the approaches to normalisingdata, as well as the selection of indicators to be followed, tends to vary depending on which
type of cost benchmarking comparison that was deemed most relevant to the particularstakeholders concerned.
The discussion in Chapter 3 of cost benchmarking approaches in other industries
highlights the considerable amount of experience with a variety of approaches to costbenchmarking, which could serve as useful models for developing cost benchmarking for
NPP decommissioning. More developed cost benchmarking practices in other industries
typically involve the creation of standardised international comparisons for project
outcomes, supported by centralised databases and by layers of supporting services withvarying degrees of sophistication and centralisation. These services are designed to ensure
the comparability of data by facilitating consistent inputs and outputs. A variety oforganisational models exist, and the choice of a particular model would need to be tailored
to meet the objectives of the entities involved. In the nuclear industry, some cost databases
and analytical services are currently in place at the national level or within individualorganisations. Some data is held at the governmental level, some at operator level and someat the supply chain level.
While the specific focus of this report is on the application of cost benchmarking in thecontext of NPP decommissioning, the approaches considered here are nonethelessrelevant to the decommissioning of other nuclear facilities. Experiences from some otherindustries suggest that the scope need not be limited to only the cost benchmarking of NPP
decommissioning, but that a cost benchmarking service for the decommissioning of
nuclear power plants might be broadened to cover a wider range of decommissioning
situations, or even activities beyond decommissioning (e.g. the provision of infrastructure
for radioactive waste management or disposal). Such considerations were, however,beyond the scope of this preliminary assessment. In general terms, it should be noted that
there may be a trade-off between maintaining a narrower, more precise focus on costbenchmarking with a more limited dataset (e.g. broadly comparable facilities and activities,

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CONCLUSIONS AND RECOMMENDATIONS

such as NPP decommissioning), versus having a broader focus, with a potentially larger
dataset (e.g. decommissioning of a much wider range of nuclear facilities, or evenenlarging the focus beyond decommissioning).
In this context, it should be noted that international cost benchmarking approaches are
typically supported by a common cost-reporting structure. For NPP decommissioning, aninternationally developed cost structure has already been developed and is presented in theInternational Structure for Decommissioning Costing (ISDC) of Nuclear Installations (NEA, 2012).
The ISDC was developed primarily as the international standardised structure to present
costs for NPP decommissioning projects, but it would be suitable for use in thenormalisation of data in the cost benchmarking context. Examples of experiences in the useof the ISDC in this way were presented, for example, in Costs of Decommissioning Nuclear
Power Plants (NEA, 2016a), which also includes some principles and results of conversions
from different cost estimation presentation formats into the ISDC. Although the ISDC wasdeveloped in a way that could be adapted to the decommissioning of other types of facilities,
only the IAEA has done so at the international level for research reactors, in the context of
the DACCORD programme (IAEA, 2017). To date, there are no international agreed cost
structures for the decommissioning of other types of nuclear facilities, or for the provisionof radioactive waste infrastructure.
Chapter 4 of this report identifies a large number of perceived barriers that may impede
the implementation of benchmarking for NPP decommissioning. Other industries havedemonstrated means to overcome such barriers, while providing models for international
co-operation that could be used also for nuclear decommissioning.
The removal of these barriers to the implementation of benchmarking for NPP
decommissioning will require co-ordinated efforts. Moreover, in order to be able to selectand implement a particular option, it will be necessary to analyse potential barriers in moredetail than was possible in this preliminary review. In particular it should be noted thatcompetition law aspects are not considered in detail as part of this preliminary assessment.

5.2. Options for benchmarking for NPP decommissioning
Among the alternatives considered in this preliminary review of cost benchmarking, andbearing in mind the preliminary nature of this assessment and the caveats identified above,
Option F appears to offer the greatest added value for NPP decommissioning. This option
is characterised in the report as having a “rich functionality with facilitated member groupcollection/sharing arrangement”. The summary profile for Option F is presented inTable 5.1 as “green” (where green = positive), because of the extent to which the option is
expected to remove the barriers to benchmarking described in the report. To implement
this option, a distinct organisation would likely need to be set up, or an existingorganisation designated, to create and support a centralised database for project data. This
organisation would supervise inputs and outputs, ensuring that aspects such as
requirements for anonymisation and normalisation of the data are respected. Pursuing
Option F would thus involve significant efforts, which would include the creation of aninternational approach incorporating nuclear regulators, authorities, operators and the
supply chain, as well as co-operation in sharing cost and schedule data, and making use of
relevant outputs to meet the particular needs of individual stakeholders.

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CONCLUSIONS AND RECOMMENDATIONS

Table 5.1: Summary profile for Option F (extract from Table 4.10)
Option F: Rich functionality with facilitated member group collection/sharing arrangement + normalisation
Supports removal of the headline industry barriers to cost benchmarking?
Absence ofactual costdata

Obstacles tonormalisation

G

G

Low
maturityG

No incentive
for industry
engagement

No investment inorganisation/
facilitation

G

G

Satisfies added Relative
order ofvalue being
cost
sought?
G

RatingManagedcollection,
sharing andbenchmarkserviceHigh

A

Commentary: Potential benefit in aligned stakeholder groups. Stakeholders trust in third party data sharing and normalisation.

