EUROPEAN COMMISSION Brussels, 17.3.2020 COM(2020) 82 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of the work under the nuclear decommissioning assistance programme to Bulgaria, Slovakia and Lithuania in 2019 and previous years































When they joined the EU, Bulgaria, Slovakia and Lithuania undertook to shut down three nuclear plants of an older soviet design before the end of their scheduled lifetime. The EU committed itself to providing financial assistance to complete safely the decommissioning of the reactors. Two Council Regulations govern the EU support for the 2014-2020 period. They set out the objectives against which this annual report reviews progress achieved in 2019. In line with expectations, Bulgaria, Lithuania and Slovakia continued to make effective progress in decommissioning their nuclear power plants in 2019. Indications to date are that greatly improved safety levels will be achieved at the sites as a result of EU funding under the 2014-2020 MFF. The decommissioning has advanced well beyond an irreversible stage of deconstruction and dismantling activities are progressing towards the scheduled completion dates. While some delays are unavoidable in individual projects, they were compensated by reorganising the plan of future activities so that overall programmes end dates are unchanged. The cost of the work carried out since 2014 is within budget. In Bohunice (Slovakia) the decommissioning is scheduled to be completed by 2025. The dismantling of the large components in the reactor building has started in earnest. The decommissioning operator has cut up the two pressurisers in place, removed all 12 steam-generators - each made up of 145 tons of steel - and transported them to the former turbine hall for treatment and packaging. Preparations started for segmenting reactor internals under water in dedicated workshops inside the reactors building. The decommissioning programme in Kozloduy (Bulgaria) has a completion date of end 2030. The similar design of the Kozloduy and Bohunice reactors provides an excellent opportunity to share experiences, methods and tools. This knowledge‑sharing reduces risks and cost. For example, in 2019, the feasibility of decontaminating the primary circuits at Kozloduy was confirmed based on the experience from Bohunice. The transportation of decontamination equipment from the Bohunice site to Kozloduy was then prepared with a view to decontaminating in 2020 the primary circuits, i.e. the elements closest to the nuclear core. In Ignalina (Lithuania) the reactor design includes a large graphite core. Its decommissioning is a first‑of‑a‑kind challenge and is scheduled to last until 2038. The decommissioning process is therefore at an earlier stage: currently the spent‑fuel assemblies are being safely stored in a new dedicated facility. The transfer operation is expected to last until July 2022. Meanwhile, preparations are under way to dismantle the reactor cores. A thorough process of identification and assessment of available options (scheduled for 2022) aims to mitigate the risks involved. The completion of the decommissioning programmes up to their planned end‑state will require additional funding. In 2018, the Commission adopted proposals for the programmes continuation in 2021-2027. They lay down inter alia national contribution levels, thus removing remaining uncertainties regarding the required funding. Key messages 1.Introduction When they joined the EU, Bulgaria, Slovakia and Lithuania undertook to shut down eight nuclear reactors before the end of their scheduled lifetime: ·Bulgaria – Kozloduy nuclear power plant (units 1 to 4); ·Slovakia – Bohunice V1 nuclear power plant (2 units); and ·Lithuania – Ignalina nuclear power plant (2 units). The EU committed itself to providing financial assistance for the safe decommissioning of the reactors. Two Council Regulations govern EU support for the decommissioning programmes in the 2014-2020 multiannual financial framework (MFF). In application of the reporting requirements of Article 6 of the Regulations, this annual progress report reviews the results achieved under the EU’s nuclear decommissioning assistance programmes (NDAP) in 2019 and forms the basis for adopting the 2020 work programmes. The general objective is to move to the decommissioning end‑state while maintaining the highest safety standards. The programmes do not include mitigation measures in the energy sector that were supported under previous MFFs. Implementation of such measures, launched before 2014, is coming to an end and was subject to an evaluation in 2019. In June 2018, the Commission issued a mid-term evaluation report of the NDAP. It concluded that Bulgaria, Lithuania and Slovakia had made effective and efficient progress in decommissioning the concerned nuclear power plants. The programmes are clearly defined in terms of scope, budget and planning, with end‑dates scheduled beyond the current financing period. They do not cover the disposal of spent fuel and radioactive waste in a deep geological repository – Council Directive 2011/70/Euratom requires the Member State to make provision for that themselves, in their national programmes for the management of spent fuel and radioactive waste. In line with the conclusions of the mid-term evaluation, the scope and budget of the decommissioning programmes were updated and more thorough progress indicators were established in revised detailed implementation procedures. For the next MFF (2021-2027), the Commission has adopted two proposals for continued support for decommissioning activities in Bulgaria, Slovakia and Lithuania. In particular, the proposed funding will enable Bulgaria and Slovakia to complete the decommissioning of the concerned reactors, and help Lithuania to proceed safely and steadily with the decommissioning of the Ignalina nuclear power plant, a first-of-a-kind process on an unprecedented scale that involves retrieving a large amount of radioactive graphite. 