IFE Annual Report 2021 by CopyCat AS

YEAR

Research for a better future

www.ife.no

IFE Annual Report. IFE bears no responsibility for printing errors. Graphic design and print: CopyCat AS RESEARCH FOR A BETTER FUTURE 2

About IFE The Institute for Energy Technology (IFE) conducts research for a better future. Since 1948, we have been a frontrunner in international energy research. The knowledge we have developed has saved the petroleum industry several hundred billion kroner. We have contributed to the development of ground-breaking cancer medicine, new solutions in renewable energy, more energy-efficient industrial processes, zero-emission transport solutions and future-oriented energy systems. At IFE, we build bridges between research, education and industry. We have extensive infrastructure and full-scale laboratories where theoretical models are transformed into commercial activities. IFE has unique expertise and systems within radiation protection and environmental monitoring of radioactive and chemical emissions. This makes us an important partner for companies that want to research, develop and produce new solutions for renewable energy and medicine using radioactive sources. The digitalisation of society is seeing the emergence of a new era. IFE has broad digital expertise and contributes to quality assurance and efficiency improvements for customers in the public sector and in trade and industry. When the next chapter in Norway’s history is written, it will be about how we adapt. We must create new and sustainable jobs. At IFE we have already begun – we are conducting research for a better future.

IFE ANNUAL REPORT 2021

Income statement

Parent company

Group

Figures in NOK thousand

2021

2020

Income statement per 31.12.

2021

2020

693 248

650 259

Contract revenues

693 248

650 259

416 478

413 011

Government grants

416 478

413 011

31 853

44 571

Contributions from international partners at Halden

31 853

44 571

2 458

728

Other operating income

2 670

728

1 144 038

1 108 569

Total operating revenues

1 144 249

1 108 569

638 684

602 581

Payroll and personell expenses

640 581

604 282

101 425

96 060

Cost of sales

101 425

96 060

352 367

349 360

Other operating expenses

353 355

349 779

26 393

26 750

Depreciation, fixed and intangible assets

26 393

26 750

457

395

Write-down of fixed assets

457

395

1 119 327

1 075 147

Total operating expenses

1 122 212

1 077 266

24 710

33 423

Operating profit

22 038

31 303

1 474

2 739

Financial income

1 393

3 066

1 218

3 147

Financial expenses

1 374

299

256

-408

Net financial items

2 767

24 966

33 015

Profit before tax

22 056

34 070

Tax

-2 897

677

24 966

33 015

Net profit for the year

24 953

33 394

Allocation of net profit for the year 24 966

33 015

Other equity

RESEARCH FOR A BETTER FUTURE

Report of the Board of Directors Nature and location of the business The Institute for Energy Technology (IFE) was established in 1953 with the objective of conducting nuclear research. Today its objective is to work on a not-for-profit basis for the public good by conducting research and development in the field of energy and other areas where the foundation’s expertise is of particular relevance. The foundation is registered in the Register of Business Enterprises in Brønnøysund, with organisation number 959 432 538. IFE is located at Kjeller and in Halden. The Board of Directors consists of seven members, two of whom are elected by employees. The Ministry of Trade, Industry and Fisheries appoints IFE’s other board representatives. Six board meetings were held in 2021. IFE’s activity was originally aimed at nuclear research, but now consists of several divisions; Research and development, Radiopharmacy and Nuclear operations and safety. IFE Real Estate was established as a separate division in 2021. In March 2021, the Storting approved Report to the Storting no. 8 (2020-2021) on the safe decommissioning of Norwegian nuclear facilities and radioactive waste management. The Storting decided that IFE’s nuclear facilities and employees are to be transferred to the Norwegian Nuclear Decommissioning Authority (NND), and determined that the State shall cover all necessary costs for the clean-up of nuclear waste. This is a very important framework condition that establishes the necessary prerequisites both for the important task of dealing with the challenges of 70 years of nuclear operations in Norway and for being able to further develop IFE’s other activities. Nuclear activities at IFE currently consist of the decommissioned nuclear reactors at Kjeller and in Halden, and the associated facilities and organisation of approximately 200 employees. This division is mainly financed through government grants. IFE’s nuclear operations, along with the associated facilities and personnel, will be transferred to NND when NND is granted a licence. IFE and NND have set 1 January 2024 as the target date for the transfer.