5.3. A possible roadmap for the implementation of benchmarking
A series of co-ordinated steps or a roadmap would be required to implement costbenchmarking at the international level in the manner described, for example, in the caseof Option F. The series of steps is illustrated in general terms in Figure 5.1 below.

Figure 5.1: Benchmarking implementation roadmap

Selection of aninternationalorganising entity

Mobilisation (legal
agreements)

Implementation(database construction
and population)

Steady state andevaluation (delivery ofbenchmarking service)

Step 1 – Selection of an international organising entity
A critical mass of stakeholders would need to be interested in participating in such anentity, for example a group of operators and national authorities with significant data,
willing to share this data across international borders. Furthermore, this group would alsoneed to select or create a distinct organising entity to oversee the initiative. Given theinternational nature of the envisaged collaboration, the primary options would likely be
co-operation through some form of international organisation, or in the private sector.
Examples exist of both types of organisational approaches, and a choice of a particularorganisational model would require a more in-depth analysis.

Step 2 – Mobilisation
A legal agreement would need to be established outlining the participating entities, theirrelationship with each other and their relationship with the organisation selected or
created for the benchmarking service. This agreement would identify the duties andobligations of the parties, the services they would receive in turn for participation, and any
exit strategy, for example in the case that a restructure occurs, a participant leaves, or thebenchmarking service is discontinued. The agreement would also address therequirements for additional entities joining the service after it has already been established.

Step 3 – Implementation
The cost benchmarking organisation would establish the database requirements andinfrastructure, organise the services around input and output of data, and commence
population with any available pre-existing data from participating members. The schedule
for population would likely be driven by the availability of, and needs for, particular data,
as well as comparisons by participating entities. The service would begin to be useful even
before all data categories were fully populated.
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CONCLUSIONS AND RECOMMENDATIONS

Step 4 – Steady state and evaluation
Participating entities would regularly review the implementation, evaluate usage and theusefulness of the services, while continuing to refine and develop the service.
The sort of international co-operation envisaged for Option F would likely take anumber of years to establish.

5.4. Moving forward
The relatively large number of NPPs internationally, as well as the considerable costs andlong time frames envisaged in NPP decommissioning, suggest that benchmarking
approaches for decommissioning costs deserves much greater attention. Other industries
have led the way in demonstrating how cost benchmarking can provide valuable insights
for managing costs and improving project delivery. Implementing such a service for NPP
decommissioning, or for decommissioning more generally, will require international
collaboration across the industry. The recommendations outlined in this report offer a way
forward to proceed with a more detailed discussion and evaluation of options to develop
and implement cost benchmarking for the decommissioning of nuclear power plants.

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REFERENCES

References

IAEA (2017), Data Analysis and Collection for Costing of Research Reactor Decommissioning, TECDOC1832, IAEA, Vienna, www-pub.iaea.org/MTCD/Publications/PDF/TE1832_web.pdf.
ICMSC (2017), “International Construction Measurement Standards: Global Consistency in
Presenting Construction Costs”, International Construction Measurement Standards
Coalition, London, 1st Edition, www.rics.org/globalassets/rics-website/media/upholdingprofessional-standards/sector-standards/construction/icms-standard-rics.pdf.
Invernizzi, D.C., G. Locatelli and N.J. Brookes (2017), “How Benchmarking can support the
selection, planning and delivery of nuclear decommissioning projects”, Progress in
Nuclear Energy, Vol. 90, pp. 155-164, http://dx.doi.org/10.1016/j.pnucene.2017.05.002.
Locatelli, G. (2018), “Why are Megaprojects, including Nuclear Power Plants, Delivered
Overbudget and Late? Reasons and Remedies”, Report MIT-ANP-TR-172, Center for
Advanced Nuclear Energy Systems (CANES), Massachusetts Institute of Technology,
https://arxiv.org/abs/1802.07312.
Merrow, E.W. (2011), Industrial Megaprojects: Concepts, Strategies, and Practices for Success,Edward W. Merrow, John Wiley & Sons, Hoboken, New Jersey.
NEA (2017), Addressing Uncertainties in Cost Estimates for Decommissioning Nuclear Facilities,
OECD, Paris, www.oecd-nea.org/rwm/pubs/2017/7344-uncertainties-decom-cost.pdf.
NEA (2016a), Costs of Decommissioning Nuclear Power Plants, OECD, Paris, www.oecdnea.org/ndd/pubs/2016/7201-costs-decom-npp.pdf.
NEA (2016b), “Policy Debate on the Financing of Decommissioning”, April 2016,
NEA/SUM/DEC(2016)1.
NEA (2015), The Practice of Cost Estimation for Decommissioning of Nuclear Installations, OECD,
Paris, www.oecd-nea.org/rwm/pubs/2015/7237-practice-cost-estimation.pdf.
NEA (2014), Guide for International Peer Reviews of Decommissioning Cost Studies for Nuclear
Facilities, OECD, Paris, www.oecd-nea.org/rwm/pubs/2014/7190-guide-peer-reviews.pdf.
NEA (2012), International Structure for Decommissioning Costing (ISDC) of Nuclear Installations,OECD, Paris, www.oecd-nea.org/rwm/reports/2012/ISDC-nuclear-installations.pdf.
RICS (2018), Sharing construction cost data – benefits, challenges and opportunities, RoyalInstitution of Chartered Surveyors, London, www.rics.org/globalassets/ricswebsite/media/knowledge/research/insights/sharing-construction-cost-data-benefitschallenges-and-opportunities-rics.pdf.
RICS (2017), Global Trends in Data Capture and Management in Real Estate and Construction, RICS,
London, www.rics.org/globalassets/rics-website/media/knowledge/research/insights/
global-trends-in-data-capture-and-management-in-real-estate-and-constructionrics.pdf.
RICS (2013), Cost Analysis and Benchmarking, RICS, London, www.rics.org/globalassets/ricswebsite/media/upholding-professional-standards/sector-standards/construction/blackbook/cost-analysis-and-benchmarking-1st-edition-rics.pdf.