2.Programme administration 2.1.Method of implementation The Commission has entrusted implementation of the programme budgets to: ·the European Bank for Reconstruction and Development (EBRD) – for all the programmes (since 2001); ·the Central Project Management Agency (CPMA) – for the Ignalina programme (since 2003); and

·the Slovakian Innovation and Energy Agency (SIEA) – for the Bohunice programme (since 2016). The supervision of these implementing bodies relies on prior checks (‘pillar assessment’) that they fulfil the requirements for indirect management. It is complemented by risk‑informed verifications, either as part of the regular monitoring process or assigned to an independent body. 2.2.Annual programming and monitoring Each of the Member States in question has appointed a programme coordinator who is responsible for national programming, coordination and monitoring of the decommissioning programme at national level. The programme coordinators submitted work programmes for 2019, with activities financed from the Union budget and from national or other sources. The Commission (DG ENER) has published on its website the financing decision and the work programmes adopted by the Commission. In each Member State, a monitoring committee is co-chaired by a Commission representative and the programme coordinator. The role of the committee has been strengthened in revised detailed implementation procedures adopted in 2019. The implementing bodies monitor project implementation on a day‑to‑day basis. In addition, the Commission services follow it closely through desk and biannual on-the-spot reviews. To support the monitoring process, the Commission uses performance indicators, including those defined in the earned value management (EVM) system. By tracking progress against the performance measurement baseline, EVM is used to monitor schedule progress and associated costs. The indicators can trigger timely action to mitigate the impact of deviations from the baseline. 2.3.Controls, audits and evaluations Internal Audit Service The Commission’s Internal Audit Service completed its audit on the implementation of the Commission’s (DG ENER) control strategy for the delegated bodies implementing the NDAP in November 2019. It concluded that the strategy is implemented effectively, thus providing overall reasonable assurance on the effective implementation of decommissioning work financed by the programmes. Assessment of SIEA (Bohunice programme) In 2019, a pillar assessment of SIEA, as implementing body for the Bohunice programme, was completed successfully with the support of an independent audit body. The assessment covered SIEA’s internal control system, accounting system, independent external audit, grants and procurement rules and procedures. Ex post evaluation of energy sector projects In 2019, the Commission finalised an ex post evaluation to measure the results and impacts, effectiveness, efficiency and EU added value of the energy-related projects funded by the assistance programmes in 2007-2013. The assessment was generally positive. Its conclusions are set out in more detail in section 4.4. Anti-fraud action In 2005-2009, the award of a contract for the installation of flue‑gas desulphurisation equipment in Elektrenai (LT) was tainted by fraudulent practices. In November 2019, after a long investigation in cooperation with the UK’s Serious Fraud Office and the European Anti-Fraud Office, the EBRD debarred GE Power Sweden AB for 6 years (the longest debarment it has ever imposed). The decision is final and means that GE Power Sweden is ineligible for funding by most international financial institutions until November 2025. 3.Budgetary implementation and co-financing Co-financing supports ownership by the Member States and creates an incentive for cost-effectiveness. All three Member States have established dedicated funds providing part of the financing. Other national resources come mostly from the national budgets. In Lithuania, funds accumulated previously for decommissioning and waste management are depleted and the organisation managing them was wound up in 2019. For the future, the Lithuanian government undertook to provide funding until the end of the programme. This commitment is taken into account in Table 1 . The EU contributions to the funds managed by the EBRD are augmented by 2‑4% with contributions from other international donors and financial interest on pre‑financing. In the tables below, they include these additional amounts.

