ITER project jeopardised by European indecision

June 9, 2010 | 00:00

ITER project jeopardised by European indecision

The international economic crisis has a new victim in its sights: the giant international ITER project, an experimental thermonuclear fusion reactor which could help project partners solve their potential energy shortage problems by the end of the century. The estimated costs for the first components to build the reactor, to be paid out of the EU’s dedicated research programme, have soared from €2.7 to €6.6 billion. ITER’s international partners are waiting for a clear signal of Europe’s commitment at the upcoming ITER Council meeting in Shanghai on June 17, but there is as yet no agreement within the EU how to cover the missing €3.92 billion. The Commisson has warned that pulling out now might cost the EU €4.5 billion.

The issue was made public on May 4, 2010, when the European Commission published two reports setting out the state of play and asking EU research ministers and the European Parliament ‘to provide the additional resources necessary for the complete period of ITER’s construction and to take a decision in principle on the provision of the necessary funding’. How is it possible that the Commission only put out details of such a huge political and budgetary decision just a short time before the Shanghai meeting? After all, although the huge increase in the budget needed for the construction of ITER was only made public for the first time in the May 4 reports, the problem has been a long time in the making.

As soon as the ITER organisation was set up in 2007, its member countries tasked its management to review all the documentation with regard to the scope, schedule and cost of the project, starting with the information that had been provided by the partners back in 2001. Two panels of independent experts were set up to assess the updated resource estimates envisaged for the ITER, one by the ITER Council and the other by the Governing Board of the European agency managing EU’s contribution to ITER, called ‘Fusion For Energy’ organisation (F4E). They came to similar results. As the European Commission now admits, 2001 cost estimates were ‘very aggressive, i.e. set up with a low degree of confidence’, in other words, ‘rough and tight’.

More than half of the difference between the 2001 and the 2008 estimates could be attributed to so-called ‘internal factors’ specific to the project, such as design changes. In 2001, the design was general and not sufficiently detailed to launch calls for tender from industry, according to the Commission. Moreover, the need for additional and more complex technical components to increase the likelihood of ITER being a success, had not been built into the cost estimates back in 2001. On top of that, more funding than was anticipated is required for inspection and testing to comply with the quality assurance requirements for a nuclear installation and ‘the millions of parts to be assembled’.

Different sources close to the dossier have different takes on the need for changes. Some consider that the European Commission’s introduction of contingencies and the inclusion of new features changed the whole picture and made the costs much higher. Others think that the demands from the ITER organisation, and especially the time schedule, automatically made the cost of buildings and other big components higher. The EU has to pay for this because in the original deal it agreed to supply the components, regardless of the costs.

The rest of the difference is due to external factors ‘that would affect any similar construction project’. These include the fact that the costs of the materials and of the construction itself have risen much faster than average inflation rates. Organisational factors have also contributed to the difficulties. Managing interfaces between seven partners (after the US, South Korea, China and India joined) has proved much more complex than between the three partners foreseen in 2001 (the EU, Japan and Russia). And then there have been the start-up costs of setting up autonomous international organisations from scratch.

Lack of transparency

European research ministers expressed their irritation that they only received the European Commission’s final figures on May 4, 2010. They are now under considerable pressure to reach a multi-billion euro decision before mid-June. However, they cannot claim to have been completely taken by surprise. The higher costs were identified as early as 2007, although it took a very long time before ministers saw them. Were there some information transmission problems within the national administrations? A Commission spokesman told EER that ‘Member States have throughout been informed in real time of developing cost estimates through their representation in F4E. They have 75 out of 80 votes on the management board, the other 5 being for the Commission.’

Worried by the issue of soaring costs, the European Commission in 2008 set up an informal ‘political group’ made up of the major industrial and scientific leaders of the main European countries involved (with a German representative heading the group). This group was to assess the situation and propose a strategy to the EU research ministers. They met several times in Brussels but nothing was officially published. ‘These were informal meetings of senior government officials – there is no verbatim,’ the European Commission tells EER. The then EU Commissioner for Research Janez Potocnik (now the EU’s Commissioner for the Environment) decided not to follow up on these meetings.

The European Commission officially informed research ministers, for the first time, at a meeting in early December 2008, that ‘a very substantial increase from the initial Euratom contribution to the construction phase of ITER can be expected’. No figures were communicated at the time because they had not yet been ‘precisely defined’. Instead, the wording of the Commission’s note stressed the need to ‘streamline project execution and contain costs’. European ministers did not seem to be keen to react to the fact that ‘the peak for the Euratom contribution is expected to occur between 2010 and 2014’. They should have been fully aware that the Euratom budget had already been decided a long time ago and that a ‘substantial increase of costs’ would mean that Euratom would be short of money. Instead, they merely ‘encouraged the Commission to continue working with the other partners to balance the project's scientific ambitions with cost control’.