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SWEDEN CASE STUDY: INTERFACE WITH PROJECT DELIVERY TOOLSAppendix A. Sweden case study: Interface
with project delivery tools

Introduction
The different stakeholders described in Chapter 2 all have a need for follow-up on project
performance such as cost and schedule. Thus, benchmarking in the context ofdecommissioning costs also plays an important role of added value in the interface withproject delivery tools. Even if the level of detail in information needed by various
stakeholder groups may differ, as described in Chapter 2, it is considered important thatthe follow-up on project performance is made in a systematic and consistent way. Studying
and implementation of lean management principles and standardisation approaches
provides valuable contribution in this context, e.g. regarding development of relevant key
performance indicators (KPIs).

Background
Within Uniper the nuclear power plants of Oskarshamn 1 and 2, and Barsebäck 1 and 2 areto be dismantled. The two programmes are aligned on portfolio level and supported by
Uniper Project Performance Center (PPC).
The PPC strives for a holistic, site overarching optimisation of the Uniper nuclear
decommissioning and dismantling (D&D) activities. This means:•

prepare and follow up overarching decisions for the D&D project portfolio, in order
to set standards and achieve the overall optimum in quality and cost;•

performance tracking and support;•

support optimisation of D&D resources.

The decision making and formal accountability and authority of the licence holders
OKG and Barsebäck Kraft AB (BKAB) stay intact and the licence holder’s representatives areintegrated in the PPC leadership team and different working groups.
According to the regulatory framework, it is the responsibility of the licence holder toestimate the costs for all measures that are needed to manage and dispose of spent nuclear
fuel, as well as other radioactive residual products from nuclear activities, and todecommission and dismantle the nuclear power plants.
Historically, decommissioning cost estimates are based on technical decommissioning
studies performed by, respectively, TLG Services for Barsebäck and Westinghouse for
Oskarshamn. These cost estimates are the basis for calculating fees and financial
guarantees required in accordance with the regulatory framework and the Swedish
financing system for financing decommissioning and radioactive waste disposal (i.e. thestate Nuclear Waste Fund).

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SWEDEN CASE STUDY: INTERFACE WITH PROJECT DELIVERY TOOLS

Since entering decommissioning, these rather theoretical studies and estimates are to
be verified in the further project planning (e.g. budgetary offers). This is currently work
being undertaken as part of the ongoing strategy development process. Therefore thefollowing should be seen as a preliminary description.

Governance model
To customise project delivery tools for decommissioning, forming a relevant governancemodel is crucial. The basis for the governance model is the three major tasks in nuclear
D&D; operation and maintenance; D&D work packages; and waste management.
The measures for dismantling a nuclear power plant have a direct impact on waste
treatment and on operation, maintenance and security (OMS). Dismantling of radioactive
material is mostly manual work, where the number of required personnel is related to theplanned performance and to the planned execution time. Transport and logistics, the needfor infrastructure systems, and all expenditures are connected to the number of personnel
in controlled areas and material handling. Fast D&D will need high capacity for waste
treatment and thus increase the basic cost for OMS additionally.
Dismantling and decontamination require auxiliary functions like venting, waste water
treatment, lifting devices, elevators for personnel, pressured air, etc. Usually, operational
systems are used until these are to be decommissioned. Before decommissioning of thesesystems compensatory measures are required to fulfil the function until free release ofbuilding.
Nuclear responsibility requires a line organisation on-site, and safety and supervisory
functions. The required resources correspond with the volume of activities on-site, butcannot be reduced below a minimum connected to legal required functions andresponsibilities.
Understanding the overall tasks for nuclear D&D and the interfaces between them
forms a simplified governance model described in Figure A.1 below.

Figure A.1: Simplified description of governance model adapted for nuclear D&D

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SWEDEN CASE STUDY: INTERFACE WITH PROJECT DELIVERY TOOLS

Project delivery tools
At this point the decommissioning studies and their cost estimates form the reference
documents for the monitoring and financial control of project delivery and available funds;
however, as mentioned above the structure for this is under review as part of the strategy
process.
The interface with project delivery tools in context of decommissioning costestimations is considered to consist of planning of the decommissioning projects(i.e. refining understanding of the cost consequences of decisions) and execution of
decommissioning projects (i.e. project controls and project delivery management).
The interface with project delivery tools for planning and execution of thedecommissioning projects is structured on the basis of the three major tasks of nuclear
D&D and suitable key performance indicators and the costs specifically related to them:

Operation and maintenance of auxiliary systems, surveillance of plant and plant security
These measures are necessary as long as the plant is a nuclear site and the radioactivity is
not removed, to support D&D work and waste management. OMS expenditures are
influenced by the decommissioning strategy. These base cost are directly connected to theownership of the plant and to “time”.
Use is made of the same principles as followed during the operation of a nuclear power
plant and the project controls are comparable to the normal operation performance
process.
Main key performance indicators (KPI) can be:•availability of critical systems;•

specific cost for operation and maintenance;•

personal indicator (e.g. number of FTE);•

safety indicator.