Member State EU

2001-2020 EC proposals

2021-2027 Total Budget at completion Kozloduy 458 800 63 1 321 1 358 Bohunice 476 671 55 1 202 1 238 Ignalina 478 1568 552 2 596 3 377 Currently, the legal basis for EU financial support does not stipulate a specific level of national contributions. The Commission proposals for Council Regulations for continued support for decommissioning in the 2021‑2027 MFF lay down the Union’s multiannual contribution and introduce minimum national contributions: 50% for Bulgaria and Slovakia, 20% for Lithuania. The Council Regulations are still to be agreed by the Council subject to European Council agreement on the 2021-2027 MFF. National resources EU Total Kozloduy 296 (40%) 440 (60%) 736 Bohunice 208 (39%) 322 (61%) 530 Ignalina 175 (15%) 1006 (85%) 1 181 4.Progress and performance The Commission measures progress and performance against the objectives set out in the Council Regulations establishing the programmes. Detailed targets and schedules in the implementation procedures and the EVM system complement the monitoring. To date, progress against the objectives is generally satisfactory and the cost of the work has been as planned. The programmes’ critical path is monitored with the utmost attention and, when risks are identified, mitigating actions are proposed so that at this point in time the end-dates are still valid. After the mid-term evaluation, the time profile of the activities was revised to re-calibrate the tracking of progress and performance. 4.1.Bulgaria – Kozloduy programme Units 1‑4 at the Kozloduy plant are VVER 440/230 reactors: units 1 and 2 were shut down in 2002 and units 3 and 4 in 2006. Under the administrative supervision of the Ministry of Energy, the State Enterprise for Radioactive Waste (SERAW) is the operator in charge of the decommissioning of Kozloduy units 1-4 and the construction and operation of the national disposal facility for radioactive waste. Its mission is the safe management of radioactive waste on Bulgarian territory. The Kozloduy programme made significant progress on dismantling in the auxiliary buildings, e.g. completing the dismantling of equipment in the turbine hall in August 2019, a year earlier than scheduled ( Figure 1 ). The plasma melting facility, a first-of-its-kind facility for the high‑performance volume reduction of radioactive waste, started operations in November 2018 (target: March 2018) and continued with the support of the system provider until the end of 2019. It is now in industrial operation and the technical and financial evaluation of the first operational campaign will be finalised in 2020. The similar design of the Bohunice and Kozloduy reactors provides an excellent opportunity to share experiences, methods and tools. This knowledge‑sharing reduces risks and cost. For example, in 2019 the feasibility of decontaminating the primary circuits at Kozloduy was confirmed on the basis of experience from Bohunice. The transportation of decontamination equipment used at Bohunice to Kozloduy was then prepared with a view to decontaminating the primary circuits in 2020 (target end date: October 2022). Permits for the construction of the near-surface repository for low-level waste, the national disposal facility, have been repeatedly challenged in recent years. In 2019, the five members of the Supreme Administrative Court took a final decision confirming the Environmental Impact Assessment decision validity. The construction works do not imply any radiation or nuclear safety risk, and proceeded as planned ( Figure 2 ). However on 16th December 2019 a fatal accident occurred on the building site. Building activities are suspended until the causes of the accident are fully analysed and all measures are implemented to restart the works under the best Health and Safety conditions.

