Licensing and Project Development of New Nuclear Plants

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This report is based on the results of a survey of World Nuclear Association (WNA) members. It explores the relationship between licensing and regulatory systems on the one hand and important commercial project decisions on the other. While many documents on licensing procedures exist, the report brings some new aspects into the international discussion on new nuclear build.

In the introduction, the report identifies different categories of new build countries and gives an overview of the main commercial project decisions, such as technology selection, financial investment decision, and contracting or procurement. These project milestones then constitute the chapters of the report.

The results of the survey and the subsequent discussions among WNA members give a comprehensive picture of the relationship between licensing processes and commercial project decisions. This picture is full of variety as members’ views and experience depend on the regulatory system as well as the commercial and political environment into which each project is set. For example, in countries with a competitive market and private project developers, there is a strong tendency to reduce risk as far
as possible before entering into irreversible commitments. This leads to taking the financial investment decision (FID) and concluding binding full-scope contracts as late as possible in the project timeline. Other countries, with state-owned industries and government-led projects, put less emphasis on these issues.

It is interesting to note that respondents generally felt that predictability and stability of a regulatory system are more critical to making commercial decisions than the adherence to any specific regulatory system. Respondents generally preferred the regulatory system with which they were familiar, and no consensus emerged on any one system.

Nevertheless, some key conclusions and recommendations can be drawn out of the survey results. The most important are:

  • The licensing system must be predictable and stable. Pre-licensing of a design or a site is seen as an important feature of a regulatory system, reducing the risk of licensing and making the outcome of a licensing process more predictable. The adherence, as far as possible, of all parties to a pre-agreed timescale is crucial.
  • Vendor selection (if applicable) should occur as early in the process as possible, ideally before the construction licence application.
  • Particularly in a market-driven environment, contracting consists of a series of steps in which the partners gradually enter commitments. Increased commitment is dependent on the progressive reduction of licensing risk as the licensing procedure goes forward. In less market-driven environments, the survey shows that the ‘classic’ approach of concluding an early engineering-procurement-construction (EPC) contract covering licensing and construction is still in use. In any case, regulators need to be aware of these circumstances.
  • A reasonable level of design maturity should be reached before applying for a licence for a first-of-a-kind (FOAK) project – and, by the time of first concrete, a high proportion of the detailed design should have been completed. The same goes for first-in-a-country (FIAC) projects – a notion introduced in this report.
  • A clear and predictable licensing regime makes financing for nuclear power plants easier.
  • A formally binding positive decision about a nuclear plant project taken by the government (and possibly parliament) at the outset would remove political considerations from the licensing process, which could then focus on safety issues.
  • Design documentation and manufacturing documentation needs to be efficiently and effectively reviewed between all parties involved. Enhanced international standardization and greater cooperation of regulators may be a means to reduce some of the difficulties and to make component manufacturing more predictable.
  • On a more general level, international harmonization of safety requirements and standardization of reactor designs could greatly facilitate licensing.Particularly in the case of a FIAC project, implementing a standardized design and using licensing results already obtained in another country would be much
    easier than starting from scratch. However, there is still a great deal of work to do before this can be achieved.