27 International Thermonuclear Experimental
Reactor (ITER)
| (31601)
9424/10
+ ADD 1
COM(10) 226
| Commission Communication: ITER status and possible way forward
|
| Legal base | —
|
| Document originated | 4 May 2010
|
| Deposited in Parliament | 25 May 2010
|
| Department | Business, Innovation and Skills
|
| Basis of consideration | EM of 7 June 2020 and Minister's letter of 4 August 2010
|
| Previous Committee Report | None
|
| To be discussed in Council | See para 27.8 below
|
| Committee's assessment | Politically important
|
| Committee's decision | Cleared, but further information awaited
|
Background
27.1 The International Thermonuclear Experimental Reactor (ITER)
is a new experimental fusion facility, located in France, and
involving Euratom, China, India, Japan, Korea, Russia and the
United States, which aims to demonstrate the feasibility of nuclear
fusion energy for peaceful purposes, and to establish whether
this can become a major sustainable energy source, providing safe
and clean energy with no carbon dioxide emissions. The relevant
International Agreement came into force in 2007, and has an initial
duration of 35 years, covering three phases — construction
(10 years), operation (20 years) and de-activation (5 years).
During the construction phase, the EU will contribute five-elevenths
(about 45%)[112] of
the cost (80% of which will be met by Euratom and 20% by France),
whilst each of the other six parties will contribute one-eleventh
(about 9%). The Euratom contribution is managed through the European
Joint Undertaking for ITER — "Fusion for Energy (F4E)",
with Euratom, the 27 Member States and Switzerland all being involved
in its governance.
27.2 Although the total construction cost of ITER
was estimated in 2001 as €5.9 billion, it is now clear that
this will be significantly exceeded, but the Council nevertheless
recently confirmed its unanimous support for the project, to which
the EU is legally committed. This was, however, subject to certain
"boundary conditions" laid down by the Commission (notably
the inclusion of credible cost assessment and containment policies,
a realistic timetable, and sound project management at all levels)
being met, and the Council also asked the Commission to explore
the options for providing the increased funding needed during
the current Financial Perspectives, including the possibility
of securing a loan from the European Investment Bank (EIB) and
re-prioritising expenditure within the existing EU budget. The
Council also agreed that no new financial contribution from Member
States towards ITER construction costs will be possible during
the current Financial Perspectives.
The current document
27.3 The Commission has now sought in this Communication
to meet the Council's request. It notes that, whilst the 2001
cost estimate implied a EU contribution of €2.7 billion,
the latest estimate for the period 2007-20 has risen to €6.6
billion (plus a further €650 million for F4E running costs
and other activities), with Euratom meeting €5.9 billion
of the total €7.2 billion, and France the remaining €1.3
billion. It also points out that this would involve commitment
appropriations of €2.1 billion for the two years 2012-13,
as against programmed appropriations of €890 million, leaving
a gap of €1.4 billion (€550 million in 2012, and €850
million in 2013).
27.4 In seeking to consider how this situation might
be addressed, the Commission first stresses the need for sound
governance, and in particular for the operation of F4E to be overhauled
in order to deliver the necessary boundary conditions. It then
examines various ways in which the required additional funding
might be found. As regards a loan from the EIB, it notes that,
should the Bank require an explicit guarantee from Euratom, this
would involve unanimous agreement on the necessary change in the
legal act establishing F4E, but that the main problem would be
repayment of the loan in the absence of any identifiable income
stream. It therefore concludes that such a loan would not be an
appropriate solution. Likewise, it suggest that the size of the
funding gap is such that to meet it by transferring funds from
other headings within the EU budget would have a significantly
adverse impact on a range of other policies at the heart of the
Europe 2020 agenda, adding that neither this, nor a loan from
the EIB, would provide a structural solution.
27.5 The Commission accordingly suggests that there
are only two ways in which the EU's commitment to the ITER project
can be met:
Complementary funding from Member States
The Commission says that the 27 Member States and
Switzerland would need to make additional contributions of €1.4
billion for 2012-13, and to undertake to finance any cost over-runs
beyond those foreseen for the whole life of the project.