In accordance with the updated performance baseline, the programme completion date remains the end of 2030. Figure 3 shows the amount of work carried out (earned value) against the plan (baseline). In 2018, the budget at completion (including contingencies) was revised to €1 358 million. This represents an increase of 23% on the 2014 estimate and Bulgaria has increased its contribution accordingly. 4.2.Slovakia – Bohunice programme The Bohunice V1 plant consists of two VVER 440/230 reactors. Unit 1 was shut down in 2006 and unit 2 in 2008. Under the administrative supervision of the Ministry of Economy, Jadrová a vyraďovacia spoločnosť (JAVYS) is the operator in charge of decommissioning Bohunice V1. Its mission is the safe decommissioning of the nuclear facilities, spent nuclear fuel and radioactive waste management on Slovakian territory. The Bohunice decommissioning programme is the most advanced of the three programmes assisted by the EU and will probably see the first complete decommissioning of a VVER‑type reactor. The programme made substantial progress in 2019. After completion of the dismantling of the turbine hall equipment and the auxiliary buildings, including the demolition of the four cooling towers ( Figure 4 ), the dismantling of the large components in the reactor building started in earnest. By July 2019, all 12 steam generators, each made up of 145 tonnes of steel, had been removed from the reactor building and transported to the former turbine hall ( Figure 5 ), where construction of the dry‑cutting workshop was finalised and the cutting equipment for breaking up the generators was installed. In the second half of 2019 (target: second half 2019), the pressurisers were cut up and the construction started of two wet‑cutting workshops in which the reactor internals will be segmented under water. In 2018, 97.5% of the waste handled at Bohunice was recyclable, 1.7% was non-recyclable and 0.8% was radioactive. In 2019, disposal capacity for low‑level waste, representing over 90% of total radioactive waste by volume, was extended by around 30% at the Mochovce repository. In accordance with the updated performance baseline, the completion date for the programme remains the end of 2025. Figure 6 shows the amount of work carried out (earned value) against the plan (baseline). The budget at completion (including contingencies) was updated in 2018 to €1 238 million, about 1% less than the 2014 estimate. The new estimate is supported by a state-of-the-art plan for risks and contingencies, which provides a high level of confidence. Figure 6: Bohunice – progress and performance

4.3.Lithuania – Ignalina programme The Ignalina plant consists of two RBMK 1500 reactors. Unit 1 was shut down in 2004 and unit 2 in 2009. Under the administrative supervision of the Ministry of Energy, the Ignalina Nuclear Power Plant (INPP) state enterprise is the operator in charge of the facilities under decommissioning and, since 2019, the waste disposal facilities. The removal of spent‑fuel assemblies from the reactor buildings (units 1 and 2) resumed in September 2016. Both reactors are now completely defueled. The remaining contents of the spent‑fuel pools are being transferred to storage casks and finally to the interim spent‑fuel storage facility. By the end of 2019, over 75% (target: 69%) of spent‑fuel assemblies were safely stored in this new dedicated facility. This operation is scheduled to continue until July 2022. Meanwhile, INPP has started preparations for the handling of heavily damaged fuel elements and the cleaning‑up, emptying and decontamination of the spent‑fuel pools. Before (09/2016) After (09/2019) With 50 000 tons (target: 40 658 tons) of material dismantled from the turbine hall, the removal and decontamination of equipment is now coming to an end. The building is being used as temporary storage for material undergoing clearance before regulatory control can be lifted and for low‑level radioactive waste before it can be transferred to a final disposal facility. The dismantling of the Ignalina reactors is a first‑of‑a‑kind challenge: never before has a large power reactor with a graphite core been dismantled. In a first phase (2020 to 2027), INPP will remove all equipment around and on top of the reactor shaft. The subsequent removal of the graphite from the shaft is being prepared with an optioneering study and detailed design of the preferred solution and a facility for the temporary storage of irradiated graphite waste. Construction of the landfill facility for very low-level waste has been completed and the first loading campaign is scheduled for the second half of 2020. The launch of the procurement procedure for the construction of the near‑surface repository for low‑level waste was scheduled for January 2020 but is delayed by designer approval of technical revisions to comply with public procurement requirements. With those two facilities, INPP will have all the tools it needs for the management, storage and disposal of the radioactive waste under the decommissioning plan. In accordance with the updated performance baseline, the programme completion date remains 2038. Figure 9 shows the amount of work carried out (earned value) against the plan (baseline). The budget at completion (including contingencies) is unchanged, at €3 377 million. 