EUROPEAN
COMMISSION

Brussels, 14.6.2017
COM(2017) 319 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEANPARLIAMENT AND THE COUNCIL
EU CONTRIBUTION TO A REFORMED ITER PROJECT{SWD(2017) 232 final}ENEN

EU CONTRIBUTION TO A REFORMED ITER PROJECTI.

INTRODUCTION

Fusion is expected to play an important role in Europe's future energy landscape as a virtuallyinexhaustible climate friendly energy source. The fusion reaction does not produce
greenhouse gases or long-lasting radioactivity and the fuel is widely available and practicallyunlimited. By the end of this century, as fossil fuels will be phasing out of the energy mix,
fusion could become a suitable complement to energy from renewables. This is particularly
important following the 2015 Paris Agreement and the EU commitment to lead the way indecarbonising the economy and tackling global climate change in a cost-effective manner.
Thanks to advances in fusion research ITER, which means 'the way' in Latin, aims to bringsignificantly closer the prospect of meeting a large share of our electricity needs throughfusion. Launched in 2005 and now involving seven global partners (Euratom1, United States,
Russia, Japan, China, South Korea and India) ITER is a pioneering project to build andoperate an experimental facility to demonstrate the scientific viability of fusion as a futuresustainable energy source.
Europe has taken the lead in this project with a 45% stake of the construction costs of which
80% is funded from the EU budget and 20% by France as the ITER host country2 (the other
ITER Members share is around 9% each). This cost distribution will change in the operation
phase, with Europe providing 34%. ITER's construction involves over 10 million components
being built in factories around the world. About 75 % of its investment is spent on thecreation of new knowledge and cutting-edge materials and technology. This offers European
high-tech industries and SMEs a valuable opportunity to innovate and to develop 'spin off'
products for exploitation outside fusion (such as the broader energy sector, aviation and hitech instruments like the NMR - nuclear magnetic resonance - scanners).
In July 2010, the Council of the EU mandated the European Commission to approve on behalfof Euratom the current ITER Baseline3 which was based on the assumption that theconstruction of ITER would be completed with so called First Plasma4 in 2020. The Councilof the EU capped the budget for the construction phase at EUR 6.6 billion (2008 values) up to
2020. These resources also cover the administrative costs of the Euratom Joint Undertaking'Fusion for Energy (F4E)'5.The costs for ITER have to be seen in the context of a significant
1

The European Atomic Energy Community.
The ITER Organization is set up by the ITER Agreement of 2006 and hosted in Saint-Paul-lès-Durance (France). Euratom,
as 'Host Party' cannot withdraw from the project: article 26 of the Agreement allows an ITER Member other than Euratom
to withdraw after 10 years from the entry into force of the Agreement (i.e. from October 2017). However, the Member shallcontinue providing its contribution for the construction phase but cannot participate in the experimental phase.
3
A 'Baseline' refers to the inter-related elements of scope (specifications of the machine to build), schedule (timetable forconstruction) and projected costs.
4
First Plasma represents the stage in the construction of the fusion machine that will allow testing the essential componentsof the machine; under the terms of the ITER Agreement, it is the point where the construction phase is formally completed
and the operation phase starts.
5
Fusion for Energy is the European 'Domestic Agency' responsible for delivering the Euratom contribution to ITER. It wasestablished as a Joint Undertaking by the Council Decision 2007/198/Euratom of 27 March 2007 and hosted in Barcelona(Spain). Its Members are the Member States of Euratom, Euratom and Switzerland. It was set up set up to procure22energy transformation in Europe set out in the Energy Union strategy6 that is estimated torequire about EUR 200 billion annually in the next decade.
Since the adoption of the 2010 baseline delays and cost overruns accumulated, mainly due todesign changes and manufacturing challenges owing to the 'first of a kind' nature of the
project but also to weaknesses in its management and governance. These delays madeimpossible the completion of the construction within the expected schedule. In particular,
following the appointment of the new Director General of the ITER Organization in 2015,
intensive effort made by Euratom in collaboration with the other ITER Members to improvethe management of the project and to contain the schedule and cost slippages led to positive
overall progress in the construction and manufacturing activities.
Following a positive review by independent experts the ITER Council endorsed adreferendum7 in June 2016, an updated schedule and associated cost estimates for thecompletion of the ITER construction to First Plasma estimated in December 2025. This is theearliest technically achievable date for the ITER construction8. This schedule does not include
contingencies and therefore assumes that all major risks can be mitigated9. The detailed
schedule from First Plasma in December 2025 to full performance operation, using
deuterium-tritium fuel (the so-called Deuterium-Tritium phase) estimated in 2035, wasendorsed by the ITER Council in November 2016 (associated costs were endorsed adreferendum) as the basis for the new ITER Baseline.
This updated schedule and associated cost estimate enable Euratom to stay within the current
budget cap set by the Council of the EU in 2010, i.e. EUR 6.6 billion to 2020 (in 2008
values), thus ensuring that all necessary contracts can continue to drive progress in theconstruction and that additional delays and cost overruns can be minimised. This
Communication specifies the resources needed for the ITER construction after 2020 under the
updated baseline.
With this Communication the Commission seeks the support of the European Parliament anda mandate from the Council of the EU for the Commission to approve the new baseline adreferendum on behalf of Euratom, at an ITER Council meeting at ministerial level that could
take place in 2017. Approval will still be ad referendum since the Euratom contribution10
from the EU budget is without prejudice to the proposals of the Commission, the outcome of

