Nuclear Energy Development in Lithuania

MINISTRY OF ENERGY OF THE REPUBLIC OF LITHUANIA Nuclear Energy Development in Lithuania 10 February 2016 Gediminas Karalius Electricity Sector Division IAEA Technical Meeting TM-52851 Establishing a Strategic Partnership and Contract Model for Expansion/Introduction of NPP Hosted by Ministry of Economics of Poland and PGE Warsaw, Poland, 10-12 February 2016

Contents 1. Existing and planned nuclear installations 2. Legal and Institutional System in Lithuania 3. Legal Reform. Improvements of Regulatory Framework 4. Legal Reform. Improvements of Investment Framework 5. Activities in HR development 2

1. Existing and planned nuclear installations 3

Existing and planned nuclear installations Existing Ignalina NPP (under decommissioning): 2 RBMK-1500 units (2x1500MW) 1983-2004 and 1987-2009 Spent nuclear fuel storage facility Liquid radioactive waste management facilities Cementation and interim storage of solidified (cemented) waste Maišiagalal radioactive waste storage facility Under construction or planned New spent nuclear fuel storage facility New solid radioactive waste treatment and storage facilities Storage facility and a repository for very low activity waste Repository for low and intermediate activity radioactive waste Visaginas New Nuclear Power Plant Nuclear facilities at Ignalina NPP site (existing, planned, or under construction) New Visaginas NPP Maišiagala radioactive waste storage 4

Operation Basics Ignalina NPP Largest and most advanced RBMK design (also with later safety upgrading) Intended to serve NW region of Soviet Union Supplied 70-88% of LT national demand Closed at around mid-life (as a condition for LT accession to EU) Plant type Number of units Power per unit Staff RBMK-1500 2 (of 4 planned) 1500 MW 5600 during operation Unit 1 Unit 2 First operation Dec 1983 Aug 1987 Final Closure Dec 2004 Dec 2009 Power generation 137 TWh 170 TWh Construction Operation Decommissioning 1974-1987 1983-2009 2010-2038 5

New Visaginas NPP Visaginas new nuclear power plant is a strategically important Project for the Baltic region Rationale of Visaginas NPP Project Energy security Diversification of region s energy mix and market competitivenes Green Agenda and region s environmental goals Visaginas NPP project development overview Main pre-development works completed Hitachi selected as the Strategic Investor with ABWR 1350 MW reactor (2011); Favorable opinion by the European Commission received (2012); Legal environment for project development adjusted Advisory non-binding referendum held (2012) Sites approved by VATESI (2014) Post-referendum activities: Eonomic competitiveness of the project improved Principal national agreement to develop Visaginas NPP project by main Parliamentary parties is reached Discussions with the Regional Partners and Strategic Investor continued National energy startegy review in progress 6

Visaginas NPP project timeline Current Preparation Pre-construction Construction Operation Decomm 2007-2015 ~ 3 yers ~ 5 years 60 years 10 years LT Contractor (Hitachi-GE) Preparatory activities Technical preparatory activities including EIAR Organization for direct negotiations and selection of strategic investor Regulations and licensing, appropriate legal and investment environments Project notification to EC Site evaluation Special planning procedures for main haul road completed Pre-construction period! Establishment of the Project company: Shareholders, Concession, EPC agreements Detailed plant design activities Preparatory activities for equipment ordering necessary for reactor construction PSAR preparation and coordination; License for construction and operation Project company Operation and maintenance contractor Construction period Main haul road construction and finishing the route construction NPP Construction activities Systems testing, adjustments, testing, FSAR preparation and adjustment NPP operation New nuclear power plant operation Plant improvements Decommissioning Decommissioning activities Utilization of the decommissioning fund 7

2. Legal and Institutional System in Lithuania 8

Main legal acts for nuclear In accordance with fundamentals and requirements set forth in the international Conventions, EU directives as well as in IAEA Safety Standards, national legal infrastructure was established and is further enhanced International conventions: Nuclear Safety Convention (ratified in 1995) and Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management (ratified in 2003) EU legislation: Directive on Nuclear Safety; Directive on Safe management of Spent Fuel and Radioactive Waste; Directive on Basic Safety Standards Laws, Governmental decisions: Nuclear energy law; Nuclear safety law; Radioactive waste management law; Radiation Protection law; Law on [new] Nuclear Power Plant; Regulations for Licensing of Nuclear Power Related Activities, other VATESI requirements and rules (more then 50 valid documents) Standards: ASME, KTA, etc. License holder s technical normative documentation 9

