U.S. Department of

ENERGYU.S.
Participationin the ITER
Project
May 2016

United States Department of Energy

Report on the Continued U.S. Participationin the ITERDC
Project|
1
Washington,
20585

Department of Energy | May 2016

Report on the U.S. Participation in the ITER Project| Page iDepartment of Energy | May 2016

Message from the Secretary
ITER remains the best candidate today to demonstrate sustained burning plasma, which is anecessary precursor to demonstrating fusion energy power. Having fully assessed the facts
regarding the U.S. contributions to the ITER project, I recommend that the U.S. remain apartner in the ITER project through FY 2018 and focus on efforts related to First Plasma. The
U.S. along with all ITER Members across the world have witnessed and acknowledged thesignificant progress made at ITER by the new leadership, but there is still much that remains to
be done. Prior to the FY 2019 budget submittal (late in calendar year 2017 to early 2018), I
recommend that the U.S. re-evaluate its participation in the ITER project to assess if it remains
in our best interests to continue our participation. My recommendation to support First Plasma
cash and in-kind contributions is predicated on continued and sustained progress on the
project, increased transparency of the ITER project risk management process, as well as a suiteof management reforms proposed in this report that we expect will be agreed upon by the ITER
Council. At this time, our continued participation in the fashion recommended is consistent
with DOE’s science mission and is in the best interest of the nation. The report discusses thecritical issues that factored in this recommendation.
Sincerely,

Ernest J. Moniz

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Department of Energy | May 2016

Executive Summary
This report discusses the critical issues that factored in the recommendation that the U.S.
remain a partner in the ITER project through FY 2018, at which time the U.S. will reassess the
project. ITER remains the best candidate today to demonstrate sustained burning plasma, anecessary precursor to demonstrating fusion energy power, which holds the possibility ofproviding abundant and carbon free energy. The project appears to be technically achievable,
although significant technical and management risks remain. Since the beginning of the ITER
project, there have been management problems, cost overruns, schedule delays and budget
increases. Under the current Director General (DG), 1 Bernard Bigot, the management of the
ITER Organization (IO) and the performance of the project have improved substantially, as
confirmed recently by two independent groups: the 2015 Management Assessment (MA) andthe independent review of the new schedule presented to the ITER Council in November 2015.
The international ITER project Members and the IO continue to make progress on construction,delivery and fabrication. The design for First Plasma (FP) is 79% complete throughmanufacturing design, while the overall design to Deuterium-Tritium (DT) is 61% complete. The
U.S. remains concerned about the ITER Members encountering problems in meeting theschedule needs of the ITER project, in particular due to past delays and anticipated funding
constraints. The U.S. ITER in-kind contributions have been designed, constructed and delivered
consistent with the key milestones. Four of the twelve U.S. hardware systems are currently infinal fabrication.
That said, the improvements and performance, while promising, still require additional time todetermine if they will be sustained and lead to the long-term success of the project. The
improvements must be balanced against several years of inadequate performance prior to DG
Bigot’s tenure, as well as the technical, cost and schedule risks that exist. Until a resource
loaded baseline is accepted by all Members (expected to be approved by the ITER Council in
June 2016 and given final, Ministerial approval in the Spring of 2017), and unless IO
transparency and management continues to improve, uncertainty remains in the ability of the
project to complete construction within a reasonable schedule and cost. Even with an approved
baseline, technical risks remain due to the size, uniqueness and tolerances of individualcomponents as well as assembly of the components. As a result, DOE recommends continuing
the reforms already underway, implementing additional measures as described in this report,
and revisiting this recommendation as part of the FY 2019 budget process (end of 2017 to early2018).
This report updates estimates of the full cost, by fiscal year, of all future Federal funding
requirements for construction, operation, and maintenance associated with remaining a
Member in the ITER project. The estimated out-year budget increases for ITER could be

1

A list of Acronyms is provided in the back of this report.

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Department of Energy | May 2016
accommodated with increases in future budgets for the DOE Office of Science (SC) that provide
for growth at rates greater than inflation, but could not be accommodated within out-year
budgets that have little or no growth without significant tradeoffs in other programs. The
President's FY 2017 Budget provides sufficient budget flexibility, as part of Mission Innovation,to accommodate the funding requirements for proceeding with ITER.
DOE has identified additional measures to improve project management discipline for both the
U.S. in-kind contributions and the international collaboration.
••

For the U.S. in-kind effort going forward, DOE will: 1) manage it as a construction project
under DOE Order 413.3b, “Program and Project Management for the Acquisition of Capital
Assets,” with the Deputy Secretary as Project Management Executive and subject to theEnergy Systems Acquisition Advisory Board (ESAAB); 2) work with OMB and Congress toestablish a separate budget line item for the U.S. ITER Project, separate from the Fusion
Energy Sciences budget line; 3) establish a CD-2 performance baseline in FY 2017; and 4)
integrate funding needs into the long-range plans for SC.
For the management of the IO going forward, we will through our role in the ITER Council,
insist on: 1) efforts to provide transparency into the management of the overall project; 2)
the use of the standing risk committee of the IO to identify and help overcome risks thatthreaten the success of the ITER project; and 3) ensuring that cash contributions are limited
to those levels absolutely required for the project’s success and that process improvements
will prevent future, unmitigated growth.