In 2009, the pace of internal work at the European ITER agency and within national expert groups of the Council of EU Ministers suddenly moved up a gear. In May 2009, the European Commission set out a number of so-called ‘boundary conditions’, i.e. a credible cost assessment and cost containment policies, a realistic timetable and sound management of the project at all levels.

The buildings were said to be a major factor in the increase of ITER total cost. Member states and the European Commission therefore launched, in September 2009, an independent assessment of the cost estimates of the buildings. The members of the assessment group were nominated by the EU member states (through the Council of EU Ministers) and the European Commission. Its conclusions were transmitted to the EU member states on January 20, 2010. They were fully in line with the ITER organisation’s own assessments of the high building costs. The existence of this report was made public as were its main conclusions. But that was it: ‘due to the potential commercial sensitivity of the detailed information on costs (given for example the fact that procurement competitions will take place aimed at securing best value) the content was security classified as “limited”,’ the European commission tells EER.

Political timebomb

At their meeting on September 25, 2009, EU research ministers were given a short briefing on the action taken in 2009, including cost containment measures and a management assessment of the European ITER agency, but still no clear estimate of the increase in costs.

Meanwhile, foreign affairs ministers invited the Commission to ‘explore possibilities for providing the increased funding needed’. These “possibilities” would ultimately wind up in the reports of May 4, 2010, which will be discussed below.

Then came a clash between the EU and its partners at the ITER Council meeting on November 18-19. The EU position was to tell its partners that the project had to be delayed by a year or so in order to meet a ‘baseline’ (scope, schedule and cost) acceptable for the EU. As the partners did not agree, a decision was postponed until mid-June 2010 – i.e. until the upcoming meeting in Shanghai on 17 June.

Internally, heads had to roll and so it was that the first Director of the European ITER agency, the Frenchman Didier Gambier, was forced to resign and come back to Brussels. He was replaced, on January 11, 2010, by Frank Briscoe. The new temporary Director, who was Operations Director at the UK’s fusion centre at Culham in Oxfordshire, knows the subject well. He had earlier on led one of the two initial  independent assessments of the ITER organisation’s cost estimates, and was a candidate to lead F4E.

When Máire Geoghegan-Quinn took up her post as the EU’s new Commissioner for Research in mid-February, she inherited this political timebomb from her predecessor. She finally unveiled the final cost figures on May 4, three weeks ahead of the last meeting of EU research ministers before the mid-June ITER Council meeting in Shanghai. At this meeting, the EU is expected by its partners to give a clear signal about its commitment to keep to the schedule and to pay for additional costs.

Economic stimulus

The European Commission says that there are only two possible options: either raise the EU’s budget and/or obtain a direct contribution from all EU member states and Switzerland. It argues that it is ‘very conscious of the difficulties in public finances’ but points out that ‘all member states have endorsed the Europe 2020 principle that the best way to ensure sustainable recovery is by maintaining and increasing investment in the technology of the future’. Thus, given the potential economic, environmental and geopolitical benefits of the ITER project, ‘the investment required is well worth making. In addition, the project is a significant economic stimulus in the shorter-term’, argues the Commission.

The construction site at Cadarache. If all goes well, construction will begin in 2010 on buildings and facilities. Photo: Agence ITER France

Another option, consisting of a loan from the European Investment Bank (EIB), was rejected from the start by the Commission on the grounds that there is no source of income from which the loan could be paid back. The idea of redistributing EU research funds from other areas was also rejected by the Commission because of the negative effects that it would likely have on other EU priorities.

The initial reaction from the member states was the exact opposite of what the Commission expected. European ministers rejected the options favoured by the Commission and favoured the options rejected by the Commission. Spain, the current holder of the presidency of the EU Council of Ministers, decided to create a joint task force of experts to solve the problem. Its first meeting on June 3 was held in a much more friendly and even ‘constructive’ atmosphere. The joint task force has raised the idea of postponing the ITER meeting of June 17 to sometime in July.

In the meantime, several trade associations in Brussels are up in arms about the prospect of large new funds being diverted to ITER. Instead of channelling money from other areas into this very long term project, they argue that it should be scrapped so that much shorter-term energy technologies can be pursued. The European Renewable Energy Council (EREC) said during a meeting on European strategic research priorities in Madrid on June 3, that ‘any bail-out of ITER using this option is an opportunity to perform a major mid-term overhaul of the EU budget that would find new money for renewable energy technologies’.

Feeding ITER’s budget from other budgets therefore seems almost impossible to put into practice, because it would upset the delicate balance between all the budgets. They would then all have to be discussed again, opening up a Pandora’s box of claims. Moreover, the European Parliament must be a part of the process as it has a say on the EU’s budget, unless the solution only deals with Euratom’s budget, which is the sole competence of EU member states. As for the EIB option, this institution was not even invited to take part in the discussion within the joint task force.

