COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-11-24
Institutions: European Commission
Subjects: Bulgaria, EU financing, Lithuania, Slovakia, aid programme, decommissioning of power stations, economic support, nuclear power station, nuclear safety

EUROPEAN COMMISSION 

Brussels, 24.11.2011 
SEC(2011) 1388 final 

COMMISSION STAFF WORKING PAPER 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for Council Regulation  

on Union support for the nuclear decommissioning assistance programmes in Bulgaria, 
Lithuania and Slovakia 

{COM(2011) 783 final} 
{SEC(2011) 1387 final} 

 
 
 
 
  
 
1. 

PROBLEM DEFINITION  

In  the  context  of  the  negotiations  for  accession  to  the  European  Union,  the  three  candidate 
countries  Bulgaria,  Lithuania  and  Slovakia  took  the  commitment  to  close  and  subsequently 
decommission  nuclear  reactors  that  could  not  be  upgraded  to  meet  the  minimum  required 
safety  standards  at  an  economically  acceptable  cost  by  a  commonly  agreed  date.  This  early 
closure  represented  an  exceptional  financial  burden  for  the  Member  States  which  was  not 
commensurate with the economic strength of the countries concerned. In recognition of this 
fact  and  as  act  of  solidarity  the  European  Union  committed  itself  to  continue  to  provide 
adequate  additional  financial  assistance  for  decommissioning  of  these  reactors.  The  closure 
commitment  of  the  three  Member  States  as  well  as  the  commitment  of  the  EU  to  provide 
financial EU support was foreseen in the corresponding Accession Treaties. 

Financial  EU  assistance  is  currently  foreseen  until  the  end  of  2013  with  a  total  of  €2 847.8 
million  (€1 367  million  for  Lithuania,  €613  million  for  Slovakia  and  €867.8  million  for 
Bulgaria). This financial EU support has effectively mitigated the economical consequences 
of  the  early  closure  and  the  decommissioning  process  is  well  engaged:  dismantling  of  non-
safety  relevant  systems  and  components  in  the  nuclear  power  plants  has  started  and  the 
construction  of  the  required  waste  management  infrastructure  such  as  spent  fuel  storage 
facilities and waste treatment and storage facilities are in an advanced implementation stage. 
Equally  important  activities  that  have  been  performed  are  the  preparation  of  all  required 
licensing  documents  as  well  as  environmental  impact  assessments,  where  required. 
Nevertheless,  since  decommissioning  of  nuclear  power  plants  is  a  long  term  process  (20-30 
years), the process will continue beyond 2013 and important safety relevant key projects are 
still to be implemented. 

In order to allow for safe decommissioning, adequate financial resources should be available 
when required1. Although all three Member States have established national funds to set aside 
financial  resources  for  decommissioning,  those  resources  are  for  historical  reasons 
insufficient.  Therefore  the  immediate  problem  to  be  addressed  is  the  funding  shortfall  to 
progress  with  safe  decommissioning  of  the  nuclear  power  plants,  to  ensure  that  the  closure 
becomes  irreversible2  and  at  the  same  time  stimulate  the  beneficiary  Member  States  to 
gradually take over the responsibility with respect to the full financial cover and ownership. 
Public  intervention  is  required  to  assist  the  Member  States  with  additional  financial  EU 
support. 

EU citizens and future generations as well as the environment are the main groups affected by 
the  problem  of  funding  shortfall  and  nuclear  safety.  Funding  shortfall  would  jeopardize  the 
safe  maintenance  of  the  shut  down  reactors  until  they  are  completely  defueled  and  the 
seamless  continuation  of  safe  decommissioning,  because  of 
that  further 
decommissioning steps would be postponed to an undefined date, awaiting the availability of 
funds and transferring this liability and responsibility to future generations. It also bears the 
risk  of  reopening  of  the  nuclear  power  plants.  At  most  of  the  reactor  units  no  major 

the  risk 

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2 

Commission  recommendation  on  the  management  of  financial  resources  for  the  decommissioning  of 
nuclear installations, spent fuel and radioactive waste. OJ L 330, 28.11.2006, p.31 
Closure to become irreversible means that decommissioning has progressed so far on a technical level, 
that  it  would  economically  no  longer  be  advantageous  to  consider  the  re-opening  of  the  concerned 
reactor units. 