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Department of Energy | May 2016

Recommendation on U.S. Participation in the ITER Project

Table of Contents
Introduction ........................................................................................................................ 1
Results of Recent Reviews ................................................................................................... 2
2.1
2013 Management Assessment...................................................................................... 3
2.2
Results of the 2015 Management Assessment .............................................................. 4
2.3
Results of the Independent Review of the Schedule Presented in November 2015 ..... 5
3
Factors Influencing the U.S. Recommendation ................................................................... 6
3.1
Importance to U.S. Fusion .............................................................................................. 6
3.2
Project Management ...................................................................................................... 7
3.3
Foreign Policy/International Implications ...................................................................... 8
3.4
Opportunity Costs in the U.S. and Effects on the Office of Science Budget................... 9
4
Costs of U.S. Contributions to ITER Construction .............................................................. 10
4.12025 First Plasma Construction Cost Profile................................................................. 11
4.22028 First Plasma Construction Cost Profile................................................................. 12
4.3
Potential Costs Associated with U.S. Withdrawal ........................................................ 13
5
U.S. Requirements for ITER Project Improvements and Next Steps ................................. 13
5.1
U.S. Requirement for Regular Independent Reviews ................................................... 14
5.2
Increased Transparency into DAs to Assess Risk .......................................................... 14
5.3
Key Performance Indicators/Milestones to Track Performance .................................. 14
5.4
Next Steps for U.S. ITER Project .................................................................................... 15
5.5
Limit on Cash Contributions.......................................................................................... 16
5.6
National Academy of Sciences Study of the U.S. Fusion Program ............................... 16
6
Conclusion .......................................................................................................................... 16
Acronyms ...................................................................................................................................... 18
1
2

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1 Introduction
This report discusses the critical issues that factored in the recommendation that the U.S.
remain a partner in the ITER project through FY 2018 and focus on efforts related to First
Plasma (FP). As part of the FY 2019 budget process, the U.S. will re-evaluate its participation in
the ITER project to assess if it remains in our best interest to continue. In addition, this reportprovides an estimate of the full cost of all Federal funding requirements for construction,
operation, and maintenance associated with this recommendation to remain a partner in the
ITER project.
When completed, ITER will enable study of burning plasma and demonstration of net fusion
power. ITER is a complex project scientifically, technically, organizationally, and politically. The
project is planned around achieving two distinct milestones: FP and Deuterium-Tritium (DT). In
FP operations, ITER will demonstrate the integrated operations of all systems required and thenallow for experiments to be conducted on hydrogen plasmas. In DT operations, ITER will moveinto nuclear operations and experiments on deuterium initially, followed by DT plasmas.
The U.S. became a Member of ITER when the Agreement on the Establishment of the ITER
Fusion Energy Organization for the Joint Implementation of the ITER Project (JIA), a binding
international agreement, entered into force in 2007. The other Members are China, theEuropean Union (EU), India, Japan, the Republic of Korea (ROK) and Russia. As host, the EUcommitted to covering 45.46% of the construction costs, while the other Members eachcommitted to 9.09% of the construction costs. For the U.S. and Members other than the EU,
the costs rise to 13% during operations. As a Member, the U.S. gains full access to all researchdata from ITER. Each Member has a Domestic Agency (DA) that provides components andsystems in-kind (80% of their share) and funds to run the central ITER Organization (IO). The IO
is managed by DG Bernard Bigot; the DG reports to the ITER Council (IC), which comprises
representatives from each Member. The DG is the ITER Project Manager, but the DAs report totheir respective Member countries, not to the DG.
In developing this report’s recommendation, DOE considered the effects on the fusion
program; scientific and technical viability of the facility; diplomatic and national security effects;
and anticipated budgetary resources at DOE. DOE also considered the international
commitment the U.S. made in the JIA. ITER performance was evaluated on 1) the management
performance improvements at the IO; 2) the recent project performance of the IO and theMembers; 3) the results of the 2015 Management Assessment; and 4) the results of the
independent review of the schedule that the IO presented to the IC in November 2015. The
recommendation is predicated on future progress in the ITER project, which includes that a
resource-loaded baseline to FP be approved by the IC in June 2016 and at a Ministerial meetingin the spring 2017, that the baseline includes a realistic contingency level commensurate withthe complexity of ITER, and that IO transparency and management continues to improve.

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Department of Energy | May 2016
The U.S. remains concerned about whether the construction progress seen in the past six
months will continue, and thus we will push to implement improved oversight mechanisms andmonitoring. By the time the FY 2019 budget is developed, there is expected to be an approved
ITER baseline to FP, a completed Ministerial meeting where the Members confirm support for
ITER, the EU budget proposal for the seven years starting in 2020, and sufficient operating
experience under DG Bigot’s leadership to determine whether the recent improvements arebeing sustained.
This report is organized as follows. A summary of the recent reviews, starting with the 2013
Management Assessment (MA) and including the most recent Independent Review of theUpdated Long-Term Schedule (ULTS), is provided in Section 2. A summary of factors influencing
the U.S. recommendation, including the importance of ITER to fusion development, theopportunity costs, and the foreign policy implications is provided in Section 3. Cost estimatesfor staying in the ITER project under different assumptions for completion dates and potential
costs associated with withdrawal from the ITER project are provided in Section 4. Section 5outlines U.S. plans to ensure continued improvement in ITER project performance, including anemphasis on regular reviews of the project and ensuring transparency through the monitoringof key milestones, and also outlines the U.S. path forward toward baselining the U.S. ITER
Project and seeking advice from the National Academies regarding the future direction andemphases of the U.S. fusion energy sciences program.

2 Results of Recent Reviews
ITER is a complex project scientifically, technically, organizationally and politically. The costs
have continued to increase and the schedule has continued to slip over the years. The
estimated costs for the IO scope have increased 5-fold since 2003, while the estimated U.S.
costs have risen from $1.1B to a range between $4 and $6.5B. The schedule to achieve FP has
slipped from November 2020 in the most recently approved baseline to no sooner thanDecember 2025, and that date does not include any schedule contingency as noted below.
December 2025 is an early finish date and based on U.S. experience in large projects, it is likelythat the actual date will be a year or more later. The DT operations milestone is estimated to be
no sooner than 2032, again with no schedule contingency. Slippage in the FP date will impact
the DT date, and risks that materialize in the DT scope will also delay the DT date.
Until recent management improvements, including the appointment of DG Bernard Bigot, the
ITER project had not been well managed, and some of the DAs – the EU’s in particular - had notbeen meeting critical commitments in completing civil and Tokamak building construction. The
poor performance directly led to schedule delays and cost increases for other DAs by extending
the length of the project.
To evaluate the management of the IO, the IC meets semiannually to discuss the budgets,schedule, project performance, and other management issues. In addition, the IC charges an

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Department of Energy | May 2016independent MA every two years. Finally, the IC can charge independent reviews, such as therecently completed IC Review Group (ICRG) for the ULTS. The results of the last two MAs andthe independent review of the ULTS are discussed below.