D&D work packages
The decommissioning of systems and the “Dismantling” of radioactive material is required
to fulfil the legal requirements of an operator. The measures can be somewhat delayed to
the future, stretched or compressed. In general, the measures follow the principles ofprojects, even if they are directly influencing each other and operation mentioned above.
D&D work packages and special projects (e.g. treatment facilities, interim storage andsystem adaptions) follow the control and performance approach of a “major asset project”.
Main KPIs can be:•time (e.g. milestone trend analysis, schedule);

•

cost;

•

performance (e.g. dismantled mass [Kg], decontaminated surface [m²]);•

resources;

•

risk;

•

safety indicator.

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SWEDEN CASE STUDY: INTERFACE WITH PROJECT DELIVERY TOOLS

Waste management
The radioactive material has to be conditioned as radioactive waste or to be approved as
not radioactive and released as not radioactive. Therefore the material has to be segmented,
decontaminated, measured or packed as radioactive waste for interim and final storage.
Waste management requires control and performance principles of a production plant.
The material from dismantling is comparable to “raw material” treated in different
facilities and the qualified waste package and the material for free release are comparable
to “products”.
Waste management is steered “reactive” on the needs of dismantling, comparable to a
“Single item production” reacting on customer’s needs. Waste management is not “allowed”
to become a “bottle neck” (adaption of capacity needed).
Main KPIs can be:•inventory development, inventory control [number of boxes per storage; rawmaterial inventory];•

facility specific performance and specific treatment cost;•production performance [production input; production output; principle: all in= allout] and process failure indicator/error rate;

•

risk;

•

safety indicator.

Ongoing work and other interdependencies
Applying best practice for “major asset project” in nuclear decommissioning includes
applying LEAN principles and implementing standardisation approaches. This includes
adaptions of project delivery tools and forms an important task of the strategy
development process. The strategy development process also includes risk managementwith direct interdependencies to both cost estimates and project delivery tools.
There are also more interdependencies than just between the cost estimates and theplanning and execution of the project that needs to be addressed for the project delivery
tools, for example in the context of financial reporting in relation to the Swedish Nuclear
Waste Fund. Preliminary discussions have been held between the Swedish nuclear
industry and the Swedish Radiation Safety Authority on how information developed in thiscontext can be handled. However, no decisions have been made.

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DETAILS OF BARRIERS AND ENABLERS IDENTIFIED BY INDUSTRY

Appendix B.1. Details of barriers and enablers identified by industry

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BARRIERS AND ENABLERS: APPROACH TO ASCERTAINING INTEREST GROUP PERSPECTIVES

Appendix B.2. Barriers and enablers: Approach to ascertaining
interest group perspectives

This appendix describes an approach to further inquiry of stakeholder opinions on barrier
removal. It sets out a framework within which to conduct further work to determineinterest group definition, identification and approach to engagement.
This sort of assessment is envisaged during Step 2, “Mobilisation”, of the roadmap
described in Chapter 5. Accordingly, this step would include identification of the audienceof interest groups for NPP decommissioning cost benchmarking and gaining theirperspectives on the removal of the barriers to benchmarking. There is also an aim tounderstand stakeholder perspectives on the options for cost benchmarking, including thecollection and sharing of data.

Interest groups – Definition and identification
The potential interest sits in groups planning for and conducting decommissioning. Thesemight also have knowledge from already completed decommissioning projects. They will
include executive decision makers, owners, operators, funders, regulators, and otherentities accountable for cost estimation and delivery of decommissioning.
The interest groups that are most likely to create the critical mass referred to in
Chapter 4, are those with the greatest potential to benefit from cost benchmarking. This
critical mass needs to come together as a starting point or first stage of enabling barrier
removal.
The interest groups will extend to those engaged in planning for new-build facilities,
and those planning or authorising the funding for NPP decommissioning. Each group is
likely to include roles with responsibility for strategic decision making, project costestimation and project delivery management. Interest groups will include commercial
providers of cost estimation and benchmarking services. Other interested parties include
the independent institutions and commercial associations representing the interests of theindustry and its participants. In summary, there is a large audience of potential
stakeholders, each with differing specific interests but together forming a significant
collective interest in developing a workable approach that adds value.
The interest groups seeking value from cost benchmarking, can have different areas offocus, and are therefore likely to have a different perspective on the enablers:•

Executive decision makers, who for example, might use whole-project
benchmarking to challenge cost estimate ranges with regard to the stage of maturityof the subject or target project;•

Project delivery management teams, including cost estimators, who might use
activity-level benchmarking to challenge and/or build cost estimates.

