COMMISSION STAFF WORKING DOCUMENT The ITER Project Status Accompanying the document Communication from the Commission to the European Parliament and to the Council EU contribution to a reformed ITER project
Date: 2017-06-14
Institutions: Directorate-General for Energy, European Commission
Subjects: EAEC, European Joint Undertaking, Switzerland, investment, nuclear fusion, nuclear research, research project, scientific cooperation

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 14.6.2017  SWD(2017) 232 final   COMMISSION STAFF WORKING DOCUMENT The ITER Project Status Accompanying the document  Communication from the Commission to the European Parliament and to the Council EU contribution to a reformed ITER project {COM(2017) 319 final}  
 
 
I. 

INTRODUCTION 

ITER  is  a  global  project  to  build  and  operate  an  experimental  reactor  with  the  aim  of 
demonstrating  the  scientific  and  technological  feasibility  of  fusion  as  a  sustainable  and 
economic energy source. ITER contributes therefore to the strategic agenda of the European 
Union  for  clean  and  secure  energy  and  supports  the  first  objective  of  the  Commission's 
political agenda: 'boosting, jobs, growth and investment in future high potential technologies'. 

The  importance  of  this  project  cannot  be  underestimated.  It  has  the  potential  to  change 
globally  the  way  energy  is  produced  and  currently  it  is  also  one  of  the  largest  international 
research  projects  under  construction  in  the  world.  This  pioneering  initiative  is  developed 
under  the  terms  of  an  International  Agreement 1  between  the  European  Atomic  Energy 
Community  (Euratom)  and  6  other  Members  -  China,  India,  Japan,  Korea,  Russia,  and  the 
United States - signed in Paris in November 2006 and entered into force in October 2007. 

ITER is an important step in the development of fusion as an energy source – although over 
200  fusion  projects  currently  exist  in  the  world  in  a  number  of  countries  and  some  have 
already achieved important scientific results, no single country has the capacity to develop a 
project of the size of ITER, the scale of which is necessary for the breakthrough expected to 
demonstrate the feasibility of fusion as an energy source. 

The ITER project will be followed by a demonstration reactor (provisionally called DEMO) 
which  will  build  on  the  experimental  achievements  of  ITER  and  demonstrate  the  economic 
feasibility of commercial exploitation of fusion power. 

  A positive benefit of the ITER investment for the EU  

In its present  construction phase, ITER  is already having a positive economic  impact in the 
region where the site is located and, more generally, on the European industry, SMEs and the 
research community involved in the development and construction of thousands of first-of-a-
kind technological components.  

In fact, between January 2008 (the start of ITER activities) and December 2015, contracts for 
approximately EUR 3.6 billion have been awarded in Europe through about 750 procurement 
contracts  and  about  150  grants  supporting  Europe's  ITER  activities.  These  contracts  and 
grants  have  benefited  companies  including  SMEs  from  at  least  20  different  Member  States. 
All this translates into new knowledge and cutting-edge technology, market-oriented research 
and innovation and high skilled jobs and knowledge all over Europe. 

As  the  project  evolves,  more  procurements  and  grants  will  follow,  not  only  in  relation  to 
Euratom in-kind contributions but increasingly also for the assembly and tooling work needed 
by the project's central executive (the ITER Organization). These procurements will include 
new  specialisations  and  activities,  like  diagnostics,  remote  handling  and  heating  systems 
which require high technology solutions, opening opportunities for businesses from industrial 

1  The  agreement  established  the  ITER  Organization  with  full  international  legal  personality,  responsible  for  the  joint 

implementation of the ITER project. 

2 

 
 
                                                 
sectors and geographical regions that have not so far been prominently represented amongst 
the beneficiaries. 

  Euratom has a unique role (and responsibilities) in the ITER agreement, and has 

set up the Domestic Agency "Fusion for Energy" to fulfil its obligations 

Pursuant  to  Article  1.2  of  the  ITER  Agreement,  Euratom  is  the  Host  Party  of  the  ITER 
project,  which  entails  specific  responsibilities,  in  particular,  pursuant  to  Article  26.1  of  the 
ITER Agreement, the Host Party cannot withdraw from the project. Moreover, in accordance 
with the ITER Agreement, during the construction phase Euratom contributes a value of 5/11 
(around 45%) of which 80% is funded by Euratom, and 20% by France as the Host State of 
the  project),  while  the  rest  is  equally  divided  among  the  other  6  ITER  Members  (1/11  or 
around  ~9%  each).  During  the  subsequent  operation  and  deactivation  phases,  Euratom  will 
contribute 34% (of which 80% will be funded by Euratom and 20% by France as Host State 
of  the  project)  of  the  total  costs,  while  the  other  Members  will  increase  their  contributions 
from 9.09% to 10%, with the exception of United States and Japan, who will contribute 13%.  

The contribution of each ITER Member is provided both in cash and mostly in kind: in cash 
through contributions to the budget of the ITER Organization needed for its functioning and 
in  kind  through  the  delivery  of  components  of  the  ITER  machine.  Article  8.4  of  the  ITER 
Agreement foresees that each Member shall provide its contribution to the ITER Organization 
through an appropriate legal entity, a so called Domestic Agency. For Europe the Domestic 
Agency is the Joint Undertaking "Fusion for Energy" (F4E) established by Council Decision 
2007/198/Euratom  of  27  March  20072.  Fusion  for  Energy  has  its seat  in  Barcelona  (Spain). 
The Members of Fusion for Energy are the EU Member States, Euratom and Switzerland3.  

The  Euratom  contribution  to  the  ITER  project  is  defined  in  this  document  and  in  the 
Communication  as  the  joint  contribution  of  the  EU  budget,  France  as  Host  State  and  the 
Members of Fusion for Energy. This contribution is paid to the budget of Fusion for Energy. 
The share of the Euratom contribution to ITER (thus, through Fusion for Energy's budget) is 
funded 80% by the EU budget and ~20% by France. The overall budget of Fusion for Energy 
also benefits from an additional ~2% paid by its Members. 

The European Commission represents Euratom at the ITER Council and its subsidiary bodies 
as well as at the Fusion for Energy Governing Board. 

  The project has already been re-baselined once, in 2010 

The ITER agreement was signed in 2006 on the basis of a baseline4 established and agreed by 
the  Members  in  2001  in  order  to  be  able  to  converge  on  a  "Final  Design  Report"  and  a 
division of the in-kind procurements.  

2 OJ L 90, 30.03.2007, p.58. 
3 Article 1.3.c of the Fusion for Energy statutes allows third countries having a cooperation agreement with Euratom in the 
field of fusion that have associated their research programme to the Euratom programmes to become Members of the Joint 
Undertaking if they so wish. 

4 A "baseline" refers to the inter-related elements of scope (specifications of the machine to build), schedule (timetable for 

construction) and cost. 

3 

 
                                                 
The 2001 baseline estimated the total ITER construction costs at about EUR 5.9 billion (5896 
million  in  2008  values).  The  Euratom  contribution  thus  amounted  to  about  EUR  2.7  billion 
(around 45%, EUR 2680 million in 2008 values), composed of about EUR 1.7 billion for the 
components/systems  to  be  provided  “in  kind”,  and  about  EUR  1  billion  to  be  provided  "in 
cash" to the ITER Organization. Each Party committed to provide the agreed contributions in 
kind independently of the final cost of procuring and delivering components. These estimates 
for the Euratom contribution to ITER did not include the contribution to Fusion for Energy's 
expenditures for other activities5 or its running costs.  

Soon after the  start of  the project in 2007 it became evident that the 2001  baseline  was not 
accurate. In 2010, a new ITER baseline, focused on the construction phase, was adopted by 
the ITER Council based on estimated costs that were much higher than those agreed upon in 
2001. As part of the discussions on the agreement of the 2010 revised baseline, the Council of 
the EU established a EUR 6.6 billion cap up to 2020 (2008 values), for the construction phase 
of ITER, the completion of which was then estimated to be by 2020. This cap was on all the 
activities of Fusion for Energy. The annual financing obligations for Euratom stemming from 
the 2010 baseline are provided in table 1 of the annex. 

  Current challenges: cost and schedule overruns create a need to put the project 

back on track 

Although the 2010 baseline was based on a more realistic time plan and estimate of costs, the 
project  has  again  been  facing  delays  and  cost  overruns  since  at  least  2012.  The  delays  can 
partly be put down to the highly complex and technical nature of such a unique project where 
many  components  are  first  of  a  kind  and  management  concerns.  However,  there  is  also 
recognition that the schedule and cost estimates adopted in 2010 were based on an immature 
design and initial assumptions that have not been sufficiently robust, and that the management 
in the ITER Organization was cumbersome, which led to slow-decision making.  