2.1 2013 Management Assessment
Each MA is given a charge by the IC. The assessment is conducted by an independent teamselected from one of the Members. MA-2013 was conducted by a team from the U.S. (led byWilliam Madia) and charged with a thorough examination of the root causes of the schedule
delays. The assessment made the following eleven recommendations:
•
•
•
•
•
•
•
•
•
•
•

Create a Project Culture
Accelerate the DG Transition
Hold the DG Accountable for Resolving Conflicts
Reduce the Number of Senior Managers in the IO
Strengthen Systems Engineering
Instill a Nuclear Safety Culture
Develop a Realistic ITER Project Schedule
Align IO and DA Interests
Simplify and Reduce the IO Bureaucracy
Use Human Resources Systems Tools as a Strategic Asset
Improve Advisory Assessment ResponsivenessAt the urging of the U.S. through the ITER Council, significant management improvements havebeen made in the two and a half years since MA-2013 was accepted by the IC. Of therecommendations, nine were to be implemented by the IO and two by the IC, including MA2013 Recommendation 2 to “Accelerate the DG Transition,” with an understanding that the
new DG would implement the nine recommendations for the IO.
The new DG, Bernard Bigot, was appointed on March 5, 2015. The DG accepted theappointment based on an understanding that he would
•
•
•
•
•
•
•

Have a year to begin to turn around the project,
Be given full authority to make all technical decisions in the best interest of the project,
Produce an updated schedule that he (and the Members) could commit to implement,
Have freedom to revamp the management structure and align personnel more closely
to project need,
Establish an Executive Project Board to include the DAs and that can take the needed
decisions in due time for effective global project management,
Modify the staff regulations for improved efficiency and cost effectiveness, andEstablish a reserve fund that could be used to fund IO-driven project changes.

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Department of Energy | May 2016
DG Bigot created an “action plan” to resolve the nine MA-2013 recommendations and hasreported on progress in completing the action plan regularly.

2.2 Results of the 2015 Management Assessment
The MA-2015 Preliminary Report was provided early in April 2016, and the official presentation
will be made to the IC in June 2016. MA-2015 was asked to assess the progress made in theimplementation of recommendations from both the prior MA-2013 and from an IO-charged
Overall Management Performance Evaluation (OMPE) Working Group.
The report states that the “ITER Organization (IO) has made and is making a great effort in
improving the effectiveness and efficiency of both the design and construction of the project inthe year 2015, based on the recommendations of the prior MA-2013 and the Overall
Management Performance Evaluation (OMPE) Working Group under the leadership of the new
Director General (DG), Mr. Bernard Bigot.” The MA-2015 Preliminary Report concluded thefollowing:
•
•
•
•
•
•
•
•
•
•

The creation of an engineering project culture has been instituted and is improving.
Re-structuring and re-organizing efforts have taken place and are ongoing.
Specific measures for improving management systems for both project and staff have beentaken and are in the process of being implemented.
Recommendations from the OMPE Working Group have been integrated with MA-2013.
The new DG is effective as the leader of the IO.
The global efficiency of the decision-making process of the project has been improved
although it has only been in place for a short period of time.
The IO and DA cooperation has been emphasized but has not been improved significantly.
Improved performance of the management of both the IO and the project is observable.
Communications between leadership of the IO and DAs has been dramatically improved.
Human resource management is improving but still needs significant transformation.

The MA-2015 Preliminary Report also includes a set of observations based on staff polling in theearlier days of the DG’s tenure. These may be reflective of either staff uncertainty over the new
DG or the actions of the prior DG. A new staff survey is a recommended step to determine theviews of the staff now that the new DG has been in charge for over one year.
The MA-2015 Preliminary Report made the following recommendations:
•
•
•
•
•

Institutionalize collaborations and partnership between IO and DAs and within IO.
Improve management and leadership structure for a more efficient organization.
Highlight core values and enhance organizational culture.
Improve communication and management process.
Optimize human resource management practices.

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Department of Energy | May 2016

2.3 Results of the Independent Review of the Schedule Presented in
November 2015
In November 2015, the DG presented the ULTS, which includes an assessment of the resources
required to staff the IO, manage the project, and complete the IO’s assembly and installation.
Two versions of the ULTS were presented: a “fastest technically-achievable schedule” thatassumes hardware delivery to FP is not constrained by DA budgets, and a schedule that
integrates the IO assembly schedule with budget-constrained schedules of the DAs. The twoschedules showed similar dates for FP; however, they differed on the date for start of DT
operations. None of the schedules include any schedule contingency, and as a result based on
U.S. experience in large projects, the dates for FP and DT are not realistically achievable. The
December 2025 for FP and the 2032 for DT are early finish dates, and slippage in both schedules
is likely due to risks that could materialize. In addition, both schedules also showed a significant
increase in the planned IO costs that had not been incorporated in the Members’ budget plans
and could impact Member performance of in-kind hardware fabrication.
The IC approved a two-year set of milestones derived from the ULTS and requested bimonthly
updates on the milestones, which include both IO and Member milestones. In addition, theCouncil established the ITER Council Review Group (ICRG) to perform an independent review of
the ULTS working under the leadership of a Chair designated by the IC.
The ICRG’s report to the IC, completed in April 2016, states that “…Dr. Bernard Bigot… has
restructured the ITER Organization’s (IO) senior management in a major way, with highly
experienced senior managers leading the ITER Organization Central Team. This has led to a
substantial improvement in project performance, a high degree of motivation, and considerable
progress during the past 12 months.” Regarding the updated schedule, the ICRG found that,“the resource estimate is generally complete, including scope that was previously missing, andprovides a credible estimate of cost and human resources.” As of the end of April 2016, DG
Bigot stated that the IO overall value weighted estimate for construction project completion for
FP systems is reported to be approximately 40% complete. And he stated that the design for FP
systems is estimated at around 79% complete through detail design.
Regarding the proposed FP date of December 2025, the ICRG recognized that this is the earliest
possible technically achievable date, and that this date did not have any schedule contingency
associated with it. Therefore, the ICRG recommended that the IO determine a “target date” forFP “that includes a reasonable contingency once an initial quantitative risk analysis isperformed.” The current U.S. estimates for schedule contingency are between two and three
years, based on input from two independent project management experts involved with thedevelopment of the ULTS and review of it. As a result, until the IO analysis has been completed,
the U.S. estimates a late finish date for FP of December 2028.