Euratom's components to ITER and implement other activities related to ITER (mainly the activities with Japan under the
Broader Approach Agreement and the Test Blanket Module programme) and DEMO (the project after ITER that will
demonstrate the first commercial production of fusion electricity, being at the end point of the fusion roadmap and buildingon the results from the operation of the ITER).
6
COM(2015) 80 final of 25.2.2015.
7
Approval was ad referendum because still subject to a final decision by the Budgetary Authorities of the ITER Members.
For Europe, this implies that the Euratom contribution from the EU budget is without prejudice to the proposals of theCommission and the outcome of the negotiations on the Multiannual Financial Framework post 2020.
8This refers to a date before which achievement of First Plasma is considered not technically possible.
9
As a date for First Plasma it includes no contingency provision for unscheduled developments and risk-events which
however cannot be reasonably excluded, particularly in projects of comparable complexity.
10
The Euratom contribution is defined as the joint contribution from the EU budget, France as Host State and the Members of
Fusion for Energy. This contribution is paid to the budget of Fusion for Energy. The share of the Euratom contribution to
ITER (through Fusion for Energy's budget) is funded 80% by the EU budget and ~20% by France. The overall budget of
Fusion for Energy also benefits from an additional ~2% paid by its Members.

3the negotiations on the withdrawal of the United Kingdom from Euratom (Brexit) and theMultiannual Financial Framework post 2020.
Brexit does not affect the overall legal commitment of Euratom to ITER, which is governedby the international ITER Agreement. However Brexit will have an impact on the decisions
taken for the next Multiannual Financial Framework, and consequently could have an indirect
impact on the available Euratom financing to ITER11.
It is in this context that Euratom's approval ad referendum of the new baseline will provide
needed stability to the project, the companies and research centres involved in the project,
allowing current contracts to be duly completed and necessary new ones to be launched in the
coming years. It will also allow the continuation of cooperation with ITER Members and theirDomestic Agencies under the terms of the ITER Agreement.
II.

ITER, THE PATH TO A FUTURE LOW CARBON ENERGY SOURCE, BOOSTING EUTECHNOLOGICAL DEVELOPMENT AND GROWTH

Fusion's future as a viable energy source depends on the successful construction and operationof ITER. Already in the present construction phase ITER is having a positive impact on
European industries and SMEs involved in the manufacture of thousands of first-of-a-kind
technological components required for this complex endeavour. An example of this is the
successful fabrication by a European consortium of companies of the superconductors and thewinding packs for the ITER Toroidal Field Coils, which is a major technological advance aswinding packs of this size have never been manufactured before.
II.1

ITER, a positive investment for the EU

The Euratom investment in the construction of ITER is bringing important benefits to
European industry and research community. Between January 2008 (the start of ITER
activities) and December 2016, Fusion for Energy has awarded 839 contracts and grants for avalue of approximately EUR 3.8 billion spread all over Europe. Some 300 companies
including SMEs from about 20 different EU Member States and Switzerland, as well as some
60 research organisations, engaged in cutting-edge R&D, technology, design and manufacture
work for ITER components have benefited from this investment on ITER activities.
Furthermore, the ITER Organization as well as the Domestic Agencies12 and industries ofother ITER Members have also signed contracts with European industry to support the
manufacture of their own components for ITER.
This investment is already visible in the significant progress on the 42-hectare ITER worksite.
Among the planned 39 buildings, the Tokamak Complex is rising rapidly with the completion
11.