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irreversible dismantling steps have been implemented. In case of an incident or accident this 
would inevitably also lead to an environmental degradation. 

2. 

SUBSIDIARITY OF THE EU INTERVENTION 

The necessity for the EU intervention is the fact that adequate funds required for continuing 
safe decommissioning cannot be made available in due time through the respective national 
funds. Unlike other Member States in a similar situation but without being confronted to early 
closure  of  their  plants,  it  was  not  possible  for  them  to  accumulate  sufficient  funds  from 
operation of the plants. 

It  is  therefore  in  the  interests  of  the  European  Union  to  ensure  that  the  concerned  reactors 
remain closed and that they are defueled and dismantled in order to reduce the risk of negative 
consequences  for  the  EU  citizen  and  for  the  environment.  The  EU  added  value  lies  in  the 
support  of  measures  targeted  to  reach  an  irreversible  state  within  the  decommissioning 
process  of  the  concerned  nuclear  reactor  units,  in  accordance  with  their  respective 
decommissioning  plans,  while  keeping  the  highest  level  of  safety.  This  will  contribute  to 
provide  substantial  and  durable  support  for  the  health  of  workers  and  the  general  public, 
preventing  environmental  degradation  and  providing  for  real  progress  in  nuclear  safety  and 
security. 

3. 

OBJECTIVES OF EU INITIATIVE 

3.1. 

General policy objectives 

The general policy objective for providing additional EU funding beyond 2013 in support of 
the  three  Member  States  in  their  efforts  to  continue  safe  decommissioning  is  to  progress  in 
defueling and decommissioning of the concerned nuclear reactor units and to ensure that the 
closure is irreversible. 

In order to achieve the above mentioned objectives in the given context, additional support of 
€500  million  has  been  estimated  for  the  period  2014  –  2020  in  support  of  safe 
decommissioning. 

3.2. 

Specific objectives 

The three specific objectives of the additional EU support programme are to 

1.  To  reach  an  irreversible  state  within  the  decommissioning  process.  The  main  expected 

results/outputs for achieving this objective are: 

•  Nuclear  power  plants  are  safely  maintained  in  post  shut-down  mode  until 

complete defueling; 

•  Decommissioning license is in place; 

•  Design for the dismantling of the reactor core/primary circuit is completed: 

•  Dismantling in the reactor building has started. 

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2.  To safely manage the radioactive waste: The main expected results/outputs for achieving 

this objective are: 

•  All  nuclear  reactor  units  are  entirely  defueled  and  nuclear  spent  fuel  is  safely 

stored: 

•  Decommissioning  waste 

is  part  of  a  comprehensive  waste  management 
programme  and  safely  treated  and  stored  according  to  a  detailed  waste 
management plan. 

3.  To maintain the key expertise and knowledge: This is of benefit for safe decommissioning 
but  equally  important  for  addressing  the  social  consequences  of  the  early  closure.  The 
expected  result  for  achieving  this  objective  is  the  redeployment  of  plant  personal  for 
decommissioning activities. 

The Logical Framework Matrix provided at the end of this summary provides an overview on 
the  main  aspects  of  the  EU  initiative  (objectives,  indicators,  sources  of  verification  and 
assumptions). 

Additional  financial  EU  assistance  under  the  above  objectives  provides  the  seamless 
continuation  of  the  support  foreseen  under  the  Accession  Treaty  dedicated  to  safe 
decommissioning.  This  further  support  is  clearly  to  be  understood  as  an  expression  of 
solidarity  towards  the  three  Member  States  concerned.  The  ultimate  responsibility  however 
for  nuclear  safety  remains  with  the  Member  States,  which  also  implies  the  ultimate 
responsibility for its financing, including the financing of decommissioning. 

4. 

POLICY OPTIONS 

Three policy options were identified and assessed: 

Option 1: 

Baseline option: No further financial EU assistance; 

Option 2: 
consequential measures in the energy sector; 

Business  as  usual:  EU  financial  contribution  to  decommissioning  and 

Option 3: 

EU partial financing of decommissioning only; 

Under  Option  1  the  implementation  of  the  provisions  of  the  accession  treaty  would  end  in 
2013.  No  further  financial  EU  assistance  would  be  provided  and  consequently  all  three 
Member  States  would  have  to  guarantee  safe  completion  of  their  decommissioning 
programme with own national resources. 