The  combination  of  these  factors  has  led  to constant  design  changes  resulting  in  significant 
delays  and  additional  costs  to  the  project.  The  additional  costs  accrued  both  on  the  side  of 
Fusion for Energy (as design changes increased the cost of in-kind contributions) and on the 
side  of  the  ITER  Organization  (as  longer  design  times  result  in  more  personnel  costs  and 
design changes, which impact other activities, including e.g. future assembly works).  

These effects were further exacerbated by insufficient coordination and collaboration between 
the  Domestic  Agencies  and  the  ITER  Organization.  This  meant  that the  ITER  Organization 
did not feel directly the impact of these design changes (for which the ITER Organization was 
largely responsible) which were mainly impacting the Domestic Agencies who therefore bore 
the brunt of the resulting cost increases from their domestic budgets.  

This was particularly critical for the delivery of the Tokamak Buildings Complex, which falls 
within  Europe's  in-kind  obligations  and  which  suffered  from  continuous  changes  to  its 

5 "Other activities" refer to the implementation of the Broader Approach agreement with Japan and activities in preparation 
for  the  construction  of  a  demonstration  fusion  reactor  and  related  facilities  (including  the  International  Fusion  Materials 
Irradiation Facility (IFMIF, and the ITER Test Blanket Programme). 

4 

 
                                                 
specifications, from knock-on effects of design changes to components to be housed within it, 
and from increased safety requirements following the Fukushima incident. As a consequence, 
over  the  last  years  Fusion  for  Energy  accumulated  substantial  cost  overruns  in  its  in-kind 
contributions. These costs have been quantified and estimated in December 2015 to be over 
EUR 2 billion6. 

The  2013  Management  Assessment  of  the  ITER  Organization 7,  although  underlining  the 
complexity  of  the  project,  emphasised  that  important  shortcomings  in  the  management  and 
governance of the ITER Organization still remained, in particular the poor leadership of the 
ITER Organization  top  management, and recommended, inter alia, the  early  replacement of 
the  decision-making 
the  ITER  Organization  Director-General, 
procedures and the development of a stronger project culture and nuclear safety awareness.  

the  simplification  of 

II. 

TURNAROUND OF THE ITER ORGANIZATION 

As  a  response  to  the  recommendations  of  the  2013  Management  Assessment,  the  ITER 
Organization  developed  action  plans  to  address  the  managerial/organisational  matters  and 
governance issues identified. In addition, the ITER Council decided to accelerate the process 
to replace the ITER Organization Director-General, in line with the recommendations of the 
2013  Management  Assessment  of  the  ITER  Organization.  A  new  Director-General  was 
selected and nominated by the ITER Council of November 2014 with official appointment as 
from 5 March 2015 by an Extraordinary ITER Council. The 2013 Management Assessment 
was  thus  a  turning  point  which  pointed  to  the  inadequate  management  and  started  the 
turnaround process which led to the 2015 changes. 

The European Commission has worked closely with other ITER Members and with the new 
ITER  Organization  management  to  put  in  place  a  comprehensive  strategy  to  put  the  ITER 
project  back  on  track.  The  main  focus  of  this  strategy  was  to  ensure  management 
improvements  of  the  ITER  Organization  and  increase  the  effectiveness  of  governance,  in 
order to put the project back on track and thus provide a reliable schedule for the construction 
and operation of ITER. 

The  action  plan  of  the  new  Director-General  included  major  changes  to  the  ITER 
Organization  both  in  the  project  management  and  globally.  The  action  plan  has  been  built 
around the strong integration of the ITER Organization and Domestic Agencies at all levels, 
and  with  centralisation  of  executive  authority  through  on  the  ITER  Organization  Director-
General  as  the  Chief  Executive  Officer  of  the  entire  project,  with  full  authority  over  all 
technical aspects.  

In  order  to  enable  effective  decision-making,  the  action  plan  foresaw  the  introduction  of  a 
number  of  new  instruments,  e.g.  an  Executive  Project  Board  (in  charge  of  supervising 

6 Fusion for Energy Report to the Council of the EU 2015. 
7 The ITER Agreement, Art. 18 foresees that "Every two years, the Council shall appoint a Management Assessor who shall 
assess  the  management  of  the  activities  of  the  ITER  Organization.  The  scope  of  the  assessment  shall  be  decided  by  the 
Council […]. The purpose of the assessment shall be to determine whether the management of the ITER Organization has 
been sound, in particular with respect to management effectiveness and efficiency in terms of scale of staff". 

5 

 
                                                 
technical  aspects  of  the  project)  and  the  Integrated  Project  Teams,  formed  by  the  ITER 
Organization and the Domestic Agencies, and in charge of key components and actions. 

Furthermore,  a  Reserve  Fund  was  created  to  cover  the  additional  costs  of  the  Domestic 
Agencies caused by changes initiated by the ITER Organization to the design of components. 
The provisions for its use were adopted by the ITER Council in 2015 and its implementation 
is  under  the  direct  responsibility  of  the  Director-General  of  the  ITER  Organization.  It  is 
funded  from  the  cash  contribution  of  the  ITER  Members  according  to  their  share  in  the 
construction  phase  (45%  for  Euratom).  Euratom  has  insured  that  its  contribution  to  the 
Reserve Fund is within the capped budget for ITER up to 2020. From 2021 onwards the ITER 
Organization  has  estimated  a  total  contribution  to  the  Reserve  Fund  which  for  Euratom  is 
taken into account in the estimates for the in-cash contribution reported in tables 1 and 2 of 
the annex. In the same tables a best estimate of the potential revenue from the Reserve Fund 
to Euratom from currently known design changes is explicitly given. The Fund introduces an 
incentive for the ITER Organization to minimize changes as much as possible, and therefore 
acts as a risk mitigation measure. 

The action plan also suggested some reforms to the ITER Organization, in order to optimise 
human  resources.  The  year  2015  was  marked  by  several  organisational  changes  in  the 
appointments  of  the  ITER  Organization  senior  management,  including  a  very  rigorous 
selection  process  of  the  two  Deputy  Directors-General,  as  well  as  the  replacement  of  other 
key division leaders and restructuring of the functions of the ITER Organization departments. 
An  important  change  is  that  one  of  the  two  Deputy  Directors-General  is  also  the  Chief 
Operating  Officer,  supporting  the  Director-General  in  all  matters  related  to  design, 
construction, installation, testing, commissioning and operation, thus providing much needed 
technical  leadership.  The  reduction  of  the  top  management  functions  from  7  Deputy 
Directors-General  (one  per  Party)  to  just  two  was  an  important  step  to  de-politicise  the 
organisation.  The  resulting  new  senior  management  structure  reflects  better  the  needs  of  a 
construction project. 

In about one year and a half of his leadership, the Director-General of the ITER Organization 
has  completed  about  60%  of  his  action  plan,  and  the  rest  is  making  good  progress.  The 
progress  in  the  management  turnaround  received  positive  feedback  from  the  Management 
Assessment 2015, which acknowledged noticeable efforts of the ITER Organization to make 
the  ITER  project  advance.  It  recognised,  in  particular,  the  effectiveness  of  the  Director-
General's  leadership  and  of  his  action  plan,  with  improvement  of  the  decision  making 
processes,  cooperation  between  the  ITER  Organization  and  Domestic  Agencies,  human 
resource management, and overall performance of the ITER Organization management, thus 
leading to a positive momentum change in the construction activities and the achievement of 
(nearly) all construction milestones.  

The positive appreciation of the progress made both by the ITER Organization management 
and the project itself was expressed also in other recent independent reviews (see section IV 
for details).  

6 

 
III. 

TURNAROUND IN FUSION FOR ENERGY  

Ensuring  that  Euratom  participation  in  the  ITER  project  is  cost-efficient  for  European 
taxpayers  and  effective  in  terms  of  benefits  for  Euratom  requires  changes  not  only  in  the 
ITER Organization but also in Fusion for Energy, where improvements in sound management 
practice  and  effective  cost  control  need  to  continue.  The  Commission  works  on  ensuring 
further improvements in close collaboration with Fusion for Energy's management. 