IFE ANNUAL REPORT 2021

One measure in the transfer of nuclear facilities to the Norwegian state has been to build a new and modern security control around the facilities, that will be transferred to NND on 1 January 2024.

IFE has decided to facilitate an organisational structure that enables further development of its other activities. In 2021, efforts were initiated to create a group model in which the radiopharmacy and R&D divisions will be separated from the IFE foundation and established as separate subsidiaries. In 2021, the foundation established three new limited companies: IFE Holding AS, IFE Pharma AS and IFE Research AS. At the start of the year, these were shell companies that are part of the group. The annual report applies to both the IFE foundation and the group. The consolidated financial statements consist of IFE, the aforementioned subsidiaries and IFE Invest AS.

Research and development (R&D) The R&D division conducts applied research and its ambition is to be an internationally leading research environment within energy, the environment and digitalisation. Through its research activities, IFE will build on the UN’s Sustainable Development Goals (SDGs) and the EU’s focus areas related to global challenges. R&D employs approximately 300 employees in the two research sub-divisions ENET (Energy and Environmental Technology) in Kjeller, and DS (Digital Systems) in Halden.

RESEARCH FOR A BETTER FUTURE

IFE is a research institute for technology and industrial development and receives core funding from the Research Council of Norway. This is an important source of funding for the research activities, and it gives IFE the opportunity to develop research and expertise within the guidelines for core funding for research institutes and research groups. IFE is involved in national and international research projects. Funding is mainly from contracts and contributions to research activities under the auspices of the Research Council of Norway, the EU’s research programmes and industry-funded projects. IFE disseminates knowledge generated from research activities through scientific publications in international journals and other publications approved for the Norwegian Science Index, at science conferences and in popular science articles. IFE has a recognised research infrastructure with a number of high-tech laboratories. In 2021, IFE was awarded four new infrastructure projects under the national infrastructure scheme within battery, multiphase, neutron technology and energy flexibility respectively. In 2021, IFE decided to invest in the establishment of a new battery production line at Kjeller. The battery investment will be IFE’s largest investment for ten years, and it is crucial for developing the Norwegian battery industry.

In 2021, IFE was awarded four new infrastructure projects from the national infrastructure scheme within battery, multiphase, neutron technology and energy flexibility.

IFE ANNUAL REPORT 2021

The robot dog Spot from Boston Dynamics was one of IFE’s new investments in 2021 for Digital Systems (DS). On 16 April, Spot participated in the launch of «My Digital City», which is a collaboration between IFE and Smart Innovation Norway, Østfold University College, Halden Municipality, eSmart Systems and Halden Næringsutvikling.

IFE has entered into a partnership agreement with the Paul Scherrer Institute (PSI) in Switzerland to continue the neutron research activities and the NcNeutron infrastructure that was connected to the JEEP II reactor at Kjeller. NcNeutron is a national research infrastructure funded by the Research Council of Norway. IFE hosts the Halden Project, which was established in 1958 as an international research collaboration under the OECD. The Halden Project is Norway’s largest, longest and most international research programme, and has been fundamental to IFE’s work. Until 2020, the Halden Project included activities in fuel and materials research as well as safety research, which were not dependent on reactor operation. The decision was made in 2018 to close down the Halden reactor, and the activities within fuel and materials research will be gradually wound down and terminated. In 2021, IFE entered into an agreement with its research partners to extend the original project agreement to 2023 in order to complete this work. Meanwhile, it was also decided to continue the Man-Technology-Organisation (MTO) activities in the programme by establishing a new programme with 20 international organisations from 11 different countries under the name ‘Halden HTO Project’, where HTO stands for Human-TechnologyOrganisation.