The benchmarking interests of each are not mutually exclusive. While this is aconvenient way of categorising the two fundamental approaches considered by this project,
the interest groups that they sit in, will generally be able to gain value from both
approaches. It is therefore helpful to start identification of the interest groups from themarket perspective.
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BARRIERS AND ENABLERS: APPROACH TO ASCERTAINING INTEREST GROUP PERSPECTIVES

Beneficiaries and consumers of benchmarking
Chapter 4 suggests that removal of some principal barriers to benchmarking is necessary
to remove the many other barriers that are thought to contribute to them. The enablers forremoval of the principal barriers are interdependent, and so must be addressed together.
Implementation of these enablers, for the options that materially add value (Options C to
F presented in Chapter 4), will demand significant co-operation, collaboration, investment
and organisation before the value of the benchmarking it aims to produce can bedemonstrated.
It will therefore be necessary to build a shared understanding of the potential benefitsof benchmarking to those in the industry who will potentially stand to realise the greatest
value from it. It is these parties who are most likely to be prepared to co-operate, and invest
in the start-up and development of benchmarking, and in developing maturity over asignificant period. They will therefore have the greatest influence over the successful
implementation of the option(s) selected to deliver benchmarking.
Others who might be included in a “long-list” (provisional list) are regulatory
authorities and the principal supply chain actors.

Suppliers of data
In addition to the potential beneficiaries and consumers, other interest groups will include
those organisations and stakeholders who have the ownership and knowledge of actual
cost data produced by completed, ongoing and near-term projects (the suppliers of data).
There are many possible stakeholders in this area, who might gain most (asbeneficiaries and consumers) from the value offered by benchmarking, and/or offer mostin terms of data collection and sharing. There remain numerous stakeholders even if focus
is narrowed to completed decommissioning projects, and those currently being
undertaken or planned. To these might be added those organisations who are responsible
for planning and authorising funded decommissioning plans as part of new-build projects.
These parties will include those most likely to support, co-operate and invest in thestart-up and development of benchmarking, and in developing maturity over a significant
period. From this long-list, identification of a more manageable short-list is required to
inform the selected approach and strategy for advancing benchmarking.
Some potential interest groups are likely to be on both the supply and demand side(data providers and benchmarking consumers), and as such, there is a risk they choose toremain independent from any collaboration. These groups might prefer to protect theircommercial position and not engage. While the industry would benefit by collectively
agreeing to invest in and “trigger” the development of benchmarking, there is a risk thatgaining buy-in to collaborate might be difficult for some owners of data.

Benchmarking service suppliers
The providers of cost benchmarking services currently include many cost estimating
consultancies and analysts. These operate across a range of industries, including forexample, mainstream construction and engineering, infrastructure, utilities, energy andresources. Many are global multidisciplinary practitioners with experience of benchmarking
at project level, and also benchmarking at the activity level, which includes thedevelopment of data and databases for cost estimating.
Some of the options presented in Chapter 4 require the use of such service providers.
These are an interest group in terms of acting as potential suppliers of benchmarking
services.

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BARRIERS AND ENABLERS: APPROACH TO ASCERTAINING INTEREST GROUP PERSPECTIVESInterest groups – Engaging these groups in a benchmarking approachThis section examines the engagement of interest groups in taking forward benchmarking,and creating the “critical mass”, or level of audience participation that is needed to move
forward the preferred option to deliver benchmarking.

Engaging the audience for benchmarking
An audience that is sufficient for moving forward selected option(s) for benchmarking,i.e. a “critical mass”, is likely to comprise:•multiple geographies (though not necessarily all);•multiple operators;•

elements of regulatory bodies and authorities;•

elements of the supply chain.

To proceed will require that a sufficient part of industry engages, supports, co-operates
and invests in the enablers removing the headline barriers to benchmarking. It is likelythat this is represented by those with the greatest demand for NPP decommissioning,
represented by those with the greatest number of reactors for which the IAEA PRIS provides
information.
To achieve this, it is likely that each interest group will require a satisfactory businesscase, which justifies the investment to receive the value or benefits. In other words, eachinterest group will need to be able to justify the engagement, and reconcile the investment
needed, in terms of the value (benefit) that it will receive.
Measuring and demonstrating to potential participants the clear value frombenchmarking options requires some commitment and speculative investment from thosesame prospective participants. This is because the value available cannot be demonstrated
by hard examples from within the industry, until such time that benchmarking matures. It
also requires that both the data and the organisation that support it are established. This isa high hurdle and potential barrier to progressing benchmarking.

Figure B2.1: The need for a catalyst to justify industry
buy-in to commit to benchmarking?
Catalyst?

Realise thevalue frombenchmarking

Measure andprove thevalue ofbenchmarking

Justification ofcommitment tobenchmarking

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BARRIERS AND ENABLERS: APPROACH TO ASCERTAINING INTEREST GROUP PERSPECTIVES

While options in the form of enablers have been identified to remove this barrier, theneed for commitment to implement the enablers, requires a bringing together ofparticipants with strongest interest and influence. This is likely to require independentfacilitation by an institution to engender support in the membership. However, the key
enabler remains the willingness of the “critical mass” of potential participants to commit
and invest in the delivery of value. This requires an informed “leap of faith”, which at thisstarting point for benchmarking within this industry, can only really be justified byreference to relatively little industry evidence or evidence from elsewhere. This means
evidence of value attained by other industries, about which the nuclear decommissioning
industry might be sceptical, both in terms of comparability and the value delivered.
This is a significant risk to the advancement of benchmarking, which the project
concludes will require:•the leadership of, and intervention by an institution with global influence over the
potential participants;•

the ultimate buy-in of the potential participants or “critical mass”.