4.4.Energy sector projects Until 2013, the assistance programmes allocated funds to energy‑sector projects in line with the respective Member States’ accession treaties and national energy policies. The impact assessment prepared in advance of the current (2014-2020) programmes concluded that those measures would achieve their objectives with the existing funding and should then be discontinued. Therefore, the current programme is limited to implementation of the decommissioning plans, so that it is the focus of the resources and governance structures. In 2019, the Commission finalised an ex post evaluation of the energy‑sector projects financed in 2007-2013. Over €947 million had been committed in support of 58 projects seeking to achieve: ·environmental upgrading (including energy efficiency); ·modernisation of conventional energy production;

·restructuring and modernisation of electricity transmission and distribution; ·enhanced security of supply; and ·enhanced use of renewable energy sources (Bulgaria only). The EU co-financing rate averaged 50.4%, with variations depending on the relationship between the project and the early closure of the nuclear power plants, the type of project and the public or private status of the grant holder. Bulgaria accounted for the highest proportion of the committed budget (€401 million) and the highest number of projects (38). Lithuania and Slovakia had fewer projects, but higher average allocation per project (Lithuania: €364 million for 15 projects; Slovakia: €182 million for 5 projects). Energy projects in Bulgaria targeted the whole value chain, with a stronger emphasis on downstream components (networks and consumption). In Lithuania, the focus was mainly upstream (on production), in particular with the upgrading and modernisation of the country’s largest conventional power plant to replace capacity and partly to comply with the European environmental requirements related to power plant emissions. In Slovakia, the biggest share of resources was devoted to networks, in particular for transmission, in order to improve security of supply. Overall, 40 energy‑sector projects had been completed by the end of 2019, accounting for 75% of the allocated funds. The last 18 projects are due to be finalised in 2020. The study concluded that action under the programme was both instrumental and timely in the three countries, as no other programmes could match the scope and number of projects covered. The programme gave effective support to mitigation measures along the energy value chain, according to national needs. It contributed to the building and modernisation of energy networks, facilitating connections and diversifying the energy mix. On the consumption side, it supported the refurbishment of hundreds of public and private buildings and thousands of households, the modernisation of district heating networks, greater energy efficiency in industry and better street lighting in 35 cities. In the long term, the programme will have helped to: üimprove security of supply following the loss of nuclear capacities; üensure reliable electricity distribution; üfoster integration into the European energy market; üenhance energy diversification; and üimprove energy intensity. It had other, indirect effects, such as enhancing the reliability of power supply, mitigating energy price increases, reducing energy intensity and making local businesses more competitive. It also helped to develop capacities in the three countries, attracting investment, including from private sources. 5.Knowledge‑sharing More and more knowledge‑sharing is taking place. In March 2019, a fourth trilateral knowledge‑sharing seminar was held in Bohunice. It was attended by the decommissioning operators (JAVYS, SERAW and INPP) and representatives of the Joint Research Centre and the International Atomic Energy Agency. As the NDAP progress, knowledge‑sharing and synergies are becoming more concrete, resulting in time and cost savings in decommissioning projects. In 2019, the major areas in which knowledge is being shared are the decontamination of primary circuits and the incineration of radioactive waste, via more conventional equipment or the state-of-the-art plasma melting facility (see section 4.1). In its proposals for new Regulations, the Commission has introduced a requirement that experience and lessons learnt from the programmes be shared across the EU.