4
Cost and Schedule

The third and final charge of the statement of task directs the National Research Council to provide, to the extent possible given the accelerated schedule for this project, an assessment of the cost and timing aspects associated with implementation of each aluminum spent fuel treatment option. The four-month schedule for information gathering and report development did not permit an in-depth review of cost and schedule estimates for the alternative treatment options. Instead, the review has been focused on the methodologies used to estimate costs to see if they follow generally accepted practices, are applied consistently, and result in estimates that are useful for comparative and programmatic purposes. Many of the comments in this chapter are focused on the primary treatment options identified by the Task Team (direct co-disposal treatment and melt and dilute treatment), the baseline treatment option (conventional reprocessing), and hybrids of these options, because these appear to be superior to other treatment options identified by the Task Team as noted in Chapter 2.

The main sources of information used in this assessment are the presentations made at the two information-gathering meetings and the following documents:

  • Technical Strategy for the Treatment, Packaging, and Disposal of Aluminum-Based Spent Nuclear Fuel, Volumes 1 and 2 (Task Team, 1996).
  • Savannah River Site Aluminum-Clad Spent Nuclear Fuel Alternative Cost Study (WSRC, 1997b).


The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 77
--> 4 Cost and Schedule The third and final charge of the statement of task directs the National Research Council to provide, to the extent possible given the accelerated schedule for this project, an assessment of the cost and timing aspects associated with implementation of each aluminum spent fuel treatment option. The four-month schedule for information gathering and report development did not permit an in-depth review of cost and schedule estimates for the alternative treatment options. Instead, the review has been focused on the methodologies used to estimate costs to see if they follow generally accepted practices, are applied consistently, and result in estimates that are useful for comparative and programmatic purposes. Many of the comments in this chapter are focused on the primary treatment options identified by the Task Team (direct co-disposal treatment and melt and dilute treatment), the baseline treatment option (conventional reprocessing), and hybrids of these options, because these appear to be superior to other treatment options identified by the Task Team as noted in Chapter 2. The main sources of information used in this assessment are the presentations made at the two information-gathering meetings and the following documents: Technical Strategy for the Treatment, Packaging, and Disposal of Aluminum-Based Spent Nuclear Fuel, Volumes 1 and 2 (Task Team, 1996). Savannah River Site Aluminum-Clad Spent Nuclear Fuel Alternative Cost Study (WSRC, 1997b).

OCR for page 77
--> The first part of this chapter describes the cost and schedule estimates made by the Task Team and by Westinghouse Savannah River staff in the above-referenced reports. The last part of the chapter provides comments on the completeness of this work and its usefulness for comparative and programmatic purposes. Task Team Report Cost and Schedule Estimates Cost was one of the four ranking criteria used by the Task Team to compare the nine alternative treatment options discussed in Chapter 2. The Task Team referred to the cost estimates that it developed as "conceptual" and useful for comparative purposes only.1 The basis for the cost estimates included Task Team and third-party judgments, the latter primarily from "advocates" for each of the treatment options, costs for comparable applications, and simple calculations. The Task Team estimated the major cost components of an aluminum spent fuel handling, treatment, storage, and disposal system and, for each of these components, the Task Team developed a consistent set of methodologies for estimating costs. The objective was to achieve consistency in cost estimates for the various treatment options rather than to provide absolute estimates of system costs. To develop comparable cost estimates, the Task Team made several assumptions about the design and implementation of the treatment technologies, the most important of which are given below. 1   The estimates developed by the Task Team did not include factors such as indirect costs and contingencies, nor did they provide detailed breakdowns of facility and human resource costs.