A lot at stake

So what is to be done? France, the host country of ITER, has stated that it will ‘honour its commitments’. But what are these commitments? During the negotiations in 2001, it agreed that it would pay a fifth of the EU’s share as estimated in 2001, i.e. €536 million. Now, however, the European Commission expects France to pay €1.321 billion, i.e. €785 million more than initially foreseen.

Germany has reportedly refused to open up its wallet to plug yet another European financial gap and has even talked about downsizing the project. This is one option, but it would require the agreement of the EU’s ITER partners. A key difficulty here is that, back in 2001, scientists said that the ITER project was the minimum acceptable size to achieve its scientific goals.

Meanwhile, at the request of a handful of member states, the European Commission has examined the impacts of the worst-case option, i.e. the EU pulling out from ITER. The only possibility for this would be ‘by agreement of all Parties’, says article 26 of the ITER Agreement. The price of such an option is set at €4.5 bn, of which €3.1 bn would go to reimbursment of signed procurement arrangements. But this estimate does not include the likely compensations that may be claimed by other Parties, says the Commission in an internal note, adding that Heads of States would have to be involved into such negotiations. France would be entitled to claim compensation for all the infrastructure it has set up (international school, roads, paths and bridges, including adaptation of the ITER site).

Then there would also be impacts on a broader political field, such as abandonning the option of fusion as an attainable energy source and a risk of tension with other ITER parties as far as scientific cooperation is concerned. ‘The French public authorities could be faced with high domestic criticism having pushed for such a nuclear project’, the Commission adds.

The European Parliament has not spoken out yet on the issue. Claude Turmes, Vice-President of the Greens group in the Parliament says ITER should be ‘stopped now, because it will never be as cheap as now to get out of it.’ Others in the European Parliament say that the EU could simply call for the beginning of the construction phase to be postponed by two years. This would mean that budgetary negotiations about refinancing ITER could take place during scheduled negotiations on the EU budget as from 2014, i.e. without involving specific additional procedures. But such a delay runs into other obvious difficulties.

The task force set up by the Spanish presidency is due to meet on June 8, 21 and 25 with a view to reaching an agreement to be formally agreed at the Ministerial level in July. Thus the fate of ITER might not yet be decided at the Council meeting in Shanghai on 16-17 June, but perhaps at an extraordinary meeting sometime in late July.

There is a lot at stake for industry, as the Commission estimates that about three quarters of the EU’s contribution to ITER will lead to contracts with high-technology industrial players in Europe. ‘The timely fulfilment of these contracts will involve the transfer to European industry of major fusion-specific technologies and know-how built up over 50 years in the European fusion programme,’ the Commission adds. It will also attract many talented young scientists and engineers to Europe.

The EU is at a crossroads with regard to its participation in the ITER international project. There is no doubt that the EU’s decision-making process and budgetary procedures are not suited to such an international long-term research project and its inevitable uncertainties. They will need to be changed in order to guarantee Europe’s stable commitment in ITER. Meanwhile, some of the EU’s partners are reported to be quite irritated by the EU’s attitude. As the Japanese Mission to the EU told EER, partners ‘just expect the EU as the host country of ITER to address the issue in a responsible manner’. The EU’s credibility on the international scientific scene is at stake. Its credibility has not only been undermined by the economic and financial crisis but also by a lack of transparency and a lack of political courage.

Nuclear fusion

The principle of thermonuclear fusion is to reproduce on earth what occurs on the sun: the generation of energy when small atoms (here hydrogen ones) fuse together. So far, 40 years of research has demonstrated that it is possible but scientists need a bigger tool to make it feasible on a bigger scale and to pave the way towards a demonstration reactor by the middle of the 21st century. As ITER is very expensive (an estimated €15 billion euro so far), international cooperation has proved indispensable.
After five years of negotiations, seven partners representing more than half of the global population (the European Union, the US, China, Japan, South Korea, Russia and India) decided, in November 2006, to create an international organisation to pilot the project. As part of a 35-year agreement, the partners have to deliver most of their slice of the project in kind. As the host of the reactor at Cadarache (France), the EU’s share amounts to 5/11th of the project (45.46%), with each of the six other partners bearing 1/11th (9.09%) of the cost during the 10-year construction phase.
The European contribution to ITER, which comes from a share of Euratom’s research budget, is entirely managed through a European agency called Fusion for Energy (F4E). F4E is based in Barcelona and currently employs 200 people. Although not an EU member state, Switzerland takes part in the European agency.

To read an in-depth, first-hand report EER published about ITER in January 2008, click here.


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