Nuclear Clean-Up Bill Jumps to $1 Trillion

 

Aug 23 - Sunday Business; London (UK)

THE UK's nuclear clean-up bill - which jumped to Pounds 56bn (E81bn, $100bn) this month - is 6% of a mind-boggling $1 trillion that needs to be spent globally up until 2050, the International Atomic Energy Authority (IAEA) says.

This will prove extraordinarily costly for taxpayers but a bonanza for the nascent nuclear contracting industry. The biggest winners are likely to be US companies but others stand a chance, too.

The next five years, between 2006 and 2010, will be the busiest period, with even more clean-up contracts expected than in 2031- 2035 and 2036-2040, when the bulk of the decommissioning of the world's nuclear power plants to take place. The next five years will see double the amount of contracts coming up compared with the past five years.

Bob Churchill, managing director of Amec's nuclear business, told The Business: "A lot of people thought nuclear was a dying industry, but what we are seeing at the moment is the re-birth of a young industry that's been rallying the old skills and focusing its joint efforts on clean up."

US contractors such as Bechtel, Lockheed Martin, KBR, Fluor, Washington Group and CH2M Hill lead the field. The US, thanks to its cold war nuclear programme, will have at least $400bn in decommissioning contracts. Churchill reckons that could top $1 trillion. Churchill admits: "US firms certainly have an edge over the UK companies because they've been operating under a contracting system for 10 years."

The former Soviet Union comes a close second as the biggest market after the US. The IAEA estimates the mess left by Russia and China's respective nuclear programmes at $200bn each, but again, this looks an underestimate.

Even here, US firms have an advantage. After the collapse of the Soviet Union, the US Nunn-Lugar act granted a $400m annual budget to decommissioning Soviet nuclear weapons, which since 1991 has fuelled the decommissioning of 6,564 nuclear warheads as well as 28 nuclear submarines. KBR, Bechtel and Washington Group have done most of the work.

Ukraine, Belarus and Kazkahstan are now free from nuclear weapons, but in Russia there's still considerable work to do.

The notorious Andreevna Bay in Russia's Arctic Murmansk Region still has more than 100 decaying nuclear submarines, which constitute one of the world's most dangerous environmental hazards.

Still more immediate is Ukraine's Chernobyl reactor. The concrete coffin hastily constructed to contain it after the 1985 accident is unstable. Given that only about 5% of the fuel escaped 20 years ago, a collapse could cause greater damage than the original disaster. This month, the Ukrainian government is to announce whether the contract to build a $1bn shield to protect the reactor will go to a Franco-German consortium led by Bouyges, or to a US one led by CH2M Hill.

Alongside the main Chernobyl contract, there is a stream of smaller ones. BNG has done consultancy work on Chernobyl under a Department of Trade and Industry contract to ensure all former Soviet countries reach international safety standards.

For now, politics can still clinch deals. US firms tend to win US- funded contracts, wherever they are in the world.

The UK's liabilities are a fraction of the global industry. But, with the clean-up work to be freely contracted out, starting next year, it's bound to attract bids from all the big players.

Once other countries follow a similar model, the leaders will be the companies that develop their own specialist technologies. UK firms are working to improve their offering.