OCR for page 77
--> Schedule. The Task Team assumed that aluminum spent fuel would be received and treated at Savannah River until the year 2035. The cost estimates covered the handling, treatment and interim storage, and disposal of all of the aluminum spent fuel received by Savannah River during this period. Facility Use. The Task Team assumed that the existing infrastructure at the Savannah River site, including existing buildings and secondary waste treatment facilities, would be used in the treatment and storage program whenever practical. For example, the Task Team assumed that the aluminum spent fuel would be received and stored in two existing wet storage facilities, the L-Basin and the Receiving Basin for Offsite Fuels (RBOF; see Figure 1.2). The Task Team also assumed that liquid high-level waste (HLW) streams from conventional reprocessing would be disposed of in the HLW tanks at Savannah River and eventually vitrified in the existing Defense Waste Processing Facility (DWPF). The Task Team noted that the use of existing facilities reduced the estimated costs of implementing most of the treatment technologies. Nevertheless, the Task Team determined that existing facilities were inadequate for all steps in the treatment and storage program and that a new spent fuel transfer facility (for receipt, handling, and packaging of spent fuel) was required for all of the treatment options. Spent Nuclear Fuel Receipt Schedule. The Task Team assumed that aluminum spent nuclear fuel receipts at Savannah River would follow the schedule shown in Figure 4.1. This schedule was based in large part on the capacity of existing facilities at SRS to receive and store the spent fuel under existing operating conditions. Schedules for Implementation of Treatment Options. The Task Team noted that the cost of each alternative treatment option would depend to a great extent on how quickly the option could be implemented. The Task Team assumed the following startup dates based on subjective judgments of the relative "maturity" of each treatment option:

OCR for page 77
--> Figure 4.1 Projected receipt schedule at Savannah River for aluminum spent fuel. NOTE: HFIR = High Flux Isotope Reactor spent fuel; FRR = Foreign Research Reactor spent fuel; INEEL = Idaho National Engineering and Environmental Laboratory aluminum spent fuel. SOURCE: Task Team (1996), Figure 4.2-1. 2001 startup date for direct disposal or direct co-disposal treatments. 2003 startup date for press and dilute and melt and dilute treatment. 2005 startup date for electrometallurgical treatment. 2006 startup date for plasma arc, dissolve and vitrify, or glass material oxidation and dissolution treatment.

OCR for page 77
--> The Task Team noted that these dates were "aggressive" and would require acceleration of budgeting, appropriations, and management practices. Other Assumptions. The Task Team made a variety of other assumptions in its cost estimates, two of which are worth noting here. First, the Task Team assumed that the wet basins would be deinventoried as soon as possible after the spent fuel transfer facility was opened to reduce operating costs. Second, the Task Team assumed that the treated fuel would be shipped to the repository beginning in 2020. The Task Team's conceptual cost estimates are shown in Table 4.1, and a brief explanation of the major cost factors is given in Table 4.2. The last column in Table 4.1, the "cost comparison point," was used by the Task Team as the comparative cost estimate for each treatment option. The cost comparison point was calculated by summing the conceptual costs for each of the cost factors (i.e., the first five cost columns of Table 4.1) and adjusting these for two factors. The first factor, cost "adjustments," involves additional costs or credits associated with each treatment option. For example, the $60 million cost adjustments (i.e., a $60 million expense) for the first four treatment options in Table 4.1 reflect the costs of an additional drying step to condition the fuel for interim storage.2 For electrometallurgical treatment, the minus $220 million cost adjustment (i.e., a credit of $220 million) reflects the estimated value of the recovered uranium in the commercial fuel market. The second factor, "relative cost uncertainty," is a measure of the uncertainty of the cost estimates for each treatment technology. The cost uncertainty was estimated by aggregating the uncertainties for each of the major cost factors shown in Table 4.2. These uncertainties were based on 2   The Task Team determined that some of the fuel would have to be hot vacuum-dried to reduce the water available to drive corrosion reactions during interim storage.