RESEARCH FOR A BETTER FUTURE

2021 has seen extensive relocation of the research activities at Kjeller. IFE has had to move more than 150 employees out of the office premises as the area has been reserved for nuclear activities. Several central laboratories and much of the national research infrastructure will have to be moved out of the area when the nuclear activities are transferred to the public authorities. IFE is currently in negotiations with the government to reclaim the costs incurred for the relocation. In 2021, IFE considered various models for a closer collaboration with three other research institutes. The parties decided in that year that a joint research group would not be appropriate at the present time, but they plan to enter into a strategic partnership agreement. This work will be continued in 2022.

Radiopharmacy The Radiopharmacy division is divided into three sectors: Production, Wholesale and R&D. Production consists of the commercial production of pharmaceuticals and production for clinical trials. The bulk of the turnover is related to contract production of the cancer drug Xofigo for the German pharmaceutical group Bayer. IFE has been collaborating with Bayer for several years on product development and the expansion and construction of production premises and equipment. The manufacturing process is in line with the pharmaceutical authorities’ quality requirements and GMP (good manufacturing practice) regulations. In addition, the radiopharmacy division is involved in development projects with Norwegian and international clients, and produces pharmaceuticals that are used in clinical trials around the world. Radiopharmacy also provides quality control services, including sterile testing of radiopharmaceuticals in both the commercial and clinical phases, as well as the development of radiochemical/chromatographic methods. Radiopharmaceutical Wholesale is a national wholesaler and retailer for radiopharmaceuticals in Norway. Over several decades, IFE has developed unique expertise in the import, export, control and distribution of radioactive pharmaceuticals. IFE controls and distributes all radiopharmaceuticals directly to the nuclear medicine departments of Norwegian hospitals.

IFE ANNUAL REPORT 2021

Radiopharmacy has a complete infrastructure with development expertise, production expertise and facilities for local and global distribution. There is also infrastructure in terms of licenses and permits, accreditation, radiation protection, waste management, physical security and emergency preparedness.

Radiopharmacy has a complete infrastructure of development expertise, production expertise and facilities, local and global distribution and infrastructure in the form of licences and permits, accreditation, radiation protection, waste management, physical security and emergency preparedness. The division has laboratories that are classified both in respect of purity classes in accordance with international GMP (Good Manufacturing Practice) regulations and radiation protection legislation. The division was granted a permit by the Norwegian Medicines Agency and the Norwegian Radiation and Nuclear Safety Authority (DSA) to conduct wholesale and retail operations within radiopharmaceuticals. Radiopharmacy has well-established collaborative relationships and close access to clinics and research institutions and to companies of various sizes and stages of development at Oslo University Hospital and the University of Oslo. Market studies show a large potential for radiopharmaceuticals on a global basis. The radiopharmaceutical division at IFE represents considerable potential, but significant investment would be required. In 2021, IFE began looking at how to separate the area into its own company in order to exploit the potential of radiopharmaceuticals. This process will continue in 2022.

Nuclear operations and safety Nuclear operations and safety consist of the nuclear facilities and the associated land and organisation. This entire operation is slated for transfer to NND on 1 January 2024.

