Submitted by Scott Belinksi of OilPrice.com [3],
A Precocious Dawn For The ITER Project?
News from Cadarache, France, home of the ITER project’s experimental nuclear fusion reactor, seems promising. After two years of constant delays, rocketing cost estimations and technical difficulties, the project seems poised to begin making up lost time. However, the ambitious project may be critically handicapped by its organizational structure.
As the project enters the third year of the construction phase, delivery of the first of the million components that will make up the tokamak reactor has begun in Cadarache. 2012 also held several symbolic milestones for ITER, as the site became the first fusion device to became licensed by a national nuclear authority and was connected to the French electrical grid.
"We’re doing everything we can to recover as much time as possible”, stated an ITER director in a recently aired BBC documentary. However, while ITER may be in a position to make up some of the time lost, the recent flurry of press coverage boasting of renewed confidence is overstated.
Holy grail or fumbled hail mary: A short history of fusion
Fusion nuclear energy has been described as both the ‘Hail Mary pass [4]’ and ‘Holy Grail’ of renewable energy sources. Fusion, the process that powers the sun by fusing together light atoms at extremely high temperatures, offers almost unlimited potential. The fuel is practically inexhaustible, the production process emits no greenhouse gasses and it is inherently safe from many of the safety concerns that have tarnished the reputation of fission nuclear energy. Finally, unlike most renewable energy sources under development, fusion nuclear energy could serve as a base load power source, providing huge amounts of energy around the clock relatively efficiently.
Despite the demonstrated potential, fusion has always been a technology perpetually on the horizon, [5] only 30 years away from commercialization. Like fission technology, fusion was developed for military use over 60 years ago, however, commercial utilization has eluded it. Nevertheless, civilian research, revived in the 1970s, has brought down many of the technical barriers and many fusion reactors have been successfully developed, notably the JET project, constructed by a consortium of European countries in the 1980s.
ITER portends to be the next step on the path to scaling up the process to commercial proportions. The project aims at building a break-even reactor, producing as much energy as is required to heat the plasma to temperatures exceeding 100 million degrees. The current timetable has November 2020 as the deadline for the completion of the construction phase.
The most apt metaphor may be a fumbled Hail Mary pass. The technical barriers no longer pose the insurmountable obstacles they have in the past, but the execution of the project relies on an overly complicated organizational architecture that lies at the root of many of ITER’s current woes. If one thing does prove fatal to this endeavor it will most likely be this.
Technical complications superseded by managerial nightmare
The ITER project’s organizational structure was more influenced by politico-industrial concerns than managerial and cost efficiency ones. Rather than provide direct financial support to the ITER organization in Cadarache, signatories to the ITER agreement provide the overwhelming majority of support through in-kind contributions. 90% of the project will be constructed using these in-kind contributions, which has been divided into 85 procurement packages that are doled out to the ‘Domestic Agencies’ set up by each of the seven ITER members. This structure obviously creates huge levels of redundancies in and of itself, which have been further exacerbated by a slew of other political, legal and economic issues.
For example, markets for many of the reactor components, narrow as it is on the global level, are tiny in the respective national markets from which the procurement is undertaken and the Domestic Agencies themselves are often constrained by public procurement rules that make innovative procurement approaches difficult to implement. Clever suppliers have smelled blood and duly honed in on the politically stricken beast.
The separation of the design and budget authorities (ITER organization and the seven Domestic Agencies respectively) makes implementing cost-savings identified during the construction phase next to impossible. Many procurement packages are negotiated at an intermediate level of maturity, meaning that Domestic Agencies play a significant role in developing the final specifications. As many of the components are highly interdependent, cost-savings measures identified by one Domestic Agency will imply design changes to a component procured by another party. Domestic Agencies have been reluctant to negotiate changes design changes one they have been started and ITER has served as an impotent negotiator. Thus, many cost-savings that have been identified simply cannot be implemented.
To add to this, another level of complexity has been introduced at the level of the Domestic Agency in Europe. Rather than assign the job to the competent national laboratory or outsource it to the most qualified bidder, as the US did, the Europeans have created a joint undertaking (Fusion for Energy) with an unwieldy 50-plus person board that has gone through three directors already in its short existence.
Europe has the most to lose
Disregarding technical barriers and the commercial feasibility of nuclear fusion itself, it is the organizational structure concocted for the ITER endeavor that would be most likely to bring the project down. A recently published report by French consultants at Ernst & Young for the Budgetary Control Committee of the European Parliament, found that the organizational structure inherently constrained the possibilities for cost-containment. With the worst management problems and highest financial stakes, if the dominos start to fall, it will most likely begin in Europe.
While management has improved drastically at the European Domestic Agency and a reshuffling of top management at ITER has put in place a more competent top brass, the report also questions the EU’s ability to finance such as long-term, risky project. Skeptics will certainly point to the disastrous Galileo project, the European satellite radio navigation and positioning program that tanked in 2007 when the EU withdrew the construction contract after the consortium awarded the contract demanded more money.
Europeans also have the most to lose if the project goes belly-up. With Europe shouldering over 40% of the costs, the investment by other parties is relatively minimal and they have nabbed procurement packages that allow them to further develop national fusion research agendas through ITER (although not necessarily as an end in and of itself). Moreover, ITER has been eating into EU level financing for alternative energies that could provide substantial returns on investment decades before fusion. In other words, if the project does come down, the Europeans will be the ones left with all their eggs in one basket.