OCR for page 77
--> TABLE 4.1 Task Team Estimate of Treatment Option Costs Treatment Option Conceptual Costs by Categorya   Storage and Handling Transfer and Packaging Treatment Interim Storage Disposalb Adjustments Relative Cost Uncertaintyc Cost Comparison Point Direct disposal 280 440 0 120 440 60d 20 1,400 Direct co-disposal 280 430 0 130 210 60d 70 1,200 Press and dilute (20%) 350 420 230 100 90 60d 150 1,400 Press and dilute (2%) 350 440 230 120 200 60d 160 1,600 Melt and dilute 350 390 270 100 90 0 150 1,300 Plasma arc 460 380 450 90 90 0 440 1,900 GMODSe 460 390 410 110 140 0 410 1,900 Dissolve and vitrify 460 390 720 110 140 0 180 2,000 Electrometallurgical 440 360 600 0 50 -220f 400 1,600 Processing and co-disposal 430 170 640 50 90 -180f 10 1,200 a Cost estimates are shown in millions of dollars and are rounded to the nearest $10 million. b Includes transportation and disposal operations and a prorated share of repository development costs. c Adjustment for relative uncertainty among technology options as discussed in the text. d Estimated costs for a hot vacuum drying facility for fuels that will be direct disposed. e Glass material oxidation and dissolution. f Credit for sale of Uranium-235 on the commercial market. SOURCE: Task Team (1996), Table 4.2-2.

OCR for page 77
--> synoptic judgments by the Task Team of the reliability of the cost data and differences in the technical maturities of the treatment options. In general, the treatment options that are more complex or less mature in a technical sense tend to be associated with higher cost uncertainties. Thus, TABLE 4.2 Significant Cost Factors in the Aluminum Spent Fuel Dispositioning Program Cost Factor Description Wet storage and handling Primarily the cost of operating and maintaining existing wet storage facilities at Savannah River (L-Basin and RBOF) Transfer and packaging Pre- and post-treatment handling costs, including the cost of spent fuel transfer facility Treatment Actual costs associated with treating the waste to put it into a form acceptable for interim storage and repository disposal Interim storage The cost of constructing and maintaining an interim storage facility (a modular dry vault) of a size scaled for the number of waste canisters produced by each treatment option Disposal Costs for transportation of waste to the repository from Savannah River, placement of wastes in disposal canisters, and emplacement in the repository   SOURCE: Task Team (199 6).

OCR for page 77
--> for example, direct co-disposal treatment has a lower uncertainty because the technology is relatively mature. Plasma arc treatment is less technically mature and is therefore associated with a significantly greater uncertainty. A conceptual cost estimate for processing and co-disposal treatment (last row in Table 4.1; see Chapter 2 for a description of this treatment option) was included in the analysis for comparative purposes. The Task Team assumed that aluminum spent fuel at Savannah River would be reprocessed in the H Canyon at Savannah River until 2008, and the aluminum spent fuel received after that date would be treated using direct co-disposal treatment. Alternative Cost Study In December 1997, Westinghouse Savannah River Company released a report (WSRC, 1997b, hereafter referred to as the "alternative cost study") that provided life-cycle cost estimates for the period 19982037 for the aluminum spent fuel treatment program at Savannah River. This alternative cost study builds on the work in the Task Team report and attempts to provide more realistic cost estimates that can be used for program planning and decision purposes. In this study, life-cycle costs for each of the treatment technologies were estimated using a "bottoms-up" approach. Estimates for wet -storage and handling costs were made using the current operational costs of the L-Basin and RBOF facilities. Estimates for treatment, handling and packaging, and interim storage were made by costing out the required equipment and facility space and by estimating the number of staff and shifts needed to complete the work. Transportation and disposal cost estimates were based on the latest data available from DOE-Yucca Mountain. The cost estimates included indirect costs and contingencies, some financing costs for privatization (see the following paragraph), the costs for U.S. Nuclear Regulatory