The United Kingdom is an active actor in fusion research and following the withdrawal from Euratom, the United
Kingdom as a non-Euratom state may seek to be associated to the Euratom ITER activities through Fusion for Energy,
similarly to Switzerland. Whether this will be acceptable and under which conditions will be a matter for consideration of
the 27 Euratom Member States and negotiation between Euratom and the United Kingdom. Alternatively, the United
Kingdom may seek to participate directly in the ITER project, subject to the unanimous approval of the ITER Members,
including Euratom. This latter scenario would require a change in the ITER Agreement.
12
Each Member has created a Domestic Agency to fulfil its procurement responsibilities to ITER. These agencies employ
their own staff, have their own budget, and contract directly with industry. Fusion for Energy is the EU Domestic Agency.

4

of two basement levels and is now reaching above ground level. Close by, the 60 metre tall
Assembly Hall, the Cleaning Facility and the Site Services Building stand complete. There issubstantial progress with several other buildings on-site such as the cryoplant and the cooling
towers and work has started in the last 18 months on most of the remaining buildings. Six
electrical transformers (provided by the United States and China) are now installed. All thebase pieces of the cryostat have been delivered by India and are being welded. Fusion for
Energy is ready to start the manufacture of four giant poloidal ring-shaped coils (withdiameters of 17 and 25 metres) inside a dedicated 250 metre long building.
As the project evolves new procurements and grants will be awarded in the coming years, notonly by Fusion for Energy for the Euratom in-kind contribution13 but increasingly by the
ITER Organization for the assembly and tooling work needed to complete the construction.
Overall EUR 1.8 billion is expected to be contracted out by the ITER Organization from now
to 2025 particularly in areas like diagnostics, remote handling and heating systems hightechnology solutions, opening up new opportunities for industries and SMEs in European
regions not so far featuring prominently amongst the beneficiaries.
II.2

ITER, anchored in the European fusion roadmap and open to the world

Achieving a future fusion power plant requires sustained scientific, managerial and financial
commitment on a scale that no single country can provide. This is the reason why fusion
activities are closely integrated at European level and also why seven major partners aresupporting ITER construction at international level.
The successful construction and operation of ITER is on the critical path of the European
fusion roadmap, which represents a comprehensive goal-oriented path to fusion electricity andhas been endorsed by all fusion research stakeholders in Europe14. The new baseline contains
a realistic schedule to achieve the goal of ITER and is essential input to the roadmap. In order
to limit the impact of the new ITER schedule on the fusion roadmap, in particular theconstruction of the fusion electricity demonstration facility (DEMO), crucial long-lead time
research such as the development of new materials needed for DEMO must start immediately.
This will need the construction of suitable facilities, such as the planned facility to irradiate
and test materials needed for DEMO (DONES - DEMO-Oriented Neutron Source).
Given the delay in achieving First Plasma the fusion research community has an opportunity
to improve coordination and scientific exploitation of existing tokamaks15 around the world,such as JET (EU), K-STAR (Korea), EAST (China), and DIII-D (United States), in order tobetter prepare for ITER operation. This is particularly the case for the JT-60SA Tokamak(Japan) being constructed on budget by Euratom and Japan as part of the Broader Approachactivities and which will become operational by 202016.
13'In kind contribution' refers to the delivery by the ITER Members (through their Domestic Agencies) of all the components
necessary to build ITER, including the buildings.
14'Fusion electricity, a roadmap to the realisation of fusion energy', 2012.
15
From the Russian 'токама́к', is a device that uses a powerful magnetic field to confine plasma in the shape of a torus.
16
Five Members of Fusion for Energy are currently voluntary contributing to the Broader Approach activities: Spain, France,
Germany, Italy and Belgium.

