DECOMMISSIONING: Complexities Behind Carbon Neutral
Fossil fuels are a contentious topic. They have powered the world for generations and continue to fuel the global economy to huge extent. However, in recent years many governments, alarmed by the myriad of impacts of the climate crisis, have made a concerted attempt to switch towards “green” energy. It is in this context that decommissioning has become an increasingly significant issue in the coal power generation and mining sectors “due to economic, socio-political and environmental factors”. Today, we are giving you the low-down on decommissioning – what it is, how it’s done and why it matters.
What is decommissioning?
The dictionary definition of decommissioning is “to take equipment out of use”. This basic definition, however, fails to get to the root of what decommissioning means right now, especially for coal plants. In practice, decommissioning of coal plants requires “that a comprehensive and well-thought-out execution plan [that] provides for better human capital, financial, and operational outcomes…for the generation company” is executed with precision. It is heavily imbued with risk, both for the company responsible for power generation and the diversified power system. As one industry expert put it, when it comes to decommissioning, “a clear plan is essential – either you run the project or the project runs you.”
How is it done?
Experts on decommissioning processes at Scott Madden, have argued that decommissioning of coal plants should pass through three rigorous stages: (1) project setup, (2) design and detailed planning, (3) plan execution.
The first stage requires a comprehensive planning process involving senior management, who must define scope, timing, milestones and assign accountabilities before the announcement is made to the public of plant closure. This initial stage is vital. Senior management must consider the human, market and operational elements in turn, striking a delicate balance between all three before moving forward to stage two.
Stage two is when the detailed planning takes place after big picture has become clear in stage one. Each functional area (HR, accounting, regulation etc.) must work with key stakeholders (political leaders, community groups etc.) to create a plan in which all groups are confident. From handling waste to ensuring that former employees are provided for, the process must be planned rigorously and inclusively (as demonstrated by the German Coal Exit Law of 2020).
In stage three, the project is executed. Strategic control is key here in order to ensure that costs to not snowball and that local eco-systems are protected. Magnox’s Wylfa plant is currently in this final stage.
Why it matters?
If governments and businesses alike are committed to combatting climate change through switching towards green energy, it is likely that decommissioning is going to become an increasingly central process to our industry. The “rise and fall” of coal as the global energy driver has been labelled the most “dramatic story of world energy over the last 20 years”. The process behind this is highly complex, but it is vital we get it right if we are to decommission safely and swiftly.
Business Writer at Foresight Works