Widespread concern over nuclear plant decommissioning has triggered similar interest in the decommissioning of fossil-fired steam generating stations. This rising interest stems in part from the emergence of a competitive market in electric generation, which, among other things, threatens impairment of assets.
Fossil decommissioning issues are not nearly as contentious as those that attend nuclear plants. Nevertheless, the magnitude of cost estimates for fossil decommissioning, when expressed as a percentage of station investment, is high enough to demand attention from accountants and regulators.
Over the 30 years during which I have been involved with setting fossil station depreciation rates, I have seen a steady progression in the need for and attention paid to plant decommissioning. Where fossil stations once carried a zero decommissioning cost (em with the contractor keeping the salvage (em fossil decommissioning today incurs significant costs. This change derives partly from strict rules for handling hazardous materials, and partly from the design of the stations involved.
Past experience is unlikely to provide a meaningful indication of decommissioning costs for most existing fossil stations. Most prior experience has largely come from removal of units with self-supporting boilers. Modern stations, however, come equipped with very large top-hung boilers that require more extensive (and costly) removal procedures. Yes, modern stations will employ less insulation containing asbestos, which will reduce decommissioning costs. But salvage value will be limited for modern stations, because large top-hung boilers will hold only scrap value and the other equipment, being quite old, is unlikely to have any reuse value.