5

At present Switzerland is the only non-Euratom country associated to the Euratom activities
for ITER through Fusion for Energy. Switzerland is associated to fusion activities since 1978,
allowing Switzerland to benefit from contracts and grants with Fusion for Energy and the
ITER Organization and to be associated to the Euratom fusion research programme.
As the project evolves towards its operation phase new opportunities could be open tocountries not currently involved in ITER, through cooperation agreements (e.g. Australia) or
association to ITER activities through Euratom as in the case of Switzerland. Following thesignature of the Joint Comprehensive Plan of Action in July 2015 the ITER Organization is
exploring the possibility to cooperate with Iran on fusion research.
III.

DELIVERING A CONFIDENT PATH TOWARDS ITER CONSTRUCTION

Soon after the adoption of the 2010 baseline the ITER Members came to realise that, in
addition to the immaturity of the design and the manufacturing challenges, management
deficiencies and a lack of cooperation between the Domestic Agencies and the ITER
Organization were hindering the implementation of the project. Both the 2010 schedule andcost estimate were thus perceived to be unreliable.
The 2013 independent management assessment of the ITER Organization recommended
changes in the project management and the development of a more realistic schedule andresource plan. In March 2015 decisions were adopted by the ITER Council to restructure themanagement and on an Action Plan under the leadership of a new Director-General. This Plan
envisaged a complete re-organisation of the ITER Organization, close cooperation with theDomestic Agencies17, freezing designs to allow the construction of buildings and othercomponents and the establishment of a Reserve Fund. This Fund was created to cover the
additional cost to the Domestic Agencies caused by changes initiated by the ITER
Organization to the design of components. The provisions for its use were adopted by the
ITER Council in 2015 and its implementation is under the direct responsibility of the
Director-General of the ITER Organization. It is funded from the cash contribution of the
ITER Members according to their share in the construction phase (45% for Euratom).
Euratom has ensured that its contribution to the Reserve Fund is within its capped budget for
ITER up to 2020. From 2021 onwards the ITER Organization has estimated a total
contribution to the Reserve Fund which Euratom takes into account in its estimate for the incash contribution (see the Commission Staff Working Document accompanying thisCommunication for details). The Fund introduces an incentive for the ITER Organization tominimize changes as much as possible, and therefore acts as a risk mitigation measure.
The Action Plan is also focussed on cost control and the establishment of a new reliable
schedule and associated cost estimates that should lead to a new baseline. In about one year
and a half the ITER Organization has already completed about 60% of this action plan and ismaking good progress in the remainder.

17

In particular, 'Joint ITER Organization - Domestic Agencies project teams' were set up in key project areas, supervised by ajoint project management body (Executive Project Board), allowing early identification of problems and their resolution.

6

A complementary Action Plan was adopted by the Governing Board of Fusion for Energy in2015 that led to the creation of a Project Management Department to reinforce planning andcontrol processes, the redeployment of staff to high priority areas and the strengthening of
project control and cost containment measures. To date 80% of the actions have been
implemented and good progress is being made in the implementation of the remainder.
III.1

Long term schedule of the project following a staged approach

Following a positive review by the independent ITER Council Review Group18, the ITER
Organization presented to the ITER Council in June 2016 a new schedule and associated costestimates for the completion of the construction of the fusion machine until First Plasma. The
earliest technically achievable First Plasma date is currently estimated to be in December
2025, but this does not include contingencies and therefore depends upon all major risks being
mitigated by the ITER Organization and the Domestic Agencies. The detailed schedule for theperiod from First Plasma in December 2025 to a full performance operation (so called
Deuterium-Tritium phase) estimated in 2035 was presented by the ITER Organization andagreed by the ITER Council in November 2016 as the basis of the revised ITER baseline.
The new schedule follows a so-called staged approach which focuses first on the constructionof the components which are essential to achieving First Plasma in 2025, followed bysuccessive series of installation and testing phases before starting the full performance phase(Deuterium-Tritium operation) in 2035. First Plasma construction activities therefore are to befollowed by limited additional Final Installation activities (also covered by the construction
budget) in the operation phase from January 2026 until the start of Deuterium-Tritium
Operation in 2035. This schedule offers the possibility to better manage the project risks bytackling progressively the technical challenges and ensuring that the ITER Organization andDomestic Agencies focus on what is most important to reach First Plasma. It also provides
flexibility to accommodate the placement of contracts and allows for a longer research
programme between First Plasma (end of 2025) and the Deuterium Tritium phase (2035).
III.2