Option 2 would entail a prolongation of the current funding programmes, similar in level of 
funding (current support: €258 million per year ) and in scope (decommissioning and energy 
measures to further mitigate the economical consequences of the early closure). 

Option  3  is  a  clear  political  message  that  the  three  Member  States  should  show  a  higher 
degree of financial responsibility and ownership and therefore additional funding is proposed 
to  be  reduced  in  amount  (about  €71.4  million  pe r year) and limited in time (no  EU support 
any more beyond 2020). Under this option, no further EU assistance would be made available 
for  measures  in  the  energy  sector  for  mitigating  the  economical  consequences  of  the  early 

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closure. The EU support  would  only be focussed  on key issues in  order to progress on safe 
decommissioning. The EU support would need to be complemented by substantial additional 
national  financial  resources  to  meet  the  remaining  funding  gap  for  the  completion  of 
decommissioning. 

Complementary  to  the  policy  options  four  possible  delivery  mechanisms  can  be  considered 
for  the  implementation  of  options  2  and  3  (option  1  does  not  require  any  delivery 
mechanism). They are: 

Mechanism  A:  Funding  under  joint  management  with  the  EBRD  through  the  existing 
international multi-donor funds (current mechanism for all three Member States): This is the 
current  system.  It  worked  well  in  the  period  before  Accession,  but  has  since  then  started  to 
show its limits. It is to be noted that the other donors have not provided any further support 
since years, making the EU the largest and since 2004 the only remaining donor (more than 
95 % of current funds totals). 

Mechanism B: Funding under joint management with the EBRD however through dedicated 
EC  funds:  This  system  would  benefit  from  the  EBRD's  competence  as  financial  institution 
under joint management, without the drawbacks of the multi-donor fund system. 

Mechanism C: Funding under centralised indirect management through the existing national 
agency  CPMA  (current  additional  mechanism  only  for  Lithuania)  nominated  by  the 
Commission:  With  the  completion  of  the  main  infrastructure  investment  projects,  and  the 
advancement  in  the  decommissioning  process  with  skilled  own  staff  at  the  nuclear  power 
plant,  a  tendency  to  move  towards  complete  execution  of  the  EU  budget  by  CPMA  is  the 
ongoing trend. 

Mechanism  D:  Funding  integrated  into  the  EU  structural  funds  mechanism:  This  delivery 
mechanism  would  be  entirely  new  and  would  put  the  decommissioning  support  programme 
under the General Regulation governing the Structural Funds. 

5. 

ASSESSMENT OF IMPACTS 

5.1. 

Economic impacts: 

•  Electricity prices for consumers:  

Although it can be argued that up to now, the cost of electricity charged did not include all 
back-end  costs  (except  Slovakia),  there  are  high  increases  in  electricity  prices  for  end 
consumers  due  to  the  early  closures.  Options  2  and  3  would  ease  the  effect,  by  offsetting 
partly  the  decommissioning  costs  and  spreading  the  price  rise  due  to  increased  levies  on 
electricity over time. 

•  Electricity trade:  

The early closure has led to diminished generation capacity in the three Member States, and 
hence  diminished  electricity  trade  (Bulgaria),  or  switches  from  being  electricity  exporter  to 
importer  (Lithuania  and  Slovakia).  It  is  to  be  noted  that  Lithuania  and  the  Baltic  States  in 
general are not connected to the European electricity grid, making them vulnerable to major 
electricity imports from one single source, Russia. Only option 2 would make a difference, as 
energy sector measures would then be financed. 

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•  Competitiveness:  

The  Accession  Treaties  already  recognise  the  extraordinary  burden  that  is  placed  on  the 
economies  of  the  three  concerned  Member  States  following  the  early  closure.  The  need  to 
accumulate financial resources needed for the decommissioning process, especially given the 
context  of  early  closure,  might  handicap  the  competitiveness  of  the  three  Member  States 
during an extended period of time. Option 1 would therefore worsen the competitive status of 
the three concerned Member States. Options 2 and 3 restoring the competitive fair grounds as 
far as the amounts needed for decommissioning are concerned. However, given the time lapse 
since  the  closure  and  the  mitigation  measures  already  put  in  place  until  now,  care  must  be 
taken  in  order  not  to  go  too  far,  especially  relating  to  replacement  capacity  or  equivalent 
savings. Such an action (option 2) could create distortion with other Member States who have 
to  replace  outdated  power  generation  themselves,  a  position  also  shared  by  the  European 
Parliament. 