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Department of Energy | May 2016
The ICRG found that the IO request for 4B Euros (additional resources for construction throughDT, already reflected in U.S. funding tables in this report) were credible. The ICRG performed“drill-down” detailed reviews of a sample (seven major elements) of the ULTS resource
estimate into project work areas. The drill-downs confirmed that the resource-loading wasdone in a detailed and systematic manner. In general and based on the drill-down samples, theICRG concluded that the resource estimates were reasonable for this stage of the project. The
ICRG recommended that the IO continue to iterate based on the post-FP input from Members.
The ICRG made 20 recommendations overall and six related to the Human Resource function at
the IO. These include generally restricting assignments to not more than two terms for staff and“making changes within the Human Resources Department and to human resources policies
and procedures to ensure that the organization is more flexible and supportive.”
At the April 27 meeting, the ITER Council requested that all recommendations be acted upon to
produce an updated schedule to FP be presented to the IC in June 2016, with a comprehensive
schedule to DT operations to be provided in November 2016. Developing a reliable DT
schedule requires a reliable FP schedule, which means that schedule contingency to FP must be
included. The IC also requested that an Action Plan be developed for recommendations thatinvolve longer-term improvements.

3 Factors Influencing the U.S. Recommendation
In coming to the recommendation, DOE considered the fusion program strategy; project
management; foreign policy and international relations; and anticipated budget conditions at
DOE. These perspectives are discussed below.

3.1 Importance to U.S. Fusion
The purpose of ITER is to demonstrate that magnetically confined plasmas can achieve the“burning” state and produce more fusion power than the power needed to operate theexperiment. The U.S. joined the ITER negotiations, in part, based on positive statements about
the need for a burning plasma experiment by the National Academies of Science 2, and from thefusion community, as expressed by the Fusion Energy Sciences Advisory Committee (FESAC).
ITER, and the U.S. domestic research program, is harnessing many of the world’s fusion
scientists to this goal. A burning plasma experiment is a necessary step toward building ademonstration fusion plant, which would be the next major step towards the ultimate
realization of fusion as an abundant and environmentally benign, carbon-free energy source
capable of delivering energy at the base load levels. ITER is still regarded as the fastest path forthe study of high gain burning plasmas and to develop supporting technologies, despite the2

http://www.nap.edu/catalog/10816/burning-plasma-bringing-a-star-to-earth . The letter report, delivered in
December 2002 begins on page 156.

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Department of Energy | May 2016
project delays, and it remains the only path being pursued for a facility to study sustained,magnetically confined burning plasmas. A complete ITER project will demonstrate burning
plasma at fusion reactor scale. The National Academies embraced the view that burning plasma
science learned from ITER would be extensible to a wide range of magnetic configurations.
ITER is designed to allow for world-leading research on the burning plasma state and is thecornerstone of DOE’s Fusion Energy Sciences (FES) strategic plan to achieve its mission. Most of
the FES program is structured to support the development of scientific foundations in supportof burning plasma science that ITER is designed to enable. The impact of U.S. research is foundin many basic aspects of the ITER design, its required flexibility, planned measurements andoperating scenarios, and research plans. A U.S. value placed on the ITER project and research
program is that ITER shall be a flexible, well-diagnosed scientific instrument and will allow
scientists to explore the physics of burning plasma at energy densities close to that of acommercial power plant. This is a critical step towards producing and delivering electricity fromfusion to the grid. Based on the current fleet of fusion facilities coupled with known scaling
relationships, with successful integration and assembly, there is high degree of confidence that
the ITER design is credible and will produce net fusion power when operating in the nuclear
phase. The proposed schedule for construction will, in the nearer term, allow for achievementof FP and experiments on hydrogen and deuterium plasmas, which will inform the researchplans for other experiments at operating plasma facilities around the world and eventually in
ITER during the DT phase.

3.2 Project Management
Project management has greatly improved since DG Bigot began in March of 2015, and the
project is now being well run. The indicators include the IO management improvement, theresults from the MA-2015 Preliminary Report, the performance of the ITER project to the newschedule and the ability to achieve the defined milestones, and the results from independent
review of schedule. DG Bigot has hired new, highly qualified individuals into his senior
management team and has reorganized to a structure that is consistent with running a large,
complex project. The MA-2015 Preliminary Report results support the actions to date andprovide recommendations for continued improvement.
The pace of construction has accelerated under the leadership of DG Bigot, and the IO is
meeting all milestones, which compares to less than 50% of milestones met prior to his arrival.
The IO is responsible for much of the design, as well as the assembly and installation ofcomponents at the site. As of the date of this report, the design for FP is 79% complete throughmanufacturing design, while the overall project through DT is 61% complete. Three ITER
Members remain on or ahead of schedule on meeting commitments; they did not deviate fromthe 2010 baseline and are set to deliver their in-kind commitment well within the current 2025
FP baseline estimate dates. U.S. ITER has continued to meet its deliveries and key schedule
milestones. The U.S. is on track to complete its milestones in 2016. The U.S. ITER Project Office(USIPO) is delivering according to plan and according to the two-years of milestones establishedby the IC in November 2015.