OCR for page 77
--> Commission [USNRC] licensing3 and International Atomic Energy Agency [IAEA] safeguards and security controls,4 and adjustments for inflation. The cost estimates also reflected several changes in management plans, schedules, and other programmatic assumptions since the Task Team report was published. A detailed discussion of these changes is beyond the scope of the present report, but three significant changes are worth noting. First, the alternative cost study estimates were based on privatization of the aluminum spent fuel treatment program at Savannah River. Costs were adjusted for financing and a five-year capital recovery period to be consistent with Westinghouse Savannah River methods for estimating costs. Second, the estimates were based on a more realistic schedule for implementing the various treatment options. An implementation date of 2006 was assumed for direct co-disposal, press and dilute, and melt and dilute treatment, and a 2011 implementation date was assumed for the other treatment options. Third, the alternative cost study also considered the use of conventional reprocessing to treat part of the aluminum spent fuel inventory and assumed that shipments of some of the aluminum spent fuel now being stored at the Idaho Engineering and Environmental Laboratory (INEEL) could be accelerated. The alternative cost study provides cost estimates for conventional reprocessing of aluminum spent fuel until about 2010, followed by either direct co-disposal treatment, melt and dilute treatment, or continued reprocessing in a new dedicated facility. 3   DOE is self-regulating and is not required to obtain USNRC licenses for its facilities. If DOE decides to privatize the aluminum spent fuel treatment program, however, the contractor selected to run the program will have to obtain USNRC licenses for its facilities (under 10 CFR 72), even if they are constructed on the Savannah River site. 4   This involves verification of facility designs, records management, inspections, and containment and surveillance activities carried out in accordance with 10 CFR parts 73, 74, and 75.

OCR for page 77
--> From the information made available to the P.I. it was not possible to separate the technical, economic, and policy reasons for proposing the latter plan in which a dedicated facility would be built to continue reprocessing. The estimates of life-cycle costs adjusted to 1998 dollars are listed in Table 4.3, and the results of a sensitivity analysis of the cost estimates are shown in Figure 4.2. The sensitivity analysis was performed by assuming a +30 percent uncertainty in capital costs, +20 percent on new facility operating costs, +40 percent on repository costs, and +20 percent on uranium values (for resale of recovered uranium to the commercial market). Not surprisingly, the less complex or more mature treatment options (e.g., conventional reprocessing and direct co-disposal treatment) tend to have the lowest estimated costs and smallest cost uncertainties, whereas the more advanced treatment technologies (e.g., plasma arc treatment) are associated with the highest cost estimates and largest uncertainties. Comparison of Task Team and Alternative Cost Study Estimates The cost estimates provided by the Task Team and the alternative cost study are not in a strict sense directly comparable because they are based on different sets of planning assumptions and are indexed to different budget periods.5 Nevertheless, three general observations that can be made about these estimates for the purpose of a subsequent discussion of the final charge in the statement of task. The first observation is that the cost estimates provided in the alternative cost study are significantly higher than the estimates in the Task Team report. These differences range from $830 million for processing and direct co-disposal treatment to about $1.8 billion for 5   The periods are 1996-2035 for the Task Team report and 1998-2037 for the alternative cost study.

OCR for page 77
--> TABLE 4.3 Life-Cycle Costsa for Aluminum Spent Fuel Treatment Program from Alternative Cost Study   Wet Storage and Handling Transfer, Storage, and Treatment Fuel and Waste Processing Repository Disposal Uranium Credits Total Alternative Co-disposal 730 1,370 0 170 0 2,270 Melt and dilute 730 1,430 0 50 0 2,210 Press and dilute 730 1,670 0 80 0 2,480 Electrometallurgy 730 2,690 0 30 -270 3,180 Dissolve and vitrify 730 2,840 0 200 0 3,770 GMODS 730 2,470 0 200 0 3,400 Plasma arc 730 2,560 0 80 0 3,370 Reprocess and co-disposalb 750 740 670 70 -200 2,030 Reprocess and melt and dilutec 750 880 670 30 -200 2,130 Reprocessd 750 1,180 670 30 -270 2,360 a Cost estimates are shown in millions of 1998 dollars and are rounded to the nearest $10 million. b Reprocessing in the Canyons to last until 2010, followed by direct co-disposal treatment of remaining fuel. c Reprocessing in the Canyons to last until 2010, followed by melt and dilute treatment of remaining fuel. d Reprocessing in the Canyons to last until 2010, followed by reprocessing of the remaining fuel in a new dedicated facility. SOURCE: WSRC (1997b).