The critical mass for benchmarking
What constitutes the critical mass in any particular case, will be dependent upon theoption(s) that are developed and taken forward. To achieve removal of the barriers for NPP
decommissioning benchmarking, it is likely that the core components illustrated below
will be present.

Figure B2.2: Enabling components to form the critical massnecessary for removal of headline barriers

Organising entity
e.g. industry
institution

Benchmarking
service provider

NPP consumers ofbenchmarking andsuppliers of data

54

Entities
funding NPP
decommissioning

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ENABLING BENCHMARKING OPTIONS ANALYSIS

Appendix B.3. Enabling benchmarking option analysis

The tables contained in this appendix provide some additional details for each of theoptions A-F presented in Table 4.10 in Chapter 4. As noted earlier, all of these options will
also need to be assessed under competition law, as this issue was not considered in detailas part of this preliminary assessment. It should be noted also that, for all these options,the removal of the initial barriers to benchmarking is assumed.

Option A: Enabling benchmarking – “do nothing”
Description

Benefits (added value)• The problem remains
unaddressed – situation
carries on as at present• The industry does notcollaborate in theexternal collection andsharing of data, nor in
the development of abenchmarking
approach• Internal benchmarking
continues and ad hoccommercial or alliancedriven benchmarking
might emerge over time
as knowledge
accumulates• Stakeholders (executive
decisionmakers/authorities andregulators) collect theirown actual cost data andshare it internally only.
The structure andcontextualisation of thedata is internal to theorganisation, but might
be a recognised global
breakdown structure• No/low investment• Sensitivities protected

Relative costs ($, $$, $$$)and disbenefits

Risks

Relative cost: N/A

There is a risk that:

Disbenefits:• Disparate approaches
arise from those at theforefront of
decommissioning anddismantling, leading tosilos of data that cannot
be contextualised for the
benefit of others• Internal benchmarking
builds in additional risk,e.g. fostering poor
practice and inefficiency– if the only internalbenchmarks available
are for projects withpoor outcomes, thenthere is a low bar set for
new projects• The value sought by theindustry is not delivered• Decision making andcost estimating does
not benefit and industry
does not learn from theactual cost information
available• Isolated (not industrywide) benefit; noexternal benchmarking;value and benefits fromexternal practice andperformance are notrealised. Incentive isthat sensitivities areprotected, but nocontribution to removalof industry headline
barriers tobenchmarking

Commentary: Isolated (not industry-wide) benefit, low investment; no external benchmarking; added value and benefits from external
practice and performance are not realised. Incentive is that sensitivities are protected but no contribution to removal of industry
headline barriers to benchmarking.

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ENABLING BENCHMARKING OPTIONS ANALYSIS

Option B: Raw data/isolated data collection and sharing
Description

Benefits (added value)• Stakeholders (executive
decisionmakers/authorities andregulators) collect andshare direct with eachother “raw” cost
information, without
contextualisation, i.e. theknowledge andconfidence elements ofactual cost data arelacking• Sharing is bilateral, or
multilateral within peergroups informally or
under an allianceagreement orMemorandum ofUnderstanding• The value sought by
the industry is notachieved• Isolated benefit, lowinvestment; mightdeliver value withingroup with closelyalignedfacility/project types
and context• Potential forsensitivities to beprotected byagreement providing
some incentive, but
no significant
contribution toremoval of industry
headline barriers tobenchmarking

Relative costs ($, $$, $$$) anddisbenefits
Relative cost: $ (low)Disbenefits:• Decision making and costestimating does not benefit
and industry does not learn
from the actual cost
information available• Isolated (not industry-wide)
benefit; no externalbenchmarking; added value
and benefits from external
practice and performance are
not realised• Incentive is that sensitivities
are protected but nocontribution to removal ofindustry headline barriers tobenchmarking

Risks
There is a risk that:• Disparate approaches
arise from those at
the forefront of
decommissioning anddismantling, leading
to silos of data thatcannot becontextualised for the
benefit of others• The external “raw”
cost information
carries significant risk
without theknowledge andconfidence added tothe cost information

Commentary: Isolated benefit, low investment; the external “raw” cost information carries significant risk without the knowledge andconfidence added to the cost information; might deliver value within group with closely aligned facility/project types and context.
Potential for sensitivities to be protected by agreement providing some incentive, but no significant contribution to removal of industry
headline barriers to benchmarking.

Option C: Contextualised data/peer group collection/sharing arrangement
Description

Benefits (added value)• Stakeholders (executive
decision makers/authorities
and regulators) collect andshare directly with each other
under a common agreed
governance (structure, process
and procedure) the actual costdata, i.e. with knowledge andconfidence elements
contextualised and structured
to a commonly agreed cost
breakdown or reporting
structure• Data input is made directly toa database; sharing is byaccessing the databasebetween or within peergroups or an alliance under anagreement• There is no validation of data
contributed, andnormalisation andbenchmarking are undertakenby the stakeholder
organisations themselves• Moderate benefit;
the external actual
cost data mightdeliver value withingroup with closelyalignedfacility/project types
and context• Potential forsensitivities to beprotected byagreement, but
contribution toremoval of industry
headline barriers tobenchmarking, andusefulness of data
shared is dependent
on extent and scaleof stakeholder buyin, and that theactual cost datacollected adds value
and so is in demandby participants