Resources to sustain the path to ensure the full implementation of ITER

The revision of the project cost for each ITER Member, including Euratom (resources fromthe EU budget and France and Fusion for Energy Members) has essentially two components:(a) the revision of each Member's cash contributions to the ITER Organization for the latter's
share of construction, assembly and operations and (b) the revision of the resources needed
for the procurement of the respective in-kind contributions that each Member is committed todeliver to the project as well as the administrative costs for each Domestic Agency. In
addition to the EUR 6.6 billion (in 2008 values) budgeted for the construction up to 2020
under the previous baseline, the resources needed by Euratom to enable the successful
completion of the facility and the start of the performance operation phase have been
estimated in this section on the basis of: (1) the cash request presented by the ITER
18

ITER Council Working Group on Independent Review of the Updated Long-Term Schedule and Human Resources (or inbrief ITER Council Review Group).

7

Organization to the ITER Council of November 201619 and (2) Fusion for Energy's estimatespresented at its Governing Board of December 201620 (all quoted values are in 2008 unlessexplicitly stated otherwise; while the enclosed tables report the estimates in both 2008 andcurrent values) as well as (3) assumed full compliance with the legal commitments under the
ITER Agreement by which the Euratom contribution is not directly affected by Brexit (seealso page 3). It is also assumed that France as a host country will continue to provide 20% of
the Euratom contribution.
Euratom in-cash contributions under the new schedule
The additional21 amount of in-cash contributions to the ITER Organization by Euratom(through the budget of Fusion for Energy) for the construction phase up to First Plasma is
now foreseen at about EUR 1.1 billion for the period 2021-2025 and ca. EUR 0.6 billion tocover Final Installation activities during the period 2026-2035 (also from the construction
budget).
Euratom in-kind contributions under the new schedule
Furthermore, based on cost estimates established by Fusion for Energy on the basis of thestaged approach, an additional21EUR 2.1 billion will be required during the period 2021-2025
to cover the cost of Euratom's in-kind contributions necessary to achieve First Plasma,including components on the critical path, such as the vacuum vessel and buildings and thecost of the initial stages of design and construction activities for components under Euratom
responsibility required for the subsequent assembly phases.
It is important to underline that under the staged approach construction activities to achieveFirst Plasma in December 2025 will be followed by further development and construction ofcomponents for the ITER machine during the subsequent Final Installation activities. The
additional21 resources required to complete the remaining Euratom in-kind components after
2025 and until 2035 (start date of full performance operation) will be of the order of EUR 0.9
billion, without taking into account the possible revenue from the Reserve Fund of the ITER
Organization.
Combined cost of Euratom contribution to the ITER project
While the object of this Communication is primarily to give detailed information on the
resources estimates for the construction phase of the project until First Plasma in 2025, Tables
1 and 2 below show the total estimated Euratom contribution to the revised baseline of the
project based on the staged approach (billion EUR in 2008 and current value, respectively).

19
20

21

Proposal for the Updated Project Plan and Resource Estimates (PPRE), ITER_D_U29DBA v1.1.
Implications of the ITER updated Schedule and Resources Estimates on Fusion for Energy, F4E(16)-GB36-12.1.

In addition to the costs foreseen for construction under the previous baseline.

8Euratom contribution

Up to the end of thecurrent MFF period

To FP

2008 value
2007-20132014-2020

From FP to DT

2021-2025

2026-2027

2028-2035

22

Total after2020

F4E total cash to IO

0.9

1.1

0.5

1.1

2.7

Construction budget

0.9

1.1

0.3

0.3

1.7

Operations budget

0.0

0.0

0.2

0.8

1.0

F4E in kind contribution

1.9

2.1

0.5

0.4

3.0

F4E administration

0.3

0.3

0.1

0.4

0.8

F4E other activities

0.1

0.4

0.1

0.04

0.5

EC project administr.

0.06

0.04

0.02

0.07

0.13

3.3

3.9

1.2

2.0

7.1

Totals22

3.2

3.2

Table 1. Summary table of Euratom contribution in 2008 value. All numbers are expressed in billion EUR, theFirst Plasma (FP) date is 2025 and the start of the performance operation (DT) is in 2035.
Total cash to IO is split as follows:
Construction budget (45.46% of share) includes the cost of Final Installation activities after First Plasma
Operations budget (34 % of share) includes: running costs of the machine, provision for operational
upgrades and spares, decommissioning and deactivation costs
F4E in-kind include the costs of all contracts to provide Euratom's in-kind contribution and takes into accountan estimated return revenue from the Reserve Fund.
F4E admin provides an upper limit to F4E administrative costs.
Other activities include: TBM, DEMO, DONES, JT60-SA operation, cash to Japan and other minor horizontal
activities.
EC project administr. is the average Commission administration costs of the project. Figures after 2020 are
based on the average budget for the period 2014-2020 (EUR 0.67 million current value).