Fusion for Energy's role in the ITER project is crucial, in line with the dominant (45%) share 
of Euratom in the project. The major large contracts for the Tokamak Buildings Complex, the 
vacuum vessel and the superconductive magnet (toroidal and poloidal) coils have been signed 
and construction and manufacturing are in progress. With the progress of the work, Fusion for 
Energy has been experiencing difficulties, largely due to the numerous changes requested by 
the ITER Organization to the specifications of the components to be delivered, as pointed out 
in the previous sections.  

Weaknesses in Fusion for Energy's organization and management were first identified in 2009 
in an internal management assessment of Fusion for Energy initiated by the Governing Board, 
which underlined in particular the lack of a project culture and industrial expertise. A series of 
changes in the structure of its governance followed in the period 2010-2015. The Governing 
Board took first measures to better prepare the meetings of the Governing Board, but also to 
follow up specific critical issues between meetings. The Governing Board also endorsed the 
involvement  of  the  Commission  Internal  Audit  Service  (IAS)  in  Fusion  for  Energy  as  from 
2012, complying with a recommendation of the Court  of Auditors and thus establishing the 
IAS as the internal auditor of Fusion for Energy. In parallel, the Commission repeatedly urged 
Fusion for Energy to implement cost-containment measures. 

Based  on  the  lessons  learned,  the  Commission  has  also  re-structured  the  working  relations 
aiming  at  establishing  efficient  and  transparent  coordination  and  exchange  of  information 
between Fusion for Energy and the services of the Commission. 

The effectiveness of these changes was undermined by the frequency of changes of the Fusion 
for Energy Director (in total, 5 persons occupied the function of Fusion for Energy Director 
for  periods  of  various  lengths  over the  9  years of  Fusion  for  Energy's  history  from  2007  to 
2015) as well as the instability in project management in the ITER Organization. 

The  main  opportunity  to  redress  the  situation  came  in  spring  2015  with  the  action  plan 
presented  by  the  acting  Director  of  Fusion  for Energy,  focused  on  actions  in  support  of  the 
action  plan  of  the  new  Director-General  of  the  ITER  Organization.  The  plan  involved  the 
following major points: 

  Full implementation of audit recommendations; 

 

Improvement of the contract management tools, with in particular reinforcement of the 
on-site supervision of work at contractors; 

  Gradual merging of configuration management processes and tools with those of the 

ITER Organization; 

7 

 
 

Implementation  of  a  system  to  manage  cost  estimates  and  fund/contingency  with 
delivery at the end of 2015 of a new estimation of the cost at completion for the ITER 
components to be delivered by Euratom during the construction phase. 

It  led  to  important  changes  in  Fusion  for  Energy,  such  as  the  creation  of  a  Project 
Management Department to reinforce planning  and  control processes,  redeployment of staff 
to  high  priority  areas  and  moving  of  staff  to  Cadarache  to  improve  work  relations  and 
efficiency  with  the  ITER  Organization.  Efforts  were  also  made  to  restructure  Fusion  for 
Energy's management and strengthen project control and cost containment measures.  

These  steps  laid  the  ground  for  the  arrival  in  January  2016  of  a  new  Fusion  for  Energy 
Director  whose  selection  in  late  2015  focused  for  the  first  time  on  industrial  and  project 
management  experience.  This  is  expected  to  bring  a  new  impulse  in  the  way  Fusion  for 
Energy manages and delivers the Euratom contribution to ITER.  

Notwithstanding  the  above,  the  European  Court  of  Auditors  (ECA)  has  always  issued  an 
'unqualified'  opinion  on  Fusion  for  Energy's  annual  accounts  since  2007  (when  Fusion  for 
Energy  was  set  up).  While  this  assurance  on  the  legality/regularity  of  Fusion  for  Energy's 
operations and on absence of material errors in Fusion for Energy's accounting and financial 
transactions is very important, it is not sufficient to guarantee a clean bill of health as regards 
Fusion for Energy's governance and management record. Indeed, the European Parliament in 
April  2016  postponed  its  decision  on  granting  the  Fusion  for  Energy  Director  discharge  in 
respect of the implementation of the Joint Undertaking’s budget for the financial year 2014. 
The  urgent  need  for  a  credible  revision  of  the  ITER  schedule  and  for  curtailing  the  risk  of 
continuous cost increase was  the major issue underlined by ECA ('emphasis  of matter') and 
was  reflected  in  the  basis  for  the  European  Parliament's  decision.  The  discharge  was 
eventually  granted  in  October  20168 on  the  basis  of  the  overall  progress  of  both  Fusion  for 
Energy  and  the  ITER  Organization,  and  the  revision  of  the  baseline.  This  confirms  that  the 
project  needs  a  new  baseline,  a  need  felt  not  only  in  Euratom  but  also  in  the  ITER 
Organization and shared by other ITER Members. The Management Assessment 2015 report, 
as its predecessor Management Assessment 2013, also urges that the ITER Organization and 
Domestic  Agencies  should  be  fully  committed  in  developing  a  realistic  ITER  project 
schedule. 

IV. 

TOWARDS A REVISED ITER PROJECT BASELINE 

  The Updated Long-Term Schedule - proposed in November 2015 and rejected by 
the  ITER  Council  because  it  did  not  address  all  issues  and  did  not  take  into 
account the constraints of the Members 

In November 2015, the ITER Organization submitted to the ITER Council a proposal for an 
Updated  Long  Term  Schedule,  covering  schedule,  resource  estimates  and  a  preliminary 
staffing plan. The proposal did not take into account existing constraints from the Members, 
and  did  not  include  sufficient  risk  mitigation  actions  to  provide  confidence  in  the  proposed 

8 Official Journal of the European Union, L 333/66 (8.12.2016). 

8 

 
                                                 
schedule.  It  also  required  significant  additional  cash  contribution  from  the  ITER  Members 
(and especially from Euratom, given the share of construction costs) and requested to double 
the number of ITER staff, but without clear and convincing justifications for this request. 

Additionally, in this proposal there was no evidence that the resources were concentrated to 
finalise the construction phase of the machine, and at the same time it envisaged a delay by 
five  years  for  First  Plasma  (from  2020  to  2025),  the  critical  milestone  when  the  main 
construction phase can be considered as completed. For Euratom in particular, endorsement of 
such  a  proposal  would  have  required  an  additional  financial  contribution  of  about  EUR  0.5 
billion above the total Euratom contribution until 2020 compared with the 2010 Baseline. 

The  ITER  Council  rejected  the  proposal  and  requested  that  further  iterations  between  the 
ITER Organization and the Domestic Agencies take place to ensure reliability, stability and 
cost sustainability of the schedule over the long term, and to avoid the risk that the forecasted 
date of the First Plasma is immediately impacted, because of additional delays in the delivery 
of  critical  path  components.  The  ITER  Council  additionally  requested  that  a  high  level 
independent  assessment  be  carried  out  of  the  ITER  Organization  proposal  on  the  Updated 
Long Term Schedule. The ITER Council agreed therefore to form the ITER Council Working 
Group  on  Independent  Review  of  the  Updated  Long-Term  Schedule  and  Human  Resources 
(in brief ITER Council Review Group) to assess the rejected Updated Long Term  Schedule 
(with the associated costs/resources) as well as a revised schedule and cost/resource estimates 
that takes into account the financial constraints of the Members.  

In parallel, to allow the project to move forward and at the same time monitor the project and 
gain confidence that the project was under control, the ITER Council also approved a working 
schedule for ITER for 2016 and 2017, together with a set of critical milestones for the same 
period for monitoring purposes. This two-year schedule requires a modest increase in staffing 
that  partially  satisfied  the  requests  from  the  ITER  Organization,  and  is  funded  without 
additional  in-cash  contribution  from  the  ITER  Members  with  respect  to  the  agreed  2010 
baseline. 

  From the Updated Long-Term Schedule to the staged approach 

On 27 April 2016, the ITER Council endorsed at an extraordinary meeting the assessment of 
the  ITER  Council  Review  Group.  The  final  report  was  fully  in  line  with  the  concerns 
consistently  raised  by  the  Euratom  Delegation:  it  acknowledged  the  good  work  carried  out 
with the development of the first schedule proposal of November 2015 but confirmed the two 
major weaknesses already identified by the ITER Council. The ITER Council Review Group 
recognised that the sequence and duration of activities of Updated Long Term Schedule were 
fully and logically mapped and that resource estimates were generally complete and credible, 
with  no  significant  overestimates  or  underestimates.  However,  it  pointed  out  that  both 
schedule and cost estimates had no contingency, which represented an important element of 
risk to achieve the First Plasma date in December 2025 and therefore made it impossible to 
have confidence in the Updated Long Term Schedule.  