Relative costs ($, $$,$$$) and disbenefits
Relative cost: $$(medium)
Disbenefits:• Small users might find
it difficult to engage
where they have little
to offer the otherstakeholders,e.g. where they haveno actual and relevant
cost data tocontribute, and only asmall demand forbenchmarking

Risks
There is a risk that:• Only the larger
organisations will invest• Likely participation islimited to group of
stakeholders
recognising theircommon challenge(type, approach andcontext)• The removal of headline
barriers, which are adependency for thisapproach, cannot be
achieved

Commentary: Moderate benefit and investment; the external actual cost data might deliver value within a stakeholder group withclosely aligned facility/project types and context. Potential for sensitivities to be protected by agreement, but contribution to removalof industry headline barriers to benchmarking and, usefulness of data shared is dependent on extent and scale of stakeholder buy-in,
and that the actual cost data collected adds value and so is in demand by participants. Likely that participation is limited to group of
stakeholders recognising their common challenge (type, approach and context).

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ENABLING BENCHMARKING OPTIONS ANALYSIS

Option D: Facilitated member group data collection/sharing
arrangement – no normalisation
Description

Benefits (added value)• Stakeholders (executive
decision makers/authorities
and regulators) collect andshare direct actual cost data
through a forum, which theysponsor and subscribe as
members• The forum and data collection
and sharing is managed by anindependent party under acommon agreed governancestructure, processes andprocedures• The actual cost data, i.e. withknowledge and confidence
elements contextualised by
the suppliers of data, isstructured to the agreed cost
breakdown or reporting
structure• Data input is undertaken by
the facilitator to the agreed
database and the data isanonymised; sharing is byaccessing the facilitator
database• There is no independentvalidation of data contributed,
and normalisation andbenchmarking are undertaken
within the stakeholder or third
party organisations• Moderate benefit; theexternal actual cost
data might deliver
value within groupwith closely aligned
facility/project types
and context• Potential forsensitivities to beprotected byagreement, but
contribution toremoval of industry
headline barriers tobenchmarking, andusefulness of data
shared is dependent
on extent and scale ofstakeholder buy-in,
and that the actual
cost data collectedadds value and so is indemand byparticipants

Relative costs ($, $$,$$$) and disbenefits
Relative cost: $$(medium)
Disbenefits:• Small users mightfind it difficult toengage where they
have little to offer
the otherstakeholders,e.g. where they haveno actual andrelevant cost data tocontribute, and onlya small demand forbenchmarking

Risks
There is a risk that:• Only the larger
organisations will invest• Likely participation islimited to group of
stakeholders
recognising theircommon challenge(type, approach andcontext)• The removal of headline
barriers which are adependency for thisapproach cannot be
achieved

Commentary: Moderate benefit and investment; the external actual cost data might deliver value within group with closely aligned
facility/project types and context. Potential for sensitivities to be protected by agreement, with some contribution to removal of industry
headline barriers to benchmarking, and usefulness of data shared is dependent on extent and scale of stakeholder buy-in, and that theactual cost data collected adds value and so is in demand by participants. Likely that establishment and participation is slow indeveloping until value and success can be demonstrated, limited to a group of stakeholders recognising their common challenge (type,approach and context), and prepared to make investment required to kick-start and make delivery viable for a commercial operator.

COST BENCHMARKING FOR NUCLEAR POWER PLANT DECOMMISSIONING, NEA No. 7460, © OECD 201957

ENABLING BENCHMARKING OPTIONS ANALYSIS

Option E: Facilitated industry collection and sharing arrangement– data published with no normalisation
Description

Benefits (added value)• Stakeholders (executive
decision makers/authorities
and regulators) sponsor andsubscribe under an
independent industry
institution (e.g. not for
profit), the development of
an industry database• The forum and datacollection and sharing, isconducted and managed byan independent party to theinstitution that is thefacilities delivery to acommon agreed governance(structure, process andprocedure)• The actual cost data, i.e. withknowledge and confidence
elements contextualised by
the suppliers of data,
validated by theinstitution/facilitator, andstructured to the agreed cost
breakdown or reporting
structure by the facilitator• Data input is undertaken by
the facilitator to the agreed
database which is anappropriately accredited
model suitably assured andthe data is anonymised.
Sharing is by publication by
the custodian institution• Normalisation andbenchmarking is by the
stakeholder• Potential significant benefit
requiring significant
investment; the external
actual cost data might deliver
value within the industry withclosely aligned facility/projecttypes and context• Potential for sensitivities to beprotected by agreement, with
contribution to removal ofindustry headline barriers tobenchmarking dependent on
demonstrable added value;
usefulness of data shared isdependent on extent andscale of stakeholder buy-in,
and that the actual cost datacollected adds value and sofits to the demand by
participants• Likely that there is little
incentive to contribute data
and that the investment
required to contextualise it
discourages participation• Establishment andparticipation are likely to be
slow to develop until value
and success can bedemonstrated; limited to agroup of stakeholders
recognising their common
challenge (type, approach,context), and prepared tomake the significant
investment required to kickstart and make delivery viable
for a commercial operator