Combining the total estimated cash and in-kind contribution to the ITER Organization, thetotal additional Euratom contribution (through the Fusion for Energy budget) from 2021 till
the end of 2035 is now estimated at about EUR 5.7 billion (EUR 8.4 billion in current values).
Adding the operational cost of Fusion for Energy's administration (up to EUR 0.8 billion),
Fusion for Energy's other activities such as Test Blanket Module and Broader Approach(EUR 0.5 billion) and the European Commission average administration costs of the project(EUR 0.13 billion), the total Euratom resources for the same period are estimated at EUR 7.1
billion (EUR 10.4 billion in current values). To be noted that the ITER Council of November
2016 requested the ITER Organization to make further cost savings.
The figures given above represent the overall Euratom contribution to ITER construction23. A
complete overview of the estimated distribution of the European resources needed for the22

23

Amounts rounded off to one decimal
If the United Kingdom seeks association to the Euratom ITER activities through Fusion for Energy, as mentioned underpoint II.2, the discussions between Euratom and the United Kingdom would need to cover the level and modalities of thecontribution of the United Kingdom and the terms and conditions upon which funding would be made available to United
Kingdom based undertakings.

9

ITER project is given in table 4 of the Staff Working Document. This table also shows theestimate of the European Commission average administration costs of the project, Fusion for
Energy's administrative costs and the costs of ITER-related activities of Fusion for Energy.
Euratom contribution

Up to the end of thecurrent MFF period

To FP

current value
2007-20132014-2020

From FP to DT

2021-2025

2026-2027

2028-2035

Total

22

after

2020
F4E total cash to IO

1.1

1.5

0.7

1.6

3.8

construction

1.1

1.4

0.4

0.4

2.2

operations

0.0

0.1

0.3

1.2

1.6

F4E in kind contribution

2.5

3.1

0.8

0.7

4.6

F4E administration

0.4

0.3

0.1

0.6

1.0

F4E other activities

0.1

0.5

0.2

0.1

0.8

EC project administr.

0.07

0.05

0.02

0.08

0.15

4.2

5.5

1.8

3.1

10.4

Totals

22

3.5

3.5

Table 2. As Table 1, but in current values.

The estimated needs for Fusion for Energy for the construction phase of the project from 2021
until First Plasma in 2025 will therefore be about EUR 3.9 billion (2008 value).
III.3

Solid basis to succeed in constructing ITER, supported by independent
reviews and continued commitment of the ITER Members

Important recent developments provide a good basis for the ITER project to move forward
towards success, although risks still exists. The final design for components needed for First
Plasma has reached 89% while that for non-First Plasma components stands at 71%,
according to information provided by the ITER Organization. The maturity of the design
gives more reliability to the new schedule and associated resource estimates which have been
prepared in close collaboration between the Domestic Agencies and the ITER Organizationand take into account therefore the technical capacities and financial constraints of the ITER
Members and Domestic Agencies. A new level of cooperation between the ITER
Organization and the Domestic Agencies is supported by newly introduced tools24 designed tobetter cope with design changes that could otherwise lead to delays or extra expenditure.
A positive appreciation of the progress made both by the new ITER management and the
project itself has been confirmed by the ITER Council Review Group that concluded in its
report that the revision of the schedule was beneficial to the project and was conducted in a
professional and robust manner. In addition the 2015 Management Assessment of the ITER
24

In particular the Reserve Fund to address cost of changes initiated by the ITER Organization to the design of a component;
and also the creation of joint ITER Organization-Domestic Agencies project teams in key areas of the project, supervised
by a joint project management body (Executive Project Board), to identify problems and propose effective solutions.