The ITER Council Review Group also judged the exercise of revision of the Updated Long 
Term  Schedule  based  on  additional  iterations  between  the  ITER  Organization  and  the 

9 

 
Domestic Agencies to be beneficial and providing important added value. The ITER Council 
Review  Group  report 9  concluded  that  the  revision  exercise  should  continue  and  further 
iterations  should  be  taken  by  the  ITER  Organization  and  the  Domestic  Agencies  in 
completing  the  revision  of  the  schedule  and  associated  resources  (the  so-called  Iteration 
Modelling).  It  recommended  a  staged  approach  to  the  project,  focusing  on  successful 
achievement of First Plasma as a first step, and with each following stage focused on clearly 
identified  key  project  deliveries.  The  staged  approach  would  thus  be  an  important  tool  to 
complete construction while managing and reducing the risks.  

In  this  context,  the  ITER  Council  Review  Group  furthermore  recommended  to  enhance  the 
ITER Organization risk mitigation management by prioritising risks (in terms of occurrence 
and impact), quantifying the cost contingency needed and expanding the scope for use of the 
Reserve Fund. 

With  regards  to  the  organisation  and  management  of  Human  Resources  within  the  ITER 
Organization,  the  ITER  Council  Review  Group  conducted  a  benchmarking  exercise  with 
other organisations and analysed cost books and staffing for a sample of key activities. The 
results show that the size of the organization is reasonable and requests for staff are, for the 
most  part,  warranted.  The  ITER  Council  Review  Group  encouraged  the  use  of  Domestic 
Agencies' expertise as one way to optimise the use of staff resources. 

  The  staged  approach  focuses  available  resources  on  First  Plasma  in  December 
2025  (earliest  technically  achievable  date)  and  ensures  that  the  Euratom 
contribution remains within EUR 6.6 billion by 2020 

Following  the  Iteration  Modelling  exercise  in  full  cooperation  with  all  Domestic  Agencies, 
the  ITER  Organization  submitted  to  the  18th  meeting  of  the  ITER  Council  of  June  2016  its 
proposal for a revised schedule to First Plasma and an overall strategy from First Plasma to 
the  Deuterium-Tritium  phase,  which  took  into  account  the  recommendations  of  the  ITER 
Council Review Group report and the constraints of the Members. The ITER Council of June 
2016 proposal is built on the staged approach, with the first stage focusing on delivering First 
Plasma in December 2025 (the earliest technically achievable date i.e. assuming all risks can 
be mitigated). The United States Department of State stressed in its report for Congress10 that 
further risk of schedule slippages could still materialize. A subsequent detailed review of the 
project to First Plasma carried out by the United States Department of Energy in January 2017 
further confirmed that the project schedule should have a contingency of 24 months. Rather 
than including an explicit time contingency, in the revised schedule project risks are actively 
reduced  by  tackling  progressively  technical  challenges,  and  providing  flexibility  for 
accommodating placed contracts. Construction activities to First Plasma are to be followed by 
additional  Final  Installations  activities  (also  covered  by  the  construction  budget)  in  the 
operation  phase  from  January  2026  until  the  start  of  Deuterium-Tritium  Operation  in  2035. 
From the beginning of the schedule revision exercise, the Commission stressed to Fusion for 

9 Report of the ITER Council Working Group on the Independent Review of the Updated Long-Term Schedule and Human 

Resources, 15 April 2016. 

10 U.S. Department of Energy, "U.S. Participation in the ITER Project" (May 2016). 

10 

 
                                                 
Energy that the capped budget of EUR 6.6 billion (2008 values) up to 2020 had to be adhered 
to, and furthermore that additional savings were needed for the period after 2020 to contain 
the  overall  extra  costs  to  completion.  Fusion  for  Energy's  internal  restructuring  of  activities 
and resources (the so-called “Straight Road to First Plasma”) was made to ensure this and it 
provided its input to the ITER Organization accordingly.  

The  ITER  Council  of  June  2016  proposal  based  on  the  staged  approach  and  taking  into 
account Fusion  for Energy's  Straight Road to First Plasma strategy enables Euratom to stay 
within the EUR 6.6 billion cap up to 2020 (in 2008 value) thanks to the reduction of in-kind 
contributions during the period up to 2020. It also results in lower in-kind contributions for 
the period 2021-2025 compared with the Updated Long Term Schedule proposal, as non-First 
Plasma  components  (also  included  in  the  construction  budget)  are  largely  shifted  to  after 
2025.  

  Staged  approach  From  First  Plasma  to  Deuterium-Tritium  operation  and  cost 

containment 

The detailed schedule for the period from First Plasma in December 2025 to the Deuterium-
Tritium phase estimated in 2035 was presented to the ITER Council in November 2016. This 
proposal included: 

  a  complete  schedule  and  cost  including  staffing  estimate  in  the  form  of  updated 
Overall  Project  Schedule  (OPS),  Overall  Project  Cost  (OPC)  and  Project  Plan  and 
Resource Estimate (PPRE) for the period up to 2025;  

  an indicative schedule and cost baseline for the period from 2026 to 2035. 

The  updated  schedule  from  First  Plasma  until  the  Deuterium-Tritium  phase  now  envisages 
additional  Final  Installations  activities  (also  covered  by  the  construction  budget)  in  the 
operation phase from January 2026 until the start of Deuterium-Tritium Operation in 2035 by 
alternating  installation  stages  ,for  all  remaining  components  necessary  for  fusion  power 
operation,  with  limited  operation  campaigns  in  between.  This  approach  focuses  available 
resources in a structured way,  ensures that the known  constraints of  the Members are taken 
into account and minimises the delay to the start of the Deuterium-Tritium operation. At the 
same time, it allows for meaningful experimental campaigns between assembly phases, thus 
allowing the fusion community to gain confidence in operating the machine and building up 
to  full  performance  before  going  into  the  nuclear  (DT)  phase  with  fusion  power  operation. 
The total number of staff remains capped to a maximum of 1050.11  

  Endorsement ad referendum of the schedule  

The ITER Councils of June and November 2016 approved the new schedule and associated 
estimated costs (costs approved ad referendum) as the basis to prepare a new ITER Baseline 
that should be approved by the ITER Members at an ITER Council meeting, most likely in 
2017 at ministerial level. 

11 Record of Decisions of the 19th ITER Council (16-17 November 2016). 

11 

 
                                                 
  Potential impact of the staged approach for the European scientific community 

ITER  remains  the  most  important  facility  in  the  European  fusion  roadmap.  ITER  is  on  the 
critical path of this roadmap, and any delay in ITER operation will impact on the achievement 
of the roadmap's long-term objective, that of delivering fusion electricity to the grid within a 
realistic yet ambitious time horizon. However not all research in the roadmap requires ITER 
to be operational and the delay in the start of ITER operation enables crucial long-lead time 
research (such as development of new materials for DEMO and eventual fusion power plants) 
to  progress  to  a  much  more  advanced  stage  by  the  time  ITER  achieves  its  operational 
objectives.  

Delays  in  ITER  can  be  partially  mitigated  also  through  a  more  concerted  approach  to  the 
exploitation  of  other  key  tokamaks  around  the  world,  thereby  better  preparing  for  ITER 
operation  and  enabling  the  ITER  experimental  programme  to  be  accelerated  as  much  as 
possible. Within Europe, such an approach is already integrated into the EUROfusion12 joint 
programme, with the exploitation of the European medium-sized tokamaks, including larger 
facilities like JET (in the UK) fully coordinated and focused on support for ITER. This can be 
extended to the global scale by better coordinating the exploitation and scientific programmes 
of the large tokamaks operated by the other ITER Members, such as K-STAR (Korea), EAST 
(China), and DIII-D (United States.). This is particularly the case for the JT-60SA Tokamak 
(Japan), being constructed on budget and on time by Euratom, the Voluntary Contributors to 
the Broader Approach13 and Japan as part of the ITER Broader Approach project. This could 
bring greater confidence in how to operate ITER both technically and with optimum plasma 
performance.  

The on-going mid-term review of the EUROfusion activities 2014-18, and associated revision 
of the fusion roadmap (due to be available by spring 2017), must of course take into account 
the revised ITER schedule. This should further enable crucial long-lead time research for the 
fusion  research  community  needed  to  underpin  the  commercial  viability  of  future  fusion 
reactors,  such  as  the  development  of  new  materials  through  the  construction  of  suitable 
facilities for instance for materials irradiation using a neutron source, e.g. the DEMO Oriented 
Neutron  Source  DONES.  In  this  respect,  three  EU  Members  States  (Croatia,  Poland  and 
Spain) are currently interested to host this facility. 