Costs ($, $$, $$$) anddisbenefits
Relative cost: $$$(high)
Disbenefits:• Small users mightfind it difficult toengage where they
have little to offer
the otherstakeholders,e.g. where they haveno actual andrelevant cost data tocontribute, and onlya small demand forbenchmarking

Risks
There is a risk that:• Only the larger
organisations will
invest• The removal ofheadline barriers
which are adependency forthis approachcannot beachieved• Likely
participation islimited to groupof stakeholders
recognising theircommonchallenge (type,approach andcontext)

Commentary: Potential significant benefit requiring significant investment; the external actual cost data might deliver value
within the industry with closely aligned facility/project types and context. Potential for sensitivities to be protected byagreement, with contribution to removal of industry headline barriers to benchmarking dependent on demonstrable added
value; usefulness of data shared is dependent on extent and scale of stakeholder buy-in, and that the actual cost data collectedadds value and so fits to the demand by participants. Likely that there is little incentive to contribute data and that theinvestment required to contextualise it discourages participation. Establishment and participation is likely to be slow indeveloping until value and success can be demonstrated; limited to a group of stakeholders recognising their common
challenge (type, approach and context), and prepared to make the significant investment required to kick-start and makedelivery viable for a commercial operator.

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ENABLING BENCHMARKING OPTIONS ANALYSIS

Option F: Rich functionality with facilitated member groupcollection/sharing arrangement and normalisation
Description

Benefits (added value)• Stakeholders (executive
decision makers/authorities
and regulators) collect andshare direct actual cost data
through a forum which theysponsor and subscribe as
members• The forum and data collection
and sharing, is conducted andmanaged by an independent
party to a common agreed
governance structure,processes and procedures• The actual cost data, isvalidated by theinstitution/facilitator, andstructured to the agreed cost
breakdown or reporting
structure by the facilitator• Data input is undertaken by
the facilitator to the agreed
database which is anappropriately accredited
model suitably assured andthe data is anonymised;sharing is by accessing thefacilitator services• The facilitator offers a menu ofbenchmarking services
including, for example,
normalisation, benchmarking,project review (e.g. at approvalstage), project performance
review, industry insight andsupport. The performance ofthe facilitator is monitored andassured by the stakeholders• Potential significant
benefit requiring
significant investment;
the external actual cost
data might deliver value
within group with closelyaligned facility/projecttypes and context• Potential for sensitivities
to be protected by legal
agreement, with
contribution to removal ofindustry headline barriers
to benchmarking
dependent on
demonstrable added
value; usefulness of data
shared is dependent on
extent and scale ofstakeholder buy-in, andthat the actual cost datacollected adds value andso fits to the demand by
participants• Likely that establishment
and participation is slow
in developing until value
and success can bedemonstrated; limited toa group of stakeholders
recognising theircommon challenge (type,approach, context), andprepared to make thesignificant investment
required to kick-start andmake delivery viable for acommercial operator

Costs ($, $$, $$$ etc.)
and disbenefits
Relative cost: $$$(high)
Disbenefits:• Small users mightfind it difficult toengage where they
have little to offer
the otherstakeholders,e.g. where they haveno actual andrelevant cost data tocontribute, and onlya small demand forbenchmarking

Risks
There is a risk that:• Only the larger
organisations will
invest• Likely participation
is limited to groupof stakeholders
recognising theircommon challenge(type, approach andcontext)• The removal ofheadline barriers
which are adependency for thisapproach cannot be
achieved

Commentary: Potential significant benefit requiring significant investment; the external actual cost data might deliver value withingroup with closely aligned facility/project types and context. Potential for sensitivities to be protected by agreement, with contribution
to removal of industry headline barriers to benchmarking dependent on demonstrable added value; usefulness of data shared isdependent on extent and scale of stakeholder buy-in, and that the actual cost data collected adds value and so fits to the demand by
participants. Likely that establishment and participation is slow in developing until value and success can be demonstrated; limited to agroup of stakeholders recognising their common challenge (type, approach and context), and prepared to make the significant
investment required to kick-start and make delivery viable for a commercial operator.

COST BENCHMARKING FOR NUCLEAR POWER PLANT DECOMMISSIONING, NEA No. 7460, © OECD 201959

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Cost Benchmarking for Nuclear Power
Plant Decommissioning

The nuclear sector has in recent years been placing increasing attention on the need to better
understand variations between cost estimates for the decommissioning of nuclear power plants, as wellas the relationship between estimated and actual costs, and the apparent escalation of these costs.
Building on previous work by the Nuclear Energy Agency, Cost Benchmarking for Nuclear Power Plant
Decommissioning examines approaches and methods for the benchmarking of nuclear power plant
decommissioning costs. Particular focus is given to identifying key factors, drivers and constraints toimplementing cost benchmarking. These factors are addressed from a broad range of perspectives inorder to develop a roadmap for implementation that will garner sufficiently broad support from a widebase of interested stakeholders. The report also identifies a number of perceived barriers that may impede
the implementation of benchmarking for decommissioning. Co-ordinated efforts and further analysis will
be needed to help remove these barriers.

Nuclear Energy Agency (NEA)
46, quai Alphonse Le Gallo
92100 Boulogne-Billancourt, France
Tel.: +33 (0)1 45 24 10 15
nea@oecd-nea.org www.oecd-nea.org

NEA No. 7460