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With regards to the schedule, the ICRG has determined that the ULTS is credible and forms asolid basis for approval, once final iterations through DT are completed. IC approval of the ULTS
will allow the DG to 1) present the ULTS to Ministers for approval, 2) operate under a set costand schedule baseline, and 3) permit the IO to begin benchmarking milestones beyond thecurrent two-year window. This will enable further confidence once all parties commit to thefinancial contributions necessary to meet the approved schedule.
An IC meeting was held on April 27, 2016. Members discussed the ICRG results, pledged to
improve transparency, and endorsed actions by DG Bigot to improve project management. The
ULTS will be submitted at the IC in June 2016.
The performance data seen and the results of the MA-2015 Preliminary Report are positive
indicators; however, the duration of improvements is simply not yet long enough to conclude
that the strength seen will continue and the project will continue to be well managed. Strong
management by the DG and ongoing engagement by the U.S. (through, for example, the IC,
advisory committees, and the executive project board) will be needed to ensure that all of theMembers maintain commitments. As a result, the U.S. will aggressively pursue oversightmechanisms to ensure that the positive trends in improvement project performance andmanagement are sustained. The U.S. will evaluate the project performance indicators of theoverall ITER project in November 2017 to determine if the improvements seen to date havecontinued and can be expected to be sustainable throughout the project.
For the ITER project and the IO, key project and management performance indicators to bemonitored will include: continued improvement in the management of the ITER project (e.g.,
results of the MA-2017 report); effective risk analysis and management, transparency of
progress performance by all the DAs and the IO (e.g., monthly Cost Performance Index status);
and continued success in completing major milestones (listed in Section 5) that are indicators ofoverall ITER performance. Risk management is a particular focus because of the lack oftransparency into the individual Member’s risks in the past, and because of theinterdependencies inherent in the ITER project. Finally, independent project reviews every six
months will be pursued through the IC to inform DOE leadership on the overall ITER project
performance. Such reviews are similar to those performed by the Office of Science (SC)throughout the project lifecycle of major SC projects to validate project progress and identify
recommendations for project performance improvement.

3.3 Foreign Policy/International Implications
The Agreement on the Establishment of the ITER Fusion Energy Organization for the Joint
Implementation of the ITER Project (JIA) is a binding international agreement that was enteredinto domestically as a congressional-executive agreement. It is an agreement among most of
the leading world science powers. As seen in other successful multilateral partnerships, there isan increasing dependence on close cooperation among many countries to work together toReport on the Continued U.S. Participation in the ITER Project| 8

Department of Energy | May 2016
build and operate large-scale science projects given their high costs and uncertainties. Because
the JIA’s withdrawal provision provides that withdrawal shall not affect the withdrawing party’s
contribution to construction costs, if the U.S. were to withdraw, the expectation from otherMembers would likely be that the U.S. would still provide for the hardware it is committed todeliver and its cash contribution commitment. The potential costs associated with withdrawal
are provided in Section 4. If the U.S. were to withdraw and not meet its commitment (cash andin-kind), the U.S. would likely be criticized as an unreliable partner, our ability to enter into
similar international partnerships could be undermined, and other ITER Members might takeactions against the U.S. to try to compel us to meet our commitments.
As a Member in ITER, the U.S. has access to all intellectual property and research generated aspart of this multilateral effort. With countries from France to China looking to take advantage ofthe commercial potential of fusion energy, the U.S. must ensure that our scientists andengineers are on an equal footing with their international counterparts and that our innovation
ecosystem can take full advantage of the breakthroughs that may result from ITER.

3.4 Opportunity Costs in the U.S. and Effects on the Office of Science Budget
The budget profile for the U.S. ITER contributions is provided in Section 4, which gives
preliminary estimates of annual funding profiles for FY 2016 through FY 2035. ITER will involvean additional commitment of approximately $3.5B of funding in out-year budgets. The FY 2017
Budget requests $125M for U.S. ITER. The $125M is carried forward in out-year planning
exercises for SC, but meeting the U.S. commitments will require increasing this annual
expenditure by a factor of two or more. Further refinement of the estimates and independent
review would be required before the costs could be approved as a baseline.
The estimated out-year budget increases for ITER could be accommodated with increases infuture budgets for SC that provide for growth at rates greater than inflation, but could not be
accommodated within out-year budgets that have little or no growth. The President's FY 2017
Budget provides sufficient budget flexibility, as part of Mission Innovation, to accommodate thefunding requirements for proceeding with ITER. Absent additional funds, the DOE fundingneeds for ITER will affect funding of other DOE priorities.
The DOE Office of Science is considering several other projects of $1B or more, including
Exascale computing, Long Baseline Neutrino Facility/Deep Underground Neutrino Experiment,
Proton Improvement Plan, the Advanced Photon Source Upgrade, and Spallation Neutron
Source Second Target Station. Absent additional resources being made available, DOE would
need to delay some of the projects listed above or identify additional resources for the ITER
project. At this time, the specific projects and programs have not yet been determined, but DOE
is committed to funding the resources needed for ITER in the budgets through FY 2018.
There are economic benefits from the investment in ITER as well. To date, U.S. ITER hasawarded over 500 contracts in 43 states (59% of the major contracts to be awarded). The value

Report on the Continued U.S. Participation in the ITER Project| 9

Department of Energy | May 2016of contracts awarded exceeds $800 million. Major active contracts include General Atomics(CA) for central solenoid modules, New England Wire Technologies (NH) for toroidal field
conductor cabling, and Major Tool & Machine, Inc. (IN) and Petersen, Inc. (UT) for central
solenoid structures. Major completed contracts include Luvata Waterbury, Inc. (CT) and Oxford
Superconducting Technologies (NJ) for toroidal field conductor strand, AREVA Federal Services(NC) for tokamak cooling water system design and components, and R&D contracts with
universities and national laboratories.