•  Impact on the GDP:  

The  seamless  implementation  of  the  current  decommissioning  plans  (option  2  and  3)  will 
stimulate  growth  by  accelerating  the  pace  of  decommissioning  activities  to  be  performed. 
Delaying decommissioning because of inadequate funding (option 1) would have a negative 
impact on the GDP, as investments would be shifted towards the future. 

•  Public authorities:  

Option 1 will have a major budgetary impact for the beneficiary Member States. They would 
need  to  cover  the  full  remaining  funding  for  decommissioning  from  their  national  budget. 
Option 2 and 3 will limit the impact on the national budgets. Nevertheless, option 3 clearly 
emphasises  the  need  for  the  three  Member  States  to  ensure  a  higher  degree  of  financial 
responsibility and ownership. While providing a reduced support beyond 2013 this allows for 
a  smooth  transition  to  full  Member  State  funding  of  decommissioning  until  the  end  of  the 
process. 

•  Administrative burden:  

For  the  implementation  of  the  policy  options  (2  and  3  only)  the  burden  depends  on  the 
selected delivery mechanism identified in section 4. 

For mechanism A the decision systems are complicated, giving the EU only one vote amongst 
the  donors,  and  are  leading  to  a  dilution  of  responsibilities.  In  case  of  difficulties  in  the 
implementation  of  projects,  this  mechanism  has  shown  its  limitations  regarding  the 
Commission’s possibilities to intervene. 

Under  mechanism  B  the  decision  making  process  would  be  streamlined,  as  well  as  the 
monitoring  flows  improved,  and  administrative  burden  decreased.  It  would  strengthen  the 
Commissions  management  possibilities  to  intervene  more  efficiently  in  case  of  difficulties 
(delays  and  cost  overruns)  in  the  implementation  of  decommissioning  project  by  the 
beneficiaries. 

Implementation of the EU support via a dedicated national agency under delivery mechanism 
C has benefits for the future kind of projects of proximity for instance during tender processes 
and day to day follow up of the decommissioning works by local companies. Although this 

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mechanism is operating in Lithuania, a similar alternative is not investigated for Slovakia and 
Bulgaria, as no suitable structures exist at present to fulfil this role. Given the time needed to 
set up, verify and accreditate such new structures, a significant risk for delays would occur. 

The inclusion of the decommissioning funds into the structural funds (mechanism D) would 
appear  to  be  contrary  to  the  overall  philosophy  of  the  structural  funds,  which  are  geared  to 
growth objectives, notably in line with the priorities of the EUROPE 2020 strategy. Structural 
Funds operate on the basis of shared management. Member States design, select, implement 
and manage projects, in line with the priority axes laid down in operational programmes that 
are  the  subject  of  a  Commission  decision.  The  primary  responsibility  for  monitoring  and 
control of the project lies with Member States. The Commission is involved only on advisory 
basis  and  performs  selective  audits  on  the  basis  of  a  risk  analysis.  Specificities  of  the 
decommissioning support programme are not readily compatible with the shared management 
mode of the Structural Funds. 

•  Impacts on third countries: 

Option  1  would  lead  to  an  immediate  funding  shortfall.  This  could  have  a  potential  major 
impact in and outside the EU as highlighted in the problem definition under section 2. Options 
2  and  3  address  the  funding  shortfall  and  will  have  a  positive  impact  on  citizens  and 
environment in and outside the EU. 

5.2. 