OCR for page 77
--> Figure 4.2 Sensitivity analyses of the life-cycle cost estimates for the various spent fuel treatment options. Open circle represents the estimated cost, and vertical bars indicate the uncertainty range. NOTE: GMODS = glass material oxidation and dissolution treatment; M&D = melt and dilute treatment. SOURCE: WSRC (1997b).

OCR for page 77
--> dissolve and vitrify treatment. The alternative cost study estimates are of total system costs based on more realistic schedules and system requirements. The second observation is that although the cost estimates in the two studies are significantly different, the relative rankings of the various classes of alternative treatment options are not. In both sets of estimates, the less complex and more mature treatment options are less costly than the more complex treatment options. The least expensive options (processing and direct co-disposal and processing and melt and dilute treatment) are those that rely to the greatest extent on proven treatment technologies (i.e., conventional reprocessing). A third observation is that there is a relatively small range of estimated costs for the various treatment options, particularly the more mature treatment options. In the Task Team estimate, for example, total system costs for the various treatment options range from $1,200 million to $2,000 million, and costs for the more mature treatment options (direct disposal, direct co-disposal, melt and dilute, press and dilute, and processing and direct co-disposal) range from $1,200 million to $1,600 million. In the alternative cost study, the estimated life-cycle costs of these mature treatment options range from $2,030 million to $2,480 million. At least three hypotheses can be offered to explain the similarity in costs for the mature treatment options: (1) the cost estimates are incomplete; (2) the costs of the mature treatment options are similar; or (3) the costs of the mature treatment options are different but comprise only a small part of the overall treatment and storage costs. The cost breakdown in the Task Team report (Table 4.1) suggests that the third hypothesis probably is most nearly correct. The estimated treatment costs for the mature technologies are significantly different—they range from zero for direct co-disposal to $270 million for melt and dilute—but account for only a small part of the total system costs for these treatment options. In other words, most of the costs are for handling, storage,

OCR for page 77
--> packaging, and disposal, not for treatment itself. In the alternative cost study, the distinction between treatment costs and storage and handling costs cannot be made because all of these costs are grouped into a single estimate. Response to Third Charge in Statement of Task The final charge of the statement of task involves the assessment of the cost and timing aspects associated with implementation of each spent nuclear fuel treatment option. This charge is addressed through a discussion of the following three questions: Do the cost estimates account for all of the major cost factors in the aluminum spent fuel treatment program? Are the cost and schedule estimates suitable for comparison of the options and selection of one or more preferred alternatives? Are the cost and schedule estimates suitable for budget planning purposes? Several of the consultants provided comments that were helpful in responding to these questions, most notably Maurice Angvall, Brian Estes, and Richard Smith. Their reports are provided in Appendix D. The answer to the first question—do the cost estimates account for all of the major cost factors in the aluminum spent fuel treatment program?—is ''yes." The major cost factors of the system for receiving, treating, handling, storing, and disposing of aluminum spent fuel for each of the treatment options were identified in the Task Team report, and systematic cost estimates for these major cost factors were developed in the alternative cost study report. The cost estimates were reasonably transparent in both reports: that is, both reports provided reasonably complete cost breakdowns, a list of the programmatic assumptions used in