4 Costs of U.S. Contributions to ITER Construction

The following is an estimate of the full cost, by fiscal year, of all future Federal funding
requirements for construction, operation, and maintenance associated with a recommendation
in FY 2017 to remain a partner in the ITER project. Through the JIA, the U.S. commitment during
the construction phase is 9.09% and the U.S. commitment to operations, deactivation, anddecommissioning phases is 13%. After FP, ITER will operate nominally for 20 years. The mostrecent total cost range of $4 – 6.5B was provided in 2013, and the cost estimates in this Section
are still within that range.
At present, the U.S. ITER schedule and cost are preliminary estimates and have not been
independently validated. The expectation is that the ULTS for ITER to FP will be approved inJune 2016, 3 and the U.S. ITER Project to FP will be baselined in FY 2017. The ULTS does not havecontingency, but as mentioned previously in this report, for planning purposes, the U.S.
considers that a schedule contingency of three years for FP is a reasonable estimate for a
project of this complexity.
Two estimates for the construction costs for U.S. contributions to ITER are provided below.
Both are based on the schedule reviewed by the ICRG (see Section 2.3), and both include thecost increases requested by the IO (e.g., establishing the Reserve Fund). The 2025 FP costestimate ensures that the U.S. provides its in-kind contributions and cash commitments
consistent with achieving FP by December 2025, the technically achievable date in the ULTS (orearly finish date). The 2028 FP cost estimate ensures that the U.S. provides its in-kind
contributions and cash commitments so as not to delay FP any later than the late finish date ofDecember 2028 (assuming three years of schedule contingency). In both cases, a DT date of2035, which the IO noted as the resource-constrained date in the ULTS, is supported by the
profiles provided. The ICRG Report noted that the schedule from FP to DT was not as
developed as the schedule to FP. As a result, while the overall cost for the U.S. will remain
within the range mentioned above, it is expected that the profiles for post-FP construction
costs will change after the baseline is approved.

3

It is expected that the complete ITER baseline through DT will be approved at a Ministerial meeting in 2017.

Report on the Continued U.S. Participation in the ITER Project| 10

Department of Energy | May 2016
In addition, the costs potentially associated with a U.S. withdrawal are outlined under theassumption that the U.S. meets its commitments consistent with the JIA.
The total U.S. life-cycle cost consists of Construction and Operations, Deactivation, andDecommissioning. Construction comprises the in-kind hardware contributions of R&D anddesign (as needed), procurement/fabrication/testing, and shipping to ITER; and the cash
contributions to the IO for ITER construction, ITER R&D, IO staff and infrastructure, IO-provided
hardware, on-site assembly/installation/testing of all ITER components, and the IO Reserve
fund (which serves as contingency funding for directed design changes and missing items).
Operations/Deactivation/Decommissioning is a cash contribution only.
It is assumed that U.S. personnel support during hardware assembly/installation at ITER will befunded by the IO. The funding for the U.S. research program at the ITER facility will be fundedthrough the DOE FES Program budget and is not included in this estimate.

4.1 2025 First Plasma Construction Cost Profile
The table below represents an annual construction funding profile for the U.S. costs, both inkind hardware and cash, to support delivery of U.S. hardware in-line with the internationaltarget schedule for FP in 2025. The “Post-First-Plasma” profile supports a DT date of 2035.
First Plasma Construction Cost($M)

HardwareCash**
Total First Plasma

Prior
Years
897
126
1,023

FY16

FY17

FY18*

FY19*

FY20*

FY21

FY22

FY23

FY24

FY25

FY26

115
115

100
25
125

167
108
275

187
77
264

181
82
263

166
85
251

151
88
239

132
98
230

124
105
229

41
54
95

42
42

Total
2,303
848
3,151

Post-First-Plasma Construction Cost($M)
HardwareCash**
Total PostFirst Plasma

Prior
Years

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

FY29

FY30

-

11

12

24

36

45

46

180

210

249

235

217

95

23

26

25

13

233

275

260

230

-

11

12

24

36

45

46

180

FY31

FY32

FY33

FY34

FY35

Total

25

11

3

3

10

2

141

120

11

3

3

10

2

1,501

1,360

*FY18-FY20 cash includes payment of 2016 cash commitments ($32.5M) and 2017 cash commitment ($35M)** Assumes IO’s current cash profile with transition from First Plasma to Post-First-Plasma in 2026

This U.S. ITER funding profile has a maximum single year budget of $275M. The estimated costs
for FP hardware and cash through 2025 total $3.15B; and the estimated costs for Post-FP
hardware and remaining cash total $1.50B. The overall estimated construction costs are

Report on the Continued U.S. Participation in the ITER Project| 11

Department of Energy | May 2016
$4.65B, 4 of which approximately $1B has already been obligated. The cash represents the IO’sconstruction phase contribution needs as of April 19, 2016.
At present, the cost profile above and that presented in the next section are preliminary
estimates, have not been independently validated, and have not undergone the reviews
associated with the rigorous CD-2 process that will approve a baseline.