Institutional Framework for Nuclear Energy President of the Republic of Lithuania Parliament of the Republic of Lithuania State Security Department State Nuclear Power Safety Inspectorate (VATESI) Legend UTILITY INVOLVED MINISTRY INVOLVED REGULATORY INSTITUTION INVOLVED INSTITUTION MAIN R&D INSTITUTIONS Ministry of Energy Shareholder Ignalina NPP Ministry of Finance Shareholder Lietuvos energija, UAB Shareholder UAB VAE SPB Government of the Republic of Lithuania Ministry of Environment State Territorial Planning and Construction Inspection Environment Protection Agency Ministry of Health Radiation Protection Centre Ministry of National Defense Fire and Rescue Department Ministry of Interior Ministry of Social Security and Labor Labor Inspection State Border Guard Service Visaginas Municipality INTERESTED MUNICIPALIY Vilnius Gediminas Technical University Kaunas University of Technology Vilnius University Lithuanian Energy Institute Centre for Physical Sciences and Technology 10

Nuclear regulatory body (VATESI) State Nuclear Power Safety Inspectorate (VATESI) from 1991 Mandate of VATESI (the main issues): State regulation and supervision of nuclear safety, radiation safety, physical protection and safeguards in Nuclear Facilities State control of safeguards implementation State regulation and supervision of physical protection nuclear material Performs international cooperation in all of the competence areas Regulatory duties of VATESI: Preparation of regulations Review and assessment of information relevant to safety Issuance of licenses and permits, approval of documents Inspection of facilities and consultation Enforcement Oversight of non-proliferation Structure of VATESI State Nuclear Power Safety Inspectorate (VATESI) was established in 1991 and since then together with the whole nuclear power infrastructure of Lithuania has succesfully passed a long way of development and gaining experience 11

3. Legal Reform. Improvements of Legal and Regulatory Framework 12

Improvements in Legal and Regulatory regime With regard to the development of new Visaginas NPP project and preparation for its construction legal and regulatory reform, in line with the International and EU requirements, was performed through years 209-2011 Main aims of such reforms were to: Adjust regulation and nuclear safety provisions in line with latest International and EU requirements and best practices Adjust the existing legal and regulatory regime to the actual needs of the new Visaginas NPP project and Ignalina NPP decommissioning Establish effective and transparent licensing process Make authorisation, regulation and supervision more flexible, efficient, transparent and streamlined Enhance the independence of the regulator Specify and clearify the functions of responsible institutions in order to avoid duplication of functions Set up more effective decision making principles Result: Set of 12 Laws approved by the Parliament in June 2011 and followd by ammendments and introduction of up tio70 lower level legal acts 13

Legal framework improvements Law on Nuclear Energy (ammended): establishes the basis for a stronger and independent nuclear regulatory authority Law on Nuclear Safety (New ): strengthened regulatory system of nuclear safety more detailed and clear rules of the state regulation and supervision of nuclear safety in nuclear installations explicitly defined system of licensing and forms of authorization, enforcement measures, etc Law on Radiation Protection (ammended) clear separation of functions of the Radiation Protection Centre and the State Nuclear Power Safety Inspectorate in the field of radiation protection Law on Radioactive waste management (ammended) change of institutions competences and responsibilities in state regulation of radioactive waste management International conventions Law on Nuclear Safety (newly introduced) Law on Nuclear Energy Law on Radiation Protection IAEA requirements Law on Radioactive Waste Management Set of Regulatory Requirements General requirements EU legal acts Detailed requirements 14

Regulatory framework improvements Independence of Nuclear regulatory body (VATESI) Appropriate Position of VATESI in State s Governmental Framework VATESI reports to President and Government (Law on Nuclear Energy, Article 21) Head of VATESI appointed by President in accordance with offer of Prime Minister Promotion and regulatory functions separated (Law on Nuclear Energy) Promotion functions Ministry of Energy Nuclear safety regulation functions VATESI Regulatory decisions are based on established nuclear safety requirements or other good practice (IAEA, WENRA etc.) Technically competent staff 15

Regulatory framework improvements (cont.) Redistribution of functions between the regulatory authorities State Nuclear Power Safety Inspectorate (VATESI) (Nuclear and Radiation Safety) Radiation Protection Centre (RSC) (Radiation Safety) Nuclear Facilities Non-Nuclear Facilities Environmental Protection Agency Environment radiological monitoring functions remain 16

Two options Regulatory framework improvements (cont.) Authorisation process for construction and operation CONSTRUCTION LICENSE OPERATION LICENSE Construction Commissioning Operation Construction license. PSAR Combined license. PSAR Approval of Commissioning Program Operation license. USAR Permit for the first transportation of the NF into the site. USAR Permit for the first launch of the reactor. USAR Permit for commercial operation. Final SAR Permits to resume operation after shut down Construction Commissioning Operation COMBINED (CONSTRUCTION AND OPERATION) LICENSE 17