OCR for page 77
--> the cost estimates, and an explanation of the methodologies used to estimate uncertainties in total system costs. Of the two cost studies, the alternative cost study is a more complete estimate of total system costs. This study includes detailed breakdowns of equipment, facilities, and manpower requirements for each treatment option. The cost estimates were constructed using reasonable scaling factors, contingencies, and inflation factors, and they account for IAEA security and safeguard costs and USNRC licensing costs. The answer to the second question—are cost and schedule estimates suitable for comparison of options and selection of one or more preferred alternatives?—is a qualified "yes." The cost estimates in both the Task Team report and the alternative cost study appear to be sufficiently complete for comparative purposes and for selecting a small number of alternative treatment options for further consideration. The observation noted above that the relative costs among the options in the two reports suggests that the major cost factors have been identified and costs have been estimated adequately in a relative sense. The schedules laid out in the Task Team report were clearly unrealistic, but this does not appear to have had a significant effect on the selection of treatment options. The schedules laid out in the alternative cost study report are more realistic but still appear to be somewhat ambitious, and there is no provision in the cost estimates for additional program delays. Additional significant program delays could add substantially to the costs for this program. The answer to the question is qualified because costs did not turn out to be a particularly effective discriminator of the various treatment options, mainly because the treatment options themselves comprised a relatively small part of overall systems costs. There was not much consideration given in either the Task Team report or the alternative cost study reducing overall systems costs by considering alternatives in the fuel receipt schedule shown in Figure 4.1. As noted previously, the fuel receipt schedule used in the Task Team report was based largely on

OCR for page 77
--> current handling and storage capabilities at Savannah River, and no consideration was given to how changes to this schedule could affect system costs or the selection of alternative treatment technologies. The alternative cost study did examine the impact of accelerating the receipt of aluminum spent fuel from INEEL on processing treatment options, but did not consider other potential flexibilities in the schedule. Additional comments on this point are offered in the next chapter The answer to the final question—are the cost and schedule estimates suitable for budget planning purposes?—is "no." Although the cost and schedule estimates in the alternative cost study are clearly more realistic than those in the Task Team report, the schedules are still very ambitious and depend to a great extent on the timely completion of work by other parts of DOE. For example, DOE-Savannah River will not be able to select the direct co-disposal treatment option until the acceptability of aluminum spent fuel for direct disposal is established by DOE-Yucca Mountain and the proliferation policy issue (Chapter 5) is resolved. The repository and engineered barrier designs at Yucca Mountain are changing and will continue to do so for at least the next two years, and a definitive PA may not be available until after the environmental impact statement (EIS) and record of decision (ROD) for the aluminum spent fuel program are released.6 The nonproliferation study currently under way in another part of DOE (Chapter 5) also could significantly impact schedules, budgets, and the selection of treatment options, especially conventional reprocessing. The cost and schedule estimates also are limited by the lack of conceptual designs for some of the treatment facilities and because some of the process steps have not yet been demonstrated to work for aluminum spent fuel. This affects not only construction and operating costs, but also the decontamination and decommissioning costs of any such facility. Additionally, the alternative cost study assumes privatization of the 6   As noted in Chapter 1, DOE-Savannah River plans to issue the EIS-ROD in 1999.

OCR for page 77
--> treatment program, but DOE experiences with cost estimates for privatization have not been very reliable in the past. The cost estimates also do not consider the impacts of program delays on costs and schedules. Some amount of delay seems inevitable even under the best of circumstances and could come from several quarters. DOE must decide, for example, whether to pursue the project under the privatization program, and if so, it must prepare a solicitation, review bids, and negotiate a contract. A budget for the program must be developed and submitted to the office of Management and Budget (OMB) and to Congress, and funds must be authorized and appropriated. Facilities must be designed and constructed and must pass environmental, health, and safety reviews, including USNRC reviews. Treatment equipment will have to be constructed and tested, and unanticipated problems will have to be addressed. The program has been unable to meet the schedules outlined in the Task Team report, which was published only two years ago, and a number of additional delays of varying significance will no doubt be encountered as the program moves forward. There is no allowance for such delays in either the Task Team report or the alternative cost study, although DOE-Savannah River staff did express sensitivity to these issues at the information-gathering sessions. DOE-Savannah River will have to incorporate sufficient budgeting and scheduling flexibility into its planning to deal with such delays.