4.2 2028 First Plasma Construction Cost Profile
The table below represents an annual construction funding profile to support a 2028 FP, three
years after the early finish, best technically achievable date but within the late finish date thatis consistent with a schedule contingency the U.S. would place on such a complex project. The
profile still supports a DT operations date of 2035.
First Plasma Construction Cost($M)

HardwareCash**
Total First
Plasma

Prior
Years
897
126
1,023

FY16

FY17

FY18*

FY19*

FY20*

FY21

FY22

FY23

FY24

FY25

FY26

FY27

115
115

100
25
125

122
108
230

163
77
240

168
82
250

157
85
242

148
88
236

139
98
237

109
105
214

100
54
154

83
83

45

Total
2,346
848
3,194

45

Post-First-Plasma Construction Cost($M)

HardwareCash**
Total
Post- First
Plasma

Prior
Years
-

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

FY29

FY30

FY31

FY32

FY33

FY34

FY35

Total

8

13

13

36

96

144
23
167

178
26
204

205
25
230

212
13
225

175
25
200

189
11
200

107
3
110

45
3
48

10
10

2
2

1,421
141
1,562

8

13

13

36

96

-

*FY18-FY20 cash includes payment of 2016 cash commitments ($32.5M) and 2017 cash commitment ($35M)**Assumes IO’s current cash profile with transition from First Plasma to Post-First-Plasma in 2026

This U.S. ITER funding profile has a peak single year maximum of $250M. The estimated costs
for FP hardware and cash through 2027 total $3.20B; and the estimated costs for Post-FP
hardware and remaining cash total $1.56B. The overall estimated construction costs are

4

In addition to the construction costs, it is estimated that the U.S. would provide $1.2B in FY 2016 dollars forfacility operations, decommissioning and deactivation.

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Department of Energy | May 2016
$4.76B, 5 of which approximately $1B has already been obligated. The cash estimate represents
the IO’s construction estimate as of April 19, 2016.

4.3 Potential Costs Associated with U.S. Withdrawal
The JIA provides that withdrawal shall not affect the withdrawing party’s contribution to
construction costs. The U.S. would likely be expected to deliver or pay for its remaining shareof the ITER construction costs, which could exceed $2B, excluding escalation and contingency.
Excluding escalation is based on complete payment of all remaining U.S. commitments for theconstruction costs in FY 2016. Contingency would most likely be subject to negotiation during
withdrawal.
In addition, as with the termination of any project, there are project shutdown costs, which are
estimated to total $66M and comprise the following:••••

90-day notice period plus severance pay for the termination of U.S. ITER Project Lab (ORNL,PPPL, and SRNL) employees (143 personnel, $18M);
Termination costs for U.S. personnel employed by the IO (35 personnel, $9M);
Contract termination fees for all existing contracts (~$31M); andProject closeout activities ($8M).

The total project cost estimate for U.S. withdrawal, and assuming no assignment of U.S.
contracts to the IO, could therefore potentially exceed $3B, including the ~$1B costed to date.

5 U.S. Requirements for ITER Project
Improvements and Next Steps

DOE has identified additional measures that can improve project management discipline forboth the international collaboration (how we want the IO to function to manage the entire
effort) and the U.S. in-kind program (how we plan to manage our domestic project). This twopronged strategy is described in the subsections below, where Sections 5.1 through 5.3 arefocused on improvements to the international project and Sections 5.4 through 5.6 focus on
improvements DOE will pursue domestically (both for the U.S. ITER Project and for the Fusion
Energy Science program).

5

In addition to the construction costs, it is estimated that the U.S. would provide $1.2B in FY 2016 dollars forfacility operations, decommissioning and deactivation.

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Department of Energy | May 2016

5.1 U.S. Requirement for Regular Independent Reviews
The successful conclusion of the ICRG points to a need for a more regular, independent review
than that contained in the biennial MA report. It is recommended that the U.S. should only
remain a Member in ITER beyond FY 2019 if the ITER project maintains its current momentum
and continues to improve its performance. The U.S. will work to ensure that the IC conductroutine robust ITER project performance/risk management reviews every six months during theconstruction phase of the project. Such reviews would be similar to the ones conducted by SC
on its projects, and can be implemented within the current IC and IO management frameworks.
The scope would be approved by the IC, and the reviews would evaluate five areas critical toproject success:
•
•
•
•
•

Project Management – effectiveness of the overall organization and functions to include
Senior Management, Human Resource, Procurement and Safety.
Risk Management – approach to and utilization of risk management tools, planning andprocedures across the entire project;
Technical progress – major ITER technical systems, including design, complexity fabrication
arrangements, systems engineering and integration, and the overall efficiency of technicaldecision making;
Safety – approach, effectiveness and progress in planning and implementing the safety,
particularly nuclear safety, aspects of the project; andCost and Schedule – cost and schedule progress and monitoring.

5.2 Increased Transparency into DAs to Assess Risk
The U.S. will work to ensure through the IC close monitoring of and further enhancements to
the risk management processes established by the IO. The risk management committeemonitors IO and DA risks in a comprehensive risk register. A report and discussion will be
included at each IC meeting, and a summary of the risk management activities will be provided
by the DG in his interim status reports to the IC. These actions would help to ensure early
notification of issues, particularly those that might impact achieving the milestones discussed in
Section 5.3, and establish confidence that appropriate mitigation plans are being developedand implemented across all levels of the IO and DA’s.

5.3 Key Performance Indicators/Milestones to Track Performance
Assurance of continued progress of the overall ITER project is critical to the U.S. in making an
informed decision for remaining a partner in ITER. A table of critical performance indicator
milestones for the next few years is provided below; neither the U.S., China nor Russia haveitems on or near the critical path in the next few years. The milestones are indicators of real,sustained IO progress towards completing construction and tangible movement towards
equipment installation and assembly. The record of completing these milestones in the next

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Department of Energy | May 2016
two years and evidence of progress on being able to meet the subsequent milestones will be asignificant input to the decision on remaining a partner in ITER.
Milestone Description
Signature of Construction Management AgentContract
First Sub Segment Assembly of Vacuum Vessel
Sector 5 completed
Completion of Ready-For-Equipment 1A (Tokamak
Assembly Hall)
Civil works and finishing performed in B2 level ofTokamak Building allowing TB04 installation to
begin in tokamak building B2 level
First Vacuum Vessel sector 6 segment completedFirst Toroidal Field coil delivery from Japan to ITERsite
IO submittal to ASN for release of regulatory holdpoint, allowing start of machine assembly in pit
First Vacuum Vessel sector delivery to ITER site
First Toroidal Field Coil Delivery to ITER site from EU
Lower segment cryostat installation starts
Delivery of first EU Vacuum Vessel segment