  Active risk mitigation through careful monitoring of high level milestones 

At ITER Council of June 2016 the Commission also stressed the need to monitor closely the 
project's  progress  in  the  next  two  years  against  the  set  of  milestones  selected  by  both  the 
ITER Organization and the Domestic Agencies as approved by the ITER Council. The ITER 
Council  Review  Group  agreed  with  this  approach,  and  in  its  report  also  recommended  to 
identify further critical milestones for the years after 2017 in order to provide early warning to 
critical path deliverables or assembly risks. The ITER Organization therefore included as part 

12 The  European  Consortium  for  the  Development  of  Fusion  Energy  (EUROfusion,  https://www.euro-fusion.org/)  is  a 
consortium  of  30  national  fusion  research  organisations  and  laboratories  from  26  EU  Member  States  (excluding 
Luxembourg  and  Malta),  plus  Switzerland  and  Ukraine  (from  1/1/17),  that  participate  in  collective  fusion  research 
activities under a European Joint Programme co-financed under the Euratom Research Programme (2014-2018). 

13 Belgium, France, Germany, Italy, and Spain. 

12 

 
                                                 
of  their  reinforced  risk  mitigation  process  the  careful  monitoring  of  additional  high  level 
milestones, which would be reviewed and complemented at the end of each year by additional 
working level milestones for the next two years' period. 

  The status of the project allows a better planning for longer term  

o  Maturity of the design 

The  ITER  Organization  and  Domestic  Agencies  have  made  significant  progress  in  the 
development  of  the  project.  Work  done  by  the  Domestic  Agencies  under  the  Procurement 
Arrangements  (91%  of  which  have  now  been  signed  by  the  ITER  Organization  with  all 
Domestic  Agencies  in  terms  of  nominal  shares  of  value  credits14)  is  progressing  well  and 
momentum  is  building.  The  ITER  Organization,  together  with  the  Domestic  Agencies,  has 
analysed the global status of First Plasma components15 in areas such as design, procurement, 
manufacturing, shipment, on-site installation, and testing and commissioning. This analysis is 
based on key  elements of  the scheduled activities  which represent the major ITER  systems, 
but  exclude  Assembly  and  Installation.  The  percentage  completion  up  to  First  Plasma  has 
been estimated by the ITER Organization to be 89% complete through final design, and 24% 
manufacturing.  The  percentage  of  manufacturing  includes  partial  credit  for  components 
partially  completed.  The  percentage  completion  for  non-First  Plasma  components  was  also 
estimated  by  the  ITER  Organization  to  be  71%  complete  through  final  design,  11% 
manufacturing16. 

To  further  reduce  the  risk  of  schedule  delays  and  cost  overruns,  the  ITER  Council  also 
requested  at  ITER  Council  of  June  2016  that  the  interfaces of  the  First Plasma  components 
linked to the schedule be frozen as quickly as possible. 

o  Improved governance 

Through  his  action  plan,  the  Director-General  of  the  ITER  Organization  reformed  the 
management of the project in several areas (see section II). At the 18th ITER Council of June 
2016 improvement was reported in several areas, in particular: 

1.  Tight coordination of the activities of the ITER Organization and Domestic Agencies 
staff,  now  jointly  in  charge  of  specific  equipment  or  tasks  through  the  creation  of 
Integrated  Project  Teams  (to  date  three  Project  Teams  have  been  established: 
Cryogenics,  Vacuum  Vessel,  and  Buildings,  Site  Infrastructure  &  Power  Supplies 
Distribution). 

2.  Human Resources are being continuously optimised for improved efficiency and cost 
effectiveness, including the recent replacement of the Head of the Human Resources 
Department. 

14 This  nominal  share  is  formally  accounted  through  the  ITER  Unit  of  Account  (IUA),  defined  so  that  1  IUA  =  USD  1 

thousand (January 1989 value), or EUR 1,690.12 (2016 value).  

15 First  Plasma  systems  include:  Buildings,  Steady  State  Electrical  Networks,  Cable  Trays,  Vacuum  Vessel,  Gas  Injection 
System,  Magnets,  Cryostat,  Thermal  Shield,  Cooling  Water,  Vacuum  System,  Cryoplant  and  Distribution,  Coil  Power 
Supplies and distribution, CODAC, Central Interlock System, Central Safety System, ECRH, Diagnostics and Port Plugs, 
In-Vessel Viewing System, Access Control and Security Systems. 

16 MAC-21_04.4.1, Report on Activity Plans (21st MAC meeting, 24-26 May 2016). 

13 

 
                                                 
3.  Implementation  of  coordinated  tools  for  establishing  a  nuclear  project  culture,  in 
particular a plan to enhance knowledge on nuclear safety in the ITER Project focusing 
on root causes.  

In the present context of efforts to put the project back on track, it is necessary to pay further 
attention  to  the  governance  of  the  project.  Efficiency  in  the  decision-making  of  the  ITER 
Council can be increased for instance by structuring the agenda of the meetings so that they 
focus on strategic questions. Thorough preparation of the ITER Council discussions should be 
ensured in advance through the Council Preparatory Working Group (CPWG) in addition to 
the  Management  Advisory  Committee  (MAC)  and  the  Science  and  Technical  Advisory 
Committee  (STAC).  Approval  of  general  non-strategic  and/or  operational  issues  could  be 
delegated to the MAC and to the STAC where relevant. At the initiative of the Euratom and 
United  States  Delegations,  the  ITER  Council  has  therefore  decided  at  the  ITER  Council  of 
June 2016 to establish a study group to look into the implementation of the governance of the 
project  through  the  various  standing  committees  mentioned  above  as  well  as  the  Financial 
Audit  Board  and  the  Management  Assessment,  and  formulate  recommendations  for 
improvement where necessary. At the 19th ITER Council (ITER Council of November 2016) 
the Study Group presented some solutions for the rationalisation in the work of ITER Council 
subsidiary bodies but that further improvements in the efficiency of the ITER Council will be 
necessary.  On  this  basis,  the  ITER  Members  endorsed  most  of  the  recommendations  of  the 
Study  Group  and  requested  the  group  to  carry  out  a  further  analysis  to  merge  subsidiary 
bodies  and  improve  preparations  of  ITER  Council  meetings  to  achieve  further  streamlining 
and efficiency in decision-making. The ITER Council in November 2016 agreed to reduce the 
number of sub-committees and to eliminate overlaps. In 2017 the ITER Council will further 
analyse  simplification  opportunities  with  the  objective  to  focus  governance  on  delivery  and 
strategic issues. 

o  Professional risk management is introduced in the management of the project 

In the past there have been attempts to reconcile the different approaches to risk management 
of the ITER Members. In particular, there is (in general) a division in how different countries 
approach risk management. From the scheduling point of view, it is customary in Europe and 
the United States to make a success-oriented schedule and then estimate separately possible 
delays and any foreseeable additional work directly from the individual tasks. The associated 
risks are then estimated and folded into the schedule to make it more realistic and establish a 
confidence level for the achievement of e.g. First Plasma at a given date. At the same time, a 
risk  register  is  established  and  possible  mitigation  actions  are  identified.  On  the  contrary, 
Asian  countries  have  an  almost  complete  success-oriented  approach,  without  taking  into 
account  risks  and  delays.  This  difference  in  approach  implies  that  the  assumptions  of  the 
Domestic Agencies in their submissions to the schedule may differ and this causes problems 
when integrating them into an overall project schedule.  

The  approach  taken  to  develop  the  schedule  is  to  create  a  technically  achievable  schedule 
based on the submissions from all the Domestic Agencies and then add the risk at the central 
level, taking into account the risk assessment provided by the Domestic Agencies, especially 
for those risks that have an important impact at the overall schedule are taken into account. 