Social impacts: 

•  Employment: 

Currently a significant number of skilled people are employed at the concerned power plants. 
These skilled labour forces are needed for the safe maintenance of the closed down reactors, 
for  the  radiological  characterisation  and  for  some  pre-decommissioning  activities  requiring 
their existing historical knowledge of the plant's operational life time. If no funding would be 
available  (options  1),  this  would  pose  a  serious  threat  to  the  payment  of  their  salaries3.  It 
would also affect whole towns, where the nuclear power plant is generally the main employer. 
Therefore  many  more  people  than  only  the  direct  staff  would  be  affected  in  their  future.  In 
case  of  continued  EU  financing  for  decommissioning  (options  2  and  3),  the  key  staff  with 
their expertise would be maintained as well as the historical memory, with the highest value 
for the decommissioning project.  

•  Security (accidents / terrorism / security of energy supply): 

Without funding (options 1), less strict control and less maintenance are likely, leading to a 
higher risk of misuse. With the acceleration of the decommissioning process (options 2 and 
especially 3), this risk diminishes. 

•  Health: 

Radiological  risks  for  workers  as  well  as  for  the  general  public  are  possible  in  case  of 
accidents  or  lower  safe  maintenance.  Safe  treatment,  storage  and  disposal  of  spent  fuel  and 
radioactive  waste  should  be  according  to  the  highest  safety  standards  but  they  require 
appropriate funding (options 2 and 3). 

3 

To be noted that not for all staff, salaries should be paid under decommissioning. 

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5.3. 

Environmental impacts: 

•  Environment: 

In case of insufficient safe maintenance, ageing monitoring equipment, incidents or accidents 
the  environment  risks  to  be  deteriorated.  It  is  important  to  ensure  transparent  monitoring, 
especially  for  possible  EU  wide  effects.  The  risk  for  accidents,  contamination,  leaks  etc 
increases  with  the  lack  of  funding  for  safe  maintenance  and  decommissioning.  Option  1 
entails a significant risk, which is much lower under options 2 and 3. 

6. 

COMPARISON OF OPTIONS 

No  further  EU  support  under  the  baseline  option  would  stop  the  decommissioning 
programmes and consequently jeopardize nuclear safety. The business as usual option would 
result  in  a  much  higher  financial  EU  support  with  reduced  added  value.  Further  support  to 
projects in the energy sector would lead to a distortion of competition and the continuing high 
level of financial Union support would not be a sufficient incentive for the Member Sates to 
take over the full financial responsibility for the completion of decommissioning. 

EU partial financing for decommissioning only (option 3) is considered the most appropriate 
solution following a clear expressed political will. This option maximises the EU added value 
and  supports  the  transition  towards  full  Member  State  funding  of  the  safe  completion  of 
decommissioning  beyond  the  next  multiannual  financial  framework.  Option  3  provides  for 
real improvement in nuclear safety and will help to achieve timely real physical progress in 
defueling and decommissioning and ensure that the closure is irreversible. 

Option 3 combined with the implementation mechanisms B (for Bulgaria and Slovakia) and C 
(for Lithuania) will provide for a continued strengthening of the Commission’s management 
for the effective, efficient and economical use of EU funds. The identified weaknesses under 
the  current  implementation  mechanism  (A)  would  be  overcome  and  it  would  reinforce  the 
Commissions  management  possibilities  to  intervene  more  efficiently  in  case  of  difficulties 
(delays  and  cost  overruns)  in  the  implementation  of  decommissioning  project  by  the 
beneficiaries.  The  specific  objectives  being  aligned  with  the  proposed  budget  and  based  on 
revised/updated  decommissioning  plans  (needs  expressed  by  the  Member  States)  together 
with the meaningful performance indicators are the basis for achieving the expected benefits 
from the further financial EU support after 2013. This approach is in full accordance with the 
recommendations from the European Court of Auditors. 

7. 

MONITORING AND EVALUATION 

In order to be able to verify the success of the programme (meeting the general and specific 
objectives) SMART Objectively Verifiable Indicators have been identified (see details in the 
matrix below). The monitoring is based on the review of the identified indicators, measuring 
progress towards meeting the objectives. 

At the current stage those indicators are generic to all three individual Programmes (Ignalina, 
Bohunice  and  Kozloduy  Programme).  For  the  implementation  it  is  foreseen  to  adopt  one 
annual  work  programme  for  all  three  individual  Programmes  specifying  the  objectives, 
expected  results,  related  indicators  and  timeline  for  the  use  of  funds  under  each  annual 
financial commitment. 