Responsible
Organization
IO-Central Team

Date
(Calendar Year)2016 Q3

IO-European Union

2016 Q4

IO-European Union2017 Q1

IO-European Union2017 Q4

IO-ROK
IO-Japan2017 Q42018 Q3

IO

2018 Q3

IO-ROKIO-European Union
IO-India
European Union2018 Q42019 Q3
2019 Q32020

5.4 Next Steps for U.S. ITER Project
DOE will baseline the U.S. ITER Project (the in-kind contribution to the IO) to FP in FY 2017.
Baselining of the U.S. ITER Project requires a credible international schedule, which was notavailable previously but which will be available this year and approved as a new baseline for the
ITER Project at a Ministerial meeting in 2017. The CD-2 Performance Baseline Approval will bein accordance with DOE Order 413.3B,“Program and Project Management for the Acquisition of
Capital Assets,” requirements with the Deputy Secretary as Project Management Executive. The
current plan is to manage the cash contribution outside of the U.S. ITER Project baseline. As abaselined project, independent project reviews will be conducted of the U.S. ITER project every
six months. In addition, the status of the project will be included in the Energy Systems
Acquisitions Advisory Board (ESAAB) process. This review process has been renewed in the past
year to tighten up on the management of DOE projects.
Future budget planning for continued support for ITER needs to be considered within thecontext of the total budget for SC, and not merely within the FES program. Also, it is important
to increase transparency in future budget planning for the ITER project. For these reasons, DOE

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Department of Energy | May 2016
will work with OMB and Congress to seek to establish a separate budget line item for the U.S.
ITER project, separate from the Fusion Energy Science budget line.

5.5 Limit on Cash Contributions
Budget profiles since 2013 have found that the cost range of U.S. in-kind components has notchanged; however, the U.S. contribution to the ITER construction is still increasing as indicatedby the recent request for additional IO funding. Until the overall ITER project is baselined andapproved by the IC, there is uncertainty over the total IO costs (and thus the cash contribution
needed from each Member), the fluctuation in the monetary exchange rate and the increases
caused by future schedule delays. In addition, the IO and Members need to manage risks
related to our understanding that it appears the EU will not have sufficient resources to meetboth their in-kind commitments and the increased resources requested by the DG. This creates
the potential for cost growth stemming from new delays caused by the EU choice as to whether
they focus their resources on their in-kind contributions or provide the additional cash
contribution needed by the IO. The U.S. will seek to negotiate a limit to the cash provided to
the IO for assembly and construction to minimize our exposure to the liability of future cost
growth. Such a limit could be pursued through the mechanisms available via the JIA andapproved within the ITER Council.

5.6 National Academy of Sciences Study of the U.S. Fusion Program
The DOE will request that the National Academies perform a study of how to best advance thefusion energy sciences in the U.S., given the developments in the field since the last Academy
studies in 2004, the specific international investments in fusion science and technology, and thepriorities for the next ten years developed by the community and FES that were recently
reported to Congress. This study will address the scientific justification and needs forstrengthening the foundations for realizing fusion energy given a potential choice of U.S.
participation or not in the ITER project, and will develop future scenarios in either case.

6 Conclusion

Based on the recent performance of ITER and the improved prospects for a successful science
project, the recommendation is that the U.S. remain a partner in ITER through FY 2018 andfocus on the FP construction in-kind hardware and cash contribution to ITER Organization. ITER
remains the fastest path for the study of burning plasma. A recommendation to remain apartner past FY 2018 cannot be made until the U.S. has seen proof of continued and sustained
project performance over the next two years.
Risks remain in the project. Prior to the FY 2019 budget submittal, we will be in a better
position to assess the project as we will have 1) an updated IO project baseline through DT, 2) abaseline for the U.S. ITER Project through FP, and 3) two and a half years of results under theReport on the Continued U.S. Participation in the ITER Project| 16

Department of Energy | May 2016
new management. We will re-evaluate the progress of the project at that time and make a
recommendation as to whether to continue or withdraw in order to inform the FY 2019 budget.
DOE has to complete an official baseline of the U.S. ITER project to provide a more accurate
Total Project Cost (TPC) and annual funding profile for the U.S. to meet its commitments thanwhat is estimated in this report. Once a project performance baseline and annual funding
profile has been formulated, it will be independently reviewed and validated. The earliest date
for completing the DOE baselining process, including independent validation, to FP would be in
the first half of FY 2017.
Exceptional oversight and rigorous project management of ITER is essential for making the
project successful. The U.S. will keep pressure on the other Members to continue to improvetransparency and hold to the timeliness of their scheduled deliverables in order to reduce thepotential for cost increases from further delays. We will also maintain close oversight over theoperations of the IO through the IC and through ongoing, rigorous assessments.

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Department of Energy | May 2016

Acronyms
DA

Domestic Agency

DG

Director General

DOE

U.S. Department of Energy

DT

Deuterium-Tritium

ESAAB

Energy Systems Acquisition Advisory Board

EU

European Union

FES

Fusion Energy Sciences

FESAC

Fusion Energy Sciences Advisory Committee

FP

First Plasma

IC

ITER Council

ICRG

ITER Council Review GroupIO

ITER Organization

JIA

Agreement on the Establishment of the ITER Fusion Energy Organization for
the Joint Implementation of the ITER Project

MA

Management Assessment

MAC

Management Advisory Committee

OMPE

Overall Management Performance Evaluation

ROK

Republic of Korea

SC

DOE Office of Science

TPC

Total Project Cost

USIPO

U.S. ITER Project Office

ULTS

Updated Long-Term Schedule

Report on the Continued U.S. Participation in the ITER Project| 18