14 

 
In  parallel,  the  ITER  Organization  is  implementing  a  reform  of  the  risk  management 
capability  through  the  preparation  of  a  Management  Plan  and  the  creation  of  an  overall 
internal  risk  management  system,  including  Project  Risk  &  Opportunity  Management 
Committee for joint assessment of risks and mitigation actions by the ITER Organization and 
Domestic Agencies. 

o  Critical  path  issues  are  being  addressed:  freezing  the  design  of  the  buildings, 

transfer of vacuum vessel sectors, and realistic estimates for the Assembly 

As a result of the above mentioned reforms, there is now more attention to the critical path at 
project  level  and  the  management  is  focusing  on  critical  in-kind  deliverables  and  on  the 
assembly  process  itself.  This  is  particularly  important  for  the  Euratom  in-kind  contribution, 
which is 45% of the total and has several important components on the critical path to First 
Plasma. Two significant examples of this situation are the buildings and the vacuum vessel, 
now managed by Integrated Project Teams that ensure tight coordination of the activities.  

In particular, while the buildings have suffered (and continue to suffer to some degree) in the 
past from constant design  changes,  the situation is  now that the  specifications are gradually 
being  frozen  with  floor  by  floor  and  building  by  building  due  dates  being  established,  after 
which  new  changes  can  be  made  only  after  specific  approval  of  the  ITER  Organization 
Director-General17.  

The vacuum vessel is provided by both Euratom and Korea. The original division of in-kind 
contribution foresees that Fusion for Energy is responsible for delivering 7 out of 9 sectors, 
and  the  Korean  Domestic  agency  the  remaining  2  sectors.  Due  to  serious  and  prolonged 
technical  and  organizational  problems  of  some  companies  of  the  consortium  producing  the 
European  sectors,  at  The  ITER  Council  of  June  2016  and  with  the  consent  of  Euratom  the 
responsibility to procure two of the seven European sectors was transferred from Euratom to 
the ITER Organization that will delegate to the Korean Domestic Agency the management of 
the manufacturing and delivery of the two transferred sectors in addition to those originally 
attributed  to  Korea.  This  transfer  will  allow  a  better  balance  of  the  work  between  the  two 
Members and create float in the European schedule.  

Regarding the Assembly, the situation is different: assuming the components are available on 
site at the time they are needed, the duration of the assembly and commissioning schedule (~ 
7  years)  is  determined  by  the  duration  of  the  different  tasks  and  by  the  use  of  parallel 
execution  (in  particular  in  the  Tokamak  area)  as  far  as  possible.  The  assembly  will  be 
managed by a "Construction Manager as Agent" (CMA), under a contract signed in July 2016 
after approval by the ITER Council. While the assembly work has been looked at in detail by 
the  ITER  Organization,  the  contract  foresees  that  the  CMA  reviews  Contract  and 
Management Requirements before the tenders for assembly works are launched at the end of 
2017.  The  consequent  delay  of  these  contracts  (by  about  one  year)  has  been  mitigated  by 
signing end of 2016 two separate contracts for the Site Services Building and the Sector Sub-

17 Record of Decisions, 18th meeting of the ITER Council (June 2016). 

15 

 
                                                 
Assembly Tooling. As a consequence, the overall assembly should not be delayed, while the 
part covered by the CMA contract will have a much more solid base. 

o  Monitoring of milestones allows the ITER Council to closely supervise the ITER 

Organization's progress 

The  overall  monitoring  of  the  ITER  Organization  has  improved.  The  ITER  Council 
milestones, requested by the ITER Council at its November 2015 meeting to monitor progress 
and  adherence  to  the  schedule  for  the  years  2016-2017,  are  an  effective  tool  to  control  the 
progress  of  construction  and  act  as  an  early  warning  system  on  the  basis  of  which  it  is 
possible  to  act  swiftly  to  solve  any  emerging  problems  in  the  construction  schedule.  At  its 
June  2016  meeting,  therefore,  the  ITER  Council  decided  to  expand  this  list  to  cover  the 
schedule  up  to  First  Plasma.  In  parallel,  the  ITER  Organization  established  a  much  more 
extensive  list  of  so-called  Internal  Project  Milestones,  with  set  threshold  dates  and  an 
automatic warning when a forecast date goes beyond its threshold. The delay that can occur 
before  the  warning  is  given  depends  on  the  criticality  of  the  milestone:  for  more  critical 
milestones this difference between the threshold date and the reference date is much shorter 
than for less critical ones. 

V. 

THE FINANCIAL IMPLICATIONS OF THE NEW BASELINE 

  The  Euratom  contribution  post  2020  will  finance  the  completion  of  all  critical 
path  components  to  First  Plasma,  and  prepare  the  ground  for  subsequent 
assembly  phases  beyond  First  Plasma  leading  to  the  fusion  performance  phase 
(Deuterium-Tritium) 

The resources needed by Euratom to enable the successful completion of the facility and the 
start of the performance operation phase have been estimated in this section on the basis of 
the cash request presented by the ITER Organization to the ITER Council of November 2016 
and Fusion for Energy's estimates presented at its Governing Board of December 201618. All 
quoted values are in 2008 unless explicitly stated otherwise, while the enclosed tables report 
the estimates in both 2008 and current values.  

The  total  amount  of  cash  for  the  ITER  Organization  from  all  the  ITER  Members  for  the 
construction phase to First Plasma is now  foreseen at about EUR 5.6 billion, for the  period 
2014-2025 (until First Plasma). Out of that, EUR 3 billion of cash contribution from the ITER 
Members concern specifically the period 2021-2025, which covers the construction phase to 
First Plasma19.  

As  mentioned  above,  the  staged  approach  proposal  presented  at  the  ITER  Council  of  June 
2016  restructured  the  schedule  to  take  into  account  the  financial  constraints  of  the  ITER 
Members, notably of Euratom. This has been obtained by limiting the in-cash contribution to 
the  ITER  Organization,  as  well  as  postponing  the  procurement  and  installation  of  all 
components  not  essential  for  First  Plasma.  Consequently,  Fusion  for  Energy  is  on  target  to 
respecting the EUR 6.6 billion cap up to 2020. 

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

16 

 
                                                 
The  resources  needed  after  2020  by  Euratom  following  the  revision  of  the  schedule  are 
reported in detail in Table 1 (in 2008 value, and corresponding Table 2 in current values) in 
annex.  The  total  (2014-2035)  estimated  Euratom  contribution  to  the  cash  requirements 
(including  operation  and  decommissioning/deactivation)  of  the  ITER  Organization  is  EUR 
3.7  billion,  of  which  EUR  1  billion  is  covered  by  the  current  Multi-annual  Financial 
Framework.  For  the  period  2021-2025  (up  to  First  Plasma),  the  ITER  Organization  will 
require EUR 1.1 billion. The remaining EUR 1.6 billion of Euratom contribution will cover 
the period up to the start of the performance operation (2026-2035), and will cover both the 
Final  Installation  activities  (paid  from  the  construction  budget  at  45%  of  the  total 
contribution)  and  operations,  including  upgrades,  spares,  decommissioning  and  deactivation 
costs  (paid  from  the  operations  budget  at  34%  share  of  the  total  contribution).  The  total 
construction budget from 2021 until the end of construction activities includes the estimated 
contribution to the Reserve Fund of the ITER Organization. 

Correspondingly as shown in Table 1, Fusion for Energy estimates that an additional EUR 2.2 
billion will be needed during the period 2021-2025 to cover the cost of the Euratom in-kind 
contributions  necessary  to  complete  the  critical  path  components  needed  to  achieve  First 
Plasma, as well as the cost of the initial stages of design and construction for the components 
under Euratom responsibility required for the Final Installation activities.  

Regarding  the  total  additional  Euratom  resources  needed  to  complete  construction  (i.e. 
required by both the ITER Organization and Fusion for Energy, see summary Tables 3 and 4), 
while  they  are  still  within  the  current  capped  budget  to  the  end  of  2020,  during  the  period 
2021-2025  additional  EUR  3.8  billion  are  required  to  First  Plasma.  Since  construction 
continues  to  some  extent  after  First  Plasma  with  the  Final  Installation  Activities,  additional 
resources required from the construction budget during the period 2026-3035 are of the order 
of EUR 1.5 billion (EUR 0.6 billion in cash and EUR 0.9 billion for the in-kind contribution).  

There are a number of conclusions that can be drawn from these figures. Firstly, the measures 
taken to restructure the schedule through the staged approach forecast that Fusion for Energy 
is on target to respecting the EUR 6.6 billion (up to 2020). This has been obtained by limiting 
the in-cash contribution to the ITER Organization, as well as postponing the procurement and 
installation of all components not essential for First Plasma.  

The  total  additional  Euratom  resources  needed  to  cover  fusion  for  Energy's  budget  for  both 
the  ITER  Organization  and  Fusion  for  Energy's  needs  from  2021  until  2035  are  currently 
estimated to be ~EUR 7 billion. 