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On  a  procedural  level  it  is  foreseen  to  adopt  not  later  than  31  December  2014  detailed 
implementation procedures for the duration of the Programme. This decision will contain inter 
alia  detailed  monitoring  and  reporting  requirements  as  well  as  the  revised  detailed 
decommissioning plans for all three individual Programmes that will serve as baseline for the 
monitoring of the progress and the timely achievement of the expected results. 

The EU monitoring, reporting and evaluation arrangements will contain at least: 

–  Twice  per  year  a  monitoring  committee  meeting  with  EU  on  the  spot  to  verify  the 

advancement of the decommissioning works. 

–  Regular  status  and  progress  reporting  from  the  beneficiary  NPP  as  well  as  the 

implementing bodies (EBRD and CPMA). 

–  Yearly combined programming documents, annexed to the Commission Decision on 

financing reporting progress towards decommissioning. 

–  A mid term evaluation of the programme. 

–  Status reports to the European Parliament and Council on the implementation of the 

financial EU assistance. 

Additionally,  a  monitoring  system  should  be  put  in  place  by  the  beneficiaries,  allowing  for 
active  day-to-day  monitoring  of  the  projects  and  tasks,  and  allowing  for  immediate 
operational feedback into the planning with corrective measures. 

LOGICAL FRAMEWORK MATRIX 

Intervention logic 

Indicators 

Overall 

Objective 

Support the Member 
States efforts in safe 
decommissioning. 

Progress according 
decommissioning plan 
(tasks, costs, resources, 
timing); 

Specific 
Programme 
Objectives 

Purpose 

To reach an 
irreversible state 
within the 
decommissioning 
process; 

To safely manage 
spent nuclear fuel 
and the radioactive 
waste; 

To maintain the key 
expertise and 
knowledge; 

Dismantling according 
decommissioning plan; 

Waste management 
according detailed waste 
management plan; 

Use of staff from the nuclear 
power plants; 

Assumptions 

Stable political and 
regulatory 
framework; 

National funding 
forthcoming to meet 
the funding gap; 

Source of 
Verification 

Decommissioning 
plan; 

Regular 
monitoring 
meetings; 

Reporting by NPP 
and national 
authorities; 

Decommissioning 
and waste 
management plan; 

Stable political and 
regulatory 
framework; 

Regular reporting 
and monitoring 
meetings; 

changes 

No 
decommissioning 
strategy; 

in 

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Outputs 

NPPs safely 
maintained; 

(expected 
results) 

No environmental 
impact; 

Activities 

Spent fuel safely 
stored; 

Nuclear waste safely 
stored; 

Decommissioning 
license in place; 

Design of 
core/primary circuit 
dismantling; 

Staff engaged on 
decommissioning; 

Safe maintenance; 

Defueling; 

Dismantling works; 

Radwaste treatment 
and conditioning; 

Licensing docs; 

Engineering design 
core/prim circuit 
dismantling; 

Staff training and 
reallocation; 

Status and 
progress reports; 

Regular 
monitoring 
meetings; 

License issued by 
the regulator; 

Staff accountancy; 

Nb of incidents/accidents; 

Environmental monitoring 
data; 

Nb of fuel elements stored 
and Nb of waste packages 
stored according to the 
planning; 

License issued according to 
the time schedule; 

Design completed in time; 

Nb of staff employed; 

Earned value analysis; 

Planning of safe 
maintenance; 

Nb of fuel elements 
unloaded; 

Quantity of material/system 
dismantled; 

Quantity of rad waste treated 
and conditioned; 

Submission of licensing doc; 

Design feasibility and 
engineering studies; 

Nb of staff trained and 
reallocated; 

Status and 
progress reports; 

Regular 
monitoring 
meetings; 

Detailed 
decommissioning 
work plan; 

Operational 
feedback to NPP 
planning 
department; 

HR plan; 

Efficient NPP 
management structure 
for decommissioning 
established and fully 
operational; 

Efficient 
decommissioning 
planning in place; 

Operational feedback 
effectively used; 

No changes in 
decommissioning 
strategy; 

Proactive project 
monitoring function 
in place; 

Efficient NPP 
management structure 
for decommissioning 
established and fully 
operational; 

National funding 
forthcoming to meet 
the funding gap; 

Economic viability 
for using own NPP 
staff; 

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