Adjustment to the Financial Perspectives ceilings
The Commission suggests that, provided a solution
to the funding of the whole life of the project is found, a net
increase in the overall ceiling of the 2007-13 financial perspective
could be envisaged for 2012-13. However, it notes that the Council
has so far insisted that the seven-year global ceilings of the
financial framework in terms of commitments and payments should
not be changed, and that future Multiannual Financial Framework
ceilings would need to be set at a level which enabled the EU
to meet its commitments to the ITER project.
In calling for the necessary funds to be made available
in order to secure the future of a project which it describes
as "emblematic of the EU's capacity to take a leading role
at global level in science and technology", the Commission
stresses the need for this to be agreed as soon as possible, in
order to enable a decision to be transmitted to its international
partners who it says are expecting a decision at the next meeting
of the ITER Council in mid-June.
The Government's view
27.6 In his Explanatory Memorandum of 7 June 2010,
the Minister of State for Universities and Science at the Department
for Business, Innovation and Skills (Mr David Willetts) says that
the UK has long supported ITER as the next step to practical fusion
energy supply, and recognises that more money will inevitably
be needed in order to meet the increased costs of the European
contribution because collapse of the project would be likely to
cost many billions of Euros in compensation. He adds that, whilst
it is important for there to be a proper assessment of the funding
options, the Government opposes a revision of the 2007-13 financial
framework and increasing the present EU budget to fund ITER cost
increases. In particular, it does not believe that, in a period
of fiscal restraint, there is scope for additional money at the
Member State level or for increased contributions to the EU budget,
and it has consistently argued that the redeployment of funds
from projects and programmes of lesser importance should be explored
in much more depth, with firm options, including the possibility
of a loan from the EIB, being put to the Council on which a solution
can be found.
27.7 The Minister says that other Member States have
shared the UK's reservations, and that the Spanish Presidency
submitted draft conclusions to ensure that the burden of additional
funding was not placed on Member States, but from within the EU
budget heading dedicated to the Seventh Research Framework Programme,
transport policy, nuclear decommissioning, the trans-European
transport and energy networks, the competitiveness and innovation
programme, lifelong learning and Galileo, with the main reprioritisation
likely in practice to fall on the first of these. He adds that
the Commission has argued that the draft conclusions did not provide
a clear enough financial commitment to ITER, and that no agreement
was reached at the Competitiveness Council on 26 May. However,
a task force with representatives from the Commission and Member
States had been established to try and find a solution, and the
Presidency would be advising on the timetable for its meetings.
27.8 We have since received from the Minister a letter
of 4 August 2010, indicating that the Council had agreed on 12
July that the additional resources of up to €1.4 billion
needed for 2012-13 would come from the existing EU budget, and
that the overall EU contribution for the period 2007-20 should
be reduced from €7.2 billion to €6.6 billion, with a
plan to this effect to be presented to the Competitiveness Council
on 26 November. He says that this would now form the basis of
the EU's position at the meeting of ITER Council to be held on
27-28 July, and that, in the meantime, the Commission had proposed
that €460 million of the €1.4 billion required in 2012-13
should come from the Seventh Research Framework Programme, €400
million from other unused funds, and the balance from a further
transfer to be specified later on.
Conclusion
27.9 The ITER project is clearly of some considerable
technical, economic and political significance, and, whilst we
recognise the legal commitments which the EU has entered into,
and the compensation costs it would incur if the project were
to collapse, it is disturbing that such a major cost over-run
should have occurred. In view of this, and the scale of the sums
involved, we think it right to draw these developments to the
attention of the House.
27.10 We also note the continuing discussion over
both the level of the EU's contribution to ITER, and the extent
to which this should be found from within the existing budgetary
ceilings. Since this last point has now been resolved as regards
2012 and 2013 in a way satisfactory to the UK, we are clearing
the current document, but we would be glad if the Minister would
keep us informed of any developments over the attempt being made
to reduce the remaining EU liability for the period 2007-2020
and the way in which this will be funded after 2013.
112 During the subsequent operation and deactivation
phases, this figure will fall to 34%. Back
|