10Organization also acknowledged effective efforts to make the project advance recognising
management improvements, including in the decision making processes, as well as improved
cooperation and integration of activities between the ITER Organization and the Domestic
Agencies. Overall the assessment affirmed that these changes were leading to an accelerationin the progress of the project.
In parallel changes at European level have intensified in early 2016 with the appointment of a
new Director in Fusion for Energy with industrial expertise that has aligned the objectives of
the Joint Undertaking with those of the ITER Organization, giving rigorous attention to risk
management and cost containment measures. Further changes are underway to better deliver
the Euratom contribution to ITER on schedule and on budget and to identify potential risks
and mitigation measures. Changes introduced to the operation and practices of Fusion for
Energy are in line with the recommendations from the European Court of Auditors (ECA) as
well as the Commission's own Internal Audit Service (IAS). To date Fusion for Energy has
dealt with 83% of the recommendations of the ECA and the IAS, which is now Fusion for
Energy’s internal auditor in compliance with a recommendation of the ECA. The
consolidation and improvement of the financial performance of Fusion for Energy has been
confirmed in annual discharge procedures by the European Parliament, based on annual
review of the accounts by the ECA that has consistently confirmed the regularity andconformity of Fusion for Energy's accounts.
In June 2016 the Governing Board of Fusion for Energy launched a high-level assessment
exercise on the planning for the delivery of the components under Euratom responsibility andthe associated resources. The results of this review, presented in December 2016, confirmed
the capacity of Fusion for Energy to deliver the Euratom contribution to the new ITER
schedule on time and coherent with the staged approach. This review also underlined thecapacity of the Joint Undertaking to deliver the components required within the current
available budget until 2020 and the cost projections made thereafter. Nevertheless design andmanufacturing challenges, affecting in particular the critical path, continue to exist and could
have further impact on the revised schedule.
As regards the ITER Members, following the completion of the new schedule and associatedresource estimates, they are currently engaged in securing the necessary resources for the
project. Domestic procedures have been launched in China, Korea, Japan and Russia. The
underlying assumption in the political decision-making process of all ITER Members is that
Europe will maintain its leadership and support for the ITER project.
The United States Department of Energy in May 2016 published a report on ITER for
Congress underlining the positive achievements in the project while advocating to continue
the reforms underway. The report acknowledged December 2025 as the earliest technicallyachievable date for First Plasma ('early finish date'), while noting that further risk of scheduleslippages could still materialise. A subsequent detailed review of the project to First Plasma
carried out by the United States Department of Energy in January 2017 further confirmed thatthe project schedule to First Plasma should have a contingency of 24 months. The UnitedStates nevertheless agreed to continued participation in the project, with a further review in
2019.
11

The reorientation of the project has been crucial in sustaining the support and commitment of
all ITER Members to the project.
IV.

MONITORING AND TACKLING THE INHERENT RISKS OF ITER

ITER as a first of a kind large-scale international project at the technological frontier ofknowledge is exposed to inherent risks as regards long term schedule and cost predictability,
but also in terms of stability of management and governance.
The new schedule and associated cost estimates, together with the changes brought tomanagement and governance, now give more confidence on the successful completion of
ITER construction. Important challenges remain, in particular the completion of the buildings
and vacuum vessel, both Euratom contributions which are on the critical path of the project.
Strong risk management is therefore key for the project and notably for the success of the newbaseline in particular to address remaining risks in terms both of schedule and resources. In
particular, independent reviewers of both the ITER Organization and Fusion for Energy
indicate that the completion of First Plasma by December 2025 is the earliest technicallyachievable date and includes no contingency. To ensure schedule reliability, a reasonable
contingency should be included. In particular, the budget estimate of Fusion for Energy untilFirst Plasma was considered reasonable, with a possible uncertainty of 10% due to overall
project delays.
IV.1

Measures to address risks at overall project level

The new management of the ITER Organization has embraced risk management principles
which are applied to other large engineering projects, in particular to meet the First Plasma
date in 2025. A quantitative approach to risk management is now been taken regarding theprobability of risk occurrence, its impact (in months and Euros) and defining mitigation
actions. All main risk classes as well as potential new risks are addressed. A Project Risk andOpportunity Management Committee is in place and the Project Risk Register is being further
improved and is now accessible to all staff of the ITER Organization and Domestic Agencies.
Further progress is however needed to freeze the interfaces of components as this has acritical role in reducing risks of schedule slippage and cost increase.
An important element of this system is the set of milestones, introduced for the first time by
the ITER Council in November 2015 and further developed in June 2016, against which theprogress of the project and its adherence to the schedule can be better monitored. This willallow deviations in the execution of project to be identified and addressed earlier. The ITER
Council has also decided to carry out regular six-monthly in depth risk reviews focused on
critical areas of the project, starting with risk management in 2017. These reviews are anotherway to identify possible risks and to address them before they have a negative impact.
At the same time further improvements need to be made in the governance of the ITER
Organization for effective oversight of the project. In this respect, in November 2016 the
ITER Council agreed to reduce the number of sub-committees, rationalise their function andeliminate overlaps. In 2017 it will analyse other simplification opportunities to focus
governance on delivery and strategic issues.
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IV.2