A  complete  overview  of  the  estimated  share  of  the  Euratom  resources  needed  for  the  ITER 
project is given in particular in Table 4, where the contributions from the EU budget, France 
and Fusion for Energy Members are shown in detail. This table also shows the estimate of the 
EC average administration costs of the project, Fusion for Energy's administrative costs and 
the costs of ITER-related activities carried out by Fusion for Energy. 

VI. 

PRECONDITIONS FOR EURATOM'S CONTRIBUTION 

17 

 
Radical changes have been introduced in the last two years to reform the ITER project and put 
it back on track. Continued monitoring and additional tools will be needed both at the ITER 
Organization level and at European level with Fusion for Energy to ensure that the Euratom 
contribution to ITER is used in the framework of sound management practice and on the basis 
of  evident  project  progress.  The  revision  of  the  schedule  and  a  restructured  project 
management  working  to  maintain  improved  project  performance  are  major  conditions  that 
have been met. However, the following additional initiatives should be considered as the basis 
to ensure the future Euratom contribution to the project. 

  Regular project reviews of the ITER project 

Following the example of the independent review on the schedule proposed by the European 
Delegation  at  the  ITER  Council  of  November  2015  and  carried  out  by  the  ITER  Council 
Review Group, the ITER Council should introduce regular reviews focused on critical areas, 
such as project management, risk management, technical progress, safety, cost and schedule 
monitoring.  

On this basis, Euratom has worked with other delegations at the ITER Council of June 2016 
and ensured the introduction of regular reviews in the ITER Council plans. It was agreed that 
such focused additional reviews of ITER management performance and progress on selected 
issues  should  be  conducted  by  the  Management  Advisory  Committee,  with  involvement  of 
additional  independent  experts  to  strengthen  the  value  and  impact  of  such  reviews.  In 
November, the ITER Council concretised this agreement and decided to carry out regular six-
monthly in depth risk reviews focused on critical areas of the project, starting with the review 
of  risk  management  in  early  2017.  Such  reviews  represent  another  effective  way  of 
identifying  possible  shortcomings  and  risk  factors  and  addressing  them  before  they  bear 
negatively upon the project 

  Improved risk management 

The ITER Organization  must have in place a robust risk management system to ensure that 
relevant risk reduction and mitigation measures keep the First Plasma date of December 2025. 
For  this  reason,  Euratom  considers  that  it  is  important  for  the  ITER  Organization  to 
implement the recommendations on risk management of the ITER Council Review Group.  

Initiatives already adopted by the ITER Organization, such as a centralised approach for risk 
management instead of individually by the Domestic Agencies, need to be further developed. 
A central Risk Register, capturing all the risks (including in terms of potential additional cost) 
of  the  ITER  Organization  and  the  Domestic  Agencies  would  allow  more  transparency  and 
clarity  on  the  possible  impact  of  risks  should  they  materialise  and  better  control  of  the 
project's schedule and cost. 

At  the  same  time,  further  work  has  to  be  undertaken  in  Fusion  for  Energy  to  improve  the 
management of risk as regards specifically the European participation in the project. 

  Improved governance of the ITER Organization 

The governance of the ITER project is set up in the ITER Agreement. A formal revision of 
the provisions of the agreement is complicated and would probably bring not much benefit for 

18 

 
the project and would further compromise the First Plasma date by introducing unnecessary 
uncertainties  in  the  project  at  a  critical  stage  of  the  construction  phase.  Within  the  current 
framework,  there  is  some  margin  of  maneuver  to  further  streamline  the  decision-making 
process to make it more efficient.  

The  ITER  Council  needs  to  focus  on  the  most  strategic  decisions,  leaving  its  subsidiary 
bodies to deal with routine  and  administrative items, preparing  the decisions  of the Council 
and at the same time be empowered to adopt decisions in a more independent way on the day-
to-day work of the ITER Organization. To this end the review should look at how policies are 
established  (e.g.  principles,  rules  and  guidelines  to  reach  the  long-term  goals)  and  how 
supervision  tools  can  ensure  that  activities  are  on  schedule  to  meet  the  objectives  and 
performance targets. 

The  ITER  Council,  therefore,  also  decided  at  in  June  2016  to  establish  a  study  group  to 
review the governance of the ITER Organization by the ITER Council assisted At the ITER 
Council of November 2016 the study group presented some solutions for the rationalisation in 
the work of ITER Council subsidiary bodies but that further improvements in the efficiency of 
the ITER Council will be necessary. On this basis, the ITER Members endorsed most of the 
recommendations of the study group and requested the group to carry out a further analysis to 
merge  subsidiary  bodies  and  improve  preparations  of  ITER  Council  meetings  to  achieve 
further streamlining and efficiency in decision-making. The ITER Council in November 2016 
agreed to reduce the number of sub-committees and to eliminate overlaps. In 2017 the ITER 
Council  will  further  analyse  simplification  opportunities  with  the  objective  to  focus 
governance on delivery and strategic issues. 

  Enhanced oversight of Fusion for Energy  

The  Commission's  oversight  of  Fusion  for  Energy  relies  on  three  different  categories  of 
supervision tools: Governance Bodies (Governing Board and Committees), regular structured 
monitoring  (using  reporting  as  well  as  regular  audit  actions),  and  ad-hoc  supervisory  tools 
(mainly for tackling emergency situations). 

The Governing Board (of which Euratom is a member together with the EU Member States 
and Switzerland) and its subsidiary bodies (in some of which Euratom is also represented) are 
responsible for the overall supervision of Fusion for Energy. Compared to the other members 
of the Governing Board, Euratom has a different role as the largest contributor of the budget, 
the responsibilities to report to the European Council and to the European Parliament and the 
supervision of Fusion for Energy as a European Joint Undertaking, which means F4E has to 
follow  the  financial  and  staff  regulations  of  the  European  Commission  or  regulations 
specifically set up.  

This  specific  budgetary  and  institutional  role  of  the  European  Commission  on  behalf  of 
Euratom implies a particular responsibility of the Commission with respect to the supervision 
of Fusion for Energy, in spite of the formal limitation in terms of Euratom voting rights at the 

19 

 
Governing  Board.  The  current  Administrative  Agreement  between  the  Commission  and 
Fusion for Energy of specifies20 that: 

-  An  annual  activity  report  reporting  the  implementation  of  the  work  programme  of  the 
previous year shall be send to the Commission by the 15 of June of the following year. 

-  The  specialised  financial  irregularities  panel  set  up  by  the  Commission  according  to  the 
Financial Regulation shall exercise the same powers in respect of Fusion for Energy as it does 
in respect of Commission departments. 

- OLAF shall enjoy the same powers in respect of Fusion for Energy as it enjoys in respect of 
the Commission departments (Fusion for Energy statutes and Governing Board decisions). 

For  this  reason,  this  agreement  has  been  reviewed  and  updated  to  take  into  account  these 
specific needs which will allow the European Commission to fulfill completely its budgetary 
and  inter-institutional  role  as  well  as  any  additional  enhancements.  This  should  thus  ensure 
that  the  Commission  receives  early  specific  and  detailed  information  concerning  the 
administrative  and  financial  planning  of  the  Joint  Undertaking,  as  well  as  e.g.  regular 
reporting  on  the  difficulties  Fusion  for  Energy  faces  and  potential  mitigating  actions, 
information on the budget implementation with information on deviations from the planning. 

  Emphasis on cost containment 

The  Commission  has  repeatedly  urged  the  ITER  Organization  and  Fusion  for  Energy  to 
implement  cost-containment  measures  and  seek  further  savings.  While  progress  has  been 
made,  further  work  remains  to  be  done,  in  particular  to  improve  the  internal  control 
framework, integrated project management and reporting system in both organisations. Fusion 
for  Energy  has  prepared  a  comprehensive  strategy  to  deal  with  cost  claims,  which  will 
contribute to the mitigation of the risk of further cost increases, mainly from buildings, and 
will as  such form one  of  the  instruments of cost containment. A complete cost containment 
effort  will  also  have  to  include  a  further  improved  and  effective  assessment  of  current  and 
future  contracts,  reflecting  the  experience  gained  so  far  with  key  contracts,  such  as  for 
buildings  or  the  vacuum  vessel,  as  well  as  the  optimization  of  requirements  and 
manufacturing processes. 