Licensing Roadmap for new NPP Commercial Operation Periodical Safety Review VATESI Consists of number of permitting stages. Permits issued by VATESI. Includes preparation of USAR FSAR PERMIT for Commercial Operation VATESI VATESI Preparation of special conditions for design by authorities to applicant; agreement by applicant of design with them in accordance with Construction Law VATESI (taking into account conclusions of Geological Survey, Fire Rescue Department, Ministry of Health, Hydrometeorological Service and Civil Aviation administration) Preparation of Design and PSAR Government Decision on initiation of construction Construction and Operation LICENCE PSAR Construction Government Commissioning VATESI Regulatory oversight by VATESI and State Territorial Planning and Construction Inspectorate under MoE in terms of structures (buildings); Supervision by VATESI in terms of systems and components and other important to safety issues VATESI, if Permit for Construction by State Territorial Planning and Construction Inspectorate under MoE is issued and valid Nuclear Facility Technical Specification VATESI Law on NPP June 2007 Site evaluation October 2014 EIA April 2009 Parliament Positive conclusion of the IAEA mission on performed procedures and results received in 2010 Ministry of the Environment (MoE), VATESI, the local authorities, authorities responsible for healthcare, fire prevention, protection of cultural values, economic development, development of agriculture COMPLETED 18

4. Legal Reform. Improvements of Investment Framework 19

Set of legal acts approved in 2012 Law on Change of Law on Nuclear Power Plant Law on Granting the Concession and Assuming the Essential Property Obligations of The Republic of Lithuania in the Visaginas Nuclear Power Plant Project Law on Change of Law on Enterprises and Facilities of Strategic Importance to National Security and other Enterprises of Importance to Ensuring National Security Law on Ammendment of Law on Joint Stock Companies Law on Ammendment of Law on Elecrtric Energy Law on Change and Ammendment of Law on Energy Law on Ammendment of Law on Concessions Law on Ammendment of Law on Income Tax Law on Ammendment of Law on Construction Law on Ammendment and Law on Legal Status of Foreigners Law on Ammendment of Law on Land Law on Ammendment of Law on Expropriation of Land for Implementation of Projects of Critical Importance to the State 21 June 2012 Lithuanian Parliament approved the dedicated package of laws necessary for further Visaginas NPP project development, inter alia setting legal conditions for Project Company organization (PCO) establishment and signing of Concession agreement 20

Main legal acts for Visaginas NPP project environment Law on the Nuclear Power Plant The purpose of this Law - to create favourable legal, financial and organisational conditions that would help to implement the new nuclear power plant project Project Company Organisation described establishement, role and responisbilities Legal status and requirements of Strategic Investor, National investor and Strategic Partners described Business Relations Model (MANKALA) and Taxation of the Project Implementing Company Concession model established Requirements on project financing sources provided Other: provision of land plots as the contribution in kind clarified; special conditions for work and stay permits for non EU citizens; exemptions with regard to qualification confirmation and certification of companies etc. English translation of the law can be found following this link: http://www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=437747 21

Main legal acts for Visaginas NPP project environment Law on Granting the Concession and Assuming the Essential Property Obligations of The Republic of Lithuania in the Visaginas Nuclear Power Plant Project The purpose of the law: Approval of granting of the concession to the PCO in Visaginas NPP project Approval of Hitachi as the strategic investor, as well as the development of the project based on Hitachi-GE ABWR technology Assumption of the essential property obligations of the Republic of Lithuania stipulated in the draft concession agreement Approval of draft Concession Agreement (CA) English translation of the law can be found following this link: http://www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=436569 22

Lithuania s support and obligations to facilitate Visaginas NPP project development Essential State obligations stipulated in the CA Lithuania s obligations to facilitate project development Design of the main access road of the Visaginas NPP project prepared Ensure transfer of the site and the related intellectual property to the PCO Foreign investments protection Buying-out of PCO shares (put option) in case of CA termination for the events attributed to Lithuania s liability Compensation to the entities indicated in the CA for the losses arising from breach of the confidentiality undertaking by the Republic of Lithuania and violations of concession granting procedures and (or) guaranties Draft Concession Agreement can be found following this link: http://www3.lrs.lt/pls/inter3/dokpaieska.dok_priedas?p_id=56758 23

5. Activities in HR Development 24

National Plan for Preparation of Specialists in Nuclear Energy The National Plan for preparation of highly qualified nuclear energy specialists has been adopted in May 2011 by the joint order of the Minister of Energy and the Minister of Science and Education. The Plan foresees tasks and measures needed to educate the students later able to work in nuclear industry and related institutions Organization of studies in nuclear energy Maintenance of material base of educational and scientific institutions Tasks and Measures Assurance of quality of study programmes Establishment of encouragement and motivation system for students 25

National HR Developments to Support Nuclear Capabilities Estimation of HR needs for Visaginas NPP: 30 nuclear energy specialists during pre-project phase 100 nuclear professionals for nuclear power plant design and construction period about 300 nuclear professionals for NPP operation period around 60 professionals for state, higher education and research institutions Available sourcess Energy Physics Nuclear Engineering Nuclear Management and Engineering courses Ignalina NPP Re-qualification and re-training National Plan for Preparation of High Qualification Specialists in Nuclear Energy Programme of HR Development 26

Thank You for the attention Gediminas Karalius Adviser on nuclear energy development /Visaginas NPP project Electricity Sector Division e-mail: gediminas.karalius@enmin.lt