Measures to address risks in the European participation

In parallel to a comprehensive strategy to make the ITER project a success Euratom, its
Member States and Switzerland, as members of Fusion for Energy, have to continue with
substantial efforts to improve the performance of the Joint Undertaking.
A culture change is underway in Fusion for Energy. It focuses on accountability for cost, theintroduction of reporting systems to better address potential risks and the introduction ofmilestones against which the execution of the Euratom contribution is better monitored.
Regarding cost risks, in spring 2015 Fusion for Energy initiated a major exercise for therevision of its own cost estimate at completion based on information from individual contracts
and packages of work. Following this exercise a cost risk register has been adopted. The new
management of Fusion for Energy is focused on stemming cost increases and schedule delaysin the two most critical areas of the Euratom contribution (buildings and vacuum vessel) andis reinforcing project control and updating cost estimated for completion of major systems on
a monthly basis. The Commission will require Fusion for Energy to seek further cost
containment measures, including a comprehensive strategy for dealing with cost claims fromcontractors.
Based on the lessons already learned and the results of the 2017 mid-term review of Fusion
for Energy the Commission will continue to reinforce its oversight of the Joint Undertaking,which will be reflected through a new Administrative Agreement to anchor not only thechanges stemming from the new Financial Regulation that entered into force in 2016 but also
effective reporting and monitoring.
V.

ITER: THE WAY FORWARD

Euratom has shown strong leadership to address the challenges of the ITER project and to put
it back on track. The radical measures adopted in particular since 2015 are now yielding
encouraging results. Progress is visible on the ITER site, with the construction of manybuildings advancing well, mainly under European responsibility.
This progress, corroborated by independent experts and recognised by the ITER Members
themselves, confirms that the actions taken were necessary to reorient the project.
Following the 2016 ITER Councils the ITER Organization is set to follow the staged
approach with the aim to minimise the cash contributions needed from the ITER Members. It
has an updated baseline for the project covering the new schedule, estimated cost and the staff
resources for the period up to December 2025 (earliest achievable date for First Plasma) andan indicative schedule and cost baseline for the period from 2026 to Deuterium Tritium
operation in 2035. While both Euratom and Fusion for Energy remain fully committed toadhering to the revised schedule and thus achieving the First Plasma Date of December 2025,
experience from the construction of similar large scale one-of-a-kind facilities shows that
achieving First Plasma should be subject to a contingency. Based on the input of independent
reviews made in 2016, and in line with existing experience with large international projects ofsimilar complexity and maturity, the Commission estimates that a contingency of up to 24
months in terms of schedule and 10-20% in terms budget would be appropriate.
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It is now time for the ITER Members to launch their internal procedures for the approval of
the budgetary requirements. Several ITER Members have already indicated the availability offunding for their contributions but are not be likely to make formal commitments before
Euratom's position is clarified. For Europe the new schedule and its associated costs, backed
up by the improvements in the project, provide the necessary grounds for the Commission torequest the support of the European Parliament and a mandate from the Council of the EU toapprove the new ITER Baseline ad referendum on behalf of Euratom, most likely at a
Ministerial level ITER Council meeting in 2017. The Euratom approval needs to be adreferendum since the final Euratom contribution from the EU budget to the ITER project andthe other costs related to the activities of Fusion for Energy and to the management of the
ITER project will be subject to the Commission's proposals and outcome of negotiations on
Brexit and the next Multiannual Financial Framework post 2020.
This mandate will not only ensure the Euratom support to the new schedule but will in
addition demonstrate the continued commitment of Europe to ITER and reinforce European
leadership in the project. Our international partners in ITER expect that Europe, as ITER host,
continues to be the driving-force in keeping the project on track.

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