20 Administrative Agreement between the Commission and Fusion for Energy (2008), Art. 19-21 

20 

 
                                                 
ANNEX: FINANCIAL TABLES COMPARING THE JUNE 2016 ITER COUNCIL PROPOSAL WITH THE 2010 BASELINE 

Table 1: annual profiles for the 2010 baseline in 2008 value, reconstructed using the ITER Overall Project Cost21 and the Fusion for Energy 2012 Resource Estimate Plan22. 

21 ITER Council-Ex/3.2 ITER Baseline document Overall Project Cost (OPC) (IDM UID 35PAPB  07 June 2011 v1.10). 
22 F4E(12)-GB26-09.7 Resource Estimate Plan 2012 (IDM UID 25YVDQ v1.0). 

21 

2008 value200720082009201020112012201320142015<201620162017201820192020sub-totalCash to IO 17.542.259.474.183.397.897.396.0103.9671.4100.892.673.537.512.8317contruction17.542.259.474.183.397.897.396.0103.9671.4100.892.673.537.512.8317operation0.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00Decommissioning/deactivation0.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00F4E in-kind103.7116.9214.8293.5319.71036.9742.6899.0596.04323.2180.8158.1137.677.139.4593F4E administration1.913.923.828.335.738.338.939.140.0260.040.038.435.531.35.8151F4E other activities0.04.518.79.517.52.817.023.016.9109.921.433.943.450.125.4174Total 2010 Baseline123.1177.5316.7405.4456.21175.8895.81057.1756.85364.4343.1323.0290.1196.083.412362008 value20212022202320242025sub-total2026202720282029203020312032203320342035sub-total2007-20352021-2035Cash to IO 110.7109.5107.4105.5103.2536102.3102.3102.3102.3102.3102.3102.3143.7143.7143.711472672.21683.5contruction8.47.25.13.20.9250.00.00.00.00.00.00.00.00.00.001013.524.8operation95.895.895.895.895.847995.895.895.895.895.895.895.895.895.895.89581437.01437.0Decommissioning/deactivation6.56.56.56.56.5336.56.56.56.56.56.56.547.947.947.9189221.7221.7F4E in-kind000000000000000004916.30.0F4E administration15151515157515151515151515151515150636.0225.0F4E other activities00000000000000000284.00.0Total 2010 Baseline125.7124.5122.4120.5118.2611117.3117.3117.3117.3117.3117.3117.3158.7158.7158.712978508.51908.5TOTALS 
 
 
 
 
 
 
                                                 
Table 2: Total estimated Euratom contribution (through Fusion for Energy's budget) based on the updated Project Plan and Resources Estimates approved ad referendum at 
ITER Council November 2016 and on Fusion for Energy's estimates for the completion of the construction work presented at the December 2016 Governing Board meeting 
(in EUR million 2008 values). Here and in Table 3 to note: 

  A standard inflation rate of 2% has been assumed throughout, with the exception of the estimate of Euratom's in-kind contribution, where 2.6% has been used to 

better take into account the higher costs of contracts by Fusion for Energy. 

  The cash to the ITER Organization (IO) includes the contribution to the Reserve Fund, while operations, upgrades, spares, decommissioning and deactivation costs 

are charged to the operations budget.  

  A best estimate of Fusion for Energy's revenue from the ITER Organization Reserve Fund is also included.  
  Fusion for Energy's administration costs after 2020 are indicated as an upper limit. 
 

"F4E other activities" include TBM, DEMO, DONES, JT60-SA operation and other minor horizontal activities. 

22 

2008 values20142015201620172018201920202014-2020202120222023202420252021-2025Cash to IO7165891601651852279612352312302361851116construction7165891601651852279612352312302361391070operation0000000000004646Upgrades&operational spares00000000000000Decommissioning/deactivation00000000000000F4E in-kind44523729834531424418220654884594594403602206Estimated revenue from RF00-37-23-9-18-24-110-19-19-19-19-14-90F4E administration393941414244462925050505050250F4E other activities8201189100665731795050267F4E Cash to Japan000331003408500085Total563361402534552465431330781183779975763138342008 values202620272026-2027202820292030203120322033203420352028-20352021-2035Cash to IO24123047122614816513211811812811611512738construction128130258115416628882762991627operations73601337167596470706170531710Upgrades&operational spares2525512525252525252525202253Decommissioning/deactivation1515301515151515151515118148F4E in-kind22429652017213695700004103136Estimated revenue from RF-17-15-32-15-15-137F4E administration50501005050505050505050400750F4E other activities566412034918321040427F4E Cash to Japan00000000000085Total5546251179436338319207171170179166198669992007-2013ITERF4E3201ITERF4E 
 
 
 
 
 
Table 3: As in table 2, but all in EUR million in current values. 

23 

current values20142015201620172018201920202014-2020202120222023202420252021-2025Cash to IO807510419120123028811683043053093242591501construction807510419120123028811683043053093241951436operation0000000000006464Upgrades&operational spares00000000000000Decommissioning/deactivation00000000000000F4E in-kind51928436643540632424825816816576756635573234Estimated revenue from RF00-43-26-11-21-28-129-25-25-25-25-18-116F4E administration444548495155933846566676970337F4E other activities9231410121308080441167577393F4E Cash to Japan00044000440122000122Total652426488662699600600412711051170114211079455469current values202620272026-2027202820292030203120322033203420352028-20352021-2035Cash to IO34432867332321123618916916918316616443817construction18318636816459944011113994272232operation10486190101968491100100871007591013Upgrades&operational spares3636723636363636363636289361Decommissioning/deactivation2121422121212121212121169211F4E in-kind3564828382872331671300007004772Estimated revenue from RF-24-21-46-21-21-184F4E administration717314474767779808284856381119F4E other activities89104193571632642071657Cash to Japan000000000000122Total836966180266852749631225525426825130321030335562007-2013ITERF4EITERF4E 
 
 
 
 
 
 
Table 4: Overview of the estimated Euratom contribution (from the EU budget, France as Host State and Fusion for Energy Members) both in 2008 and current values (EUR 
billion). F4E Members include the EU Member States and Switzerland. The differences in the amounts for the period 2007-2013 and 2014-2020 in Tables 3 and 4 can be 
clarified as follows. The F4E total revenues in commitments appropriations during the period 2007-2013 could not be used in full because of the delays of the project. In view 
of the specificity of the ITER project, the F4E Financial Regulation foresees in Article 14.1 that ‘Appropriations which have not been used at the end of the financial year for 
which they were entered shall be cancelled. Given the needs of the Joint Undertaking, the cancelled appropriations may be entered in the estimate of revenue and expenditure 
of the following financial years’. While Table 4 refers to the revenue as occurred for the periods 2007-2013, Table 3 (and table 2 in the Communication) refers to the occurred 
expenditures  in  commitment  appropriations  for  the  period  2007-2013,  which  resulted  to  be  lower  than  the  received  revenue.  This  difference  has  remained  available  to 
compensate the higher expenditures in the subsequent period 2014-2023 through the possibility to re-introduce unused appropriation of the previous year. 

Euratom budget 
2008 value 

Up to the end of the current 
MFF period  

To First 
Plasma 

From First Plasma to DT 

2007-2013 

2014-2020 

2021-2025 

2026-2027 

2028-2035 

Total after 2020 

EU budget 

France  

F4E Members  

Totals 

2.7323 

0.45 

0.02 

3.2 

2.58 

0.73 

0.03 

3.34 

3.16 

0.7 

0.02 

3.88 

1.00 

0.19 

0.01 

1.2 

1.72 

0.3 

0.04 

2.06 

5.88 

1.19 

0.07 

7.14 

Euratom budget 
current value 

Up to the end of the current 
MFF period  

To First 
Plasma 

From First Plasma to DT 

2007-2013 

2014-2020 

2021-2025 

2026-2027 

2028-2035 

Total23Error! Bookmark 
not defined. after 
2020 

EU budget 

France  

F4E Members 

Totals23 

3.3624 

0.52 

0.02 

3.9 

2.96 

0.84 

0.03 

3.8 

4.56 

0.95 

0.03 

5.5 

1.51 

0.3 

0.01 

1.8 

2.58 

0.5 

0.06 

3.1 

8.6 

1.7 

0.1 

10.4 

23 Amounts rounded off to one decimal 
24 The EU budget for 2007-2013 is higher than that derived from currently known executed figures because the actual commitment per year profile is slightly different for years until 2020 due to 
the “anticipated” commitment of the cash contribution. For completeness, it also contains EUR 44 million (2008 value) of preparation costs spent before 2007 

24