RESEARCH FOR A BETTER FUTURE

IFE ANNUAL REPORT 2021

IFE’s main task is to ensure the safety of the nuclear facilities. The main priorities are to strengthen safety and security, manage spent fuel and prepare the transfer of facilities and personnel to NND. The work includes meeting requirements imposed and conditions issued by the DSA via inspections, approvals and licences. This involves continuous efforts to adapt the organisation to a new purpose, to safeguard, acquire and build new competence, strengthen the safety culture, and manage and store spent fuel and prepare for the decommissioning of the facilities. The safety of the nuclear facilities has been satisfactorily secured. The nuclear waste is properly managed and stored in relation to the relevant premises and prerequisites. IFE is working closely with NND and they have established common goals and values. IFE receives funding from the national budget to finance the costs of nuclear operations and safety within the parameters set by the government. In 2021, NOK 314.3 million of government funding was allocated to the operation of nuclear facilities and NOK 35.0 million to securing nuclear facilities. The government has previously ordered IFE to pay an annual contribution towards the nuclear clean-up of approximately NOK 8.5 million. For 2021, this requirement was waived, in line with the Storting’s decision for the government to cover all such costs. This means that IFE’s other activities are not encumbered with liabilities related to the nuclear clean-up. In connection with the reorganisation of IFE in Halden, IFE’s management was notified by staff in spring 2019 of possible irregularities in customer projects in the testing of fuel and materials for use in nuclear power. IFE conducted a preliminary investigation, and it was decided in the summer of 2019 that an external investigation of the situation should be carried out. The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (ØKOKRIM) was also notified. The investigation concluded that irregularities had occurred in five bilateral projects for four different customers in the period 1995–2003. These entailed data or tests being modified contrary to customer specifications and/or IFE’s test procedures without this being communicated to or agreed with the customers. The investigation further concluded that these actions should be regarded as scientific misconduct, and contrary to research ethics principles. No irregularities were found in connection with the Halden Project, and no conditions were identified that could have compromised the safety of the plant. The investigation concluded that it has gone as far as it can within the framework of civil law, and IFE therefore decided to end the investigation in 2021. Work is still ongoing to follow up the customers affected. DSA’s audit of the investigation is also still ongoing.

RESEARCH FOR A BETTER FUTURE

IFE Real Estate IFE owns a large portfolio of properties in Kjeller and in Halden. The portfolio at Kjeller needs significant investment in infrastructure and upgrading, and the transfer of nuclear facilities to the government means that IFE will lose access to a number of laboratories. IFE’s activities within R&D and radiopharmaceuticals are seeing significant growth, and new laboratories and production areas need to be built in the future. IFE Real Estate was established as a separate division in 2021 to manage and develop the property portfolio. Extensive efforts are underway to draw up a master plan and zoning plan for the plots at Kjeller with the aim of developing the area into a high-tech research and technology park to house IFE’s R&D activities, as well as facilitating the growth and development of the radiopharmaceutical division. IFE’s property portfolio in Halden also has considerable potential for further development.

The annual financial statements In 2021, the group’s consolidated turnover amounted to NOK 1 144 million (NOK 1 108 million in 2020), while the IFE foundation’s revenue amounted to NOK 1 144 million (NOK 1 108 million in 2020). The company’s accountants are KPMG. The turnover is at the same level as last year. Government subsidies amount to NOK 416 million of the foundation’s and group’s turnover. The largest share relates to operation and safety of nuclear facilities, while other items relate to core funding and allocations for the Halden Project etc. See also note 10 to the accounts for further details. The group’s and the foundation’s other turnover relates to revenue from contracts and contributions to research activities, international participants in the Halden Project and the radiopharmaceutical activities. The group’s and the foundation’s research activity is funded through the Research Council of Norway, the EU and partners in industry. The R&D division had a turnover of NOK 410 million in 2021 (NOK 407 million in 2020), while radiopharmacy’s turnover was NOK 370 million (NOK 361 million in 2020). At radiopharmacy, turnover in production has fallen, while there has been an increase within wholesale and R&D.

IFE ANNUAL REPORT 2021

IFE currently has 56,000 m2 of high-tech buildings, and is working on a master plan that calls for the development of another 60,000 m2. The goal is to become the most attractive research park in the nordic region for renewable energy, petroleum, nuclear medicine and digital systems; by offering world-class research infrastructure.

The group shows a profit of NOK 25 million (NOK 33 million in 2020), while the profit for the foundation amounted to NOK 25 million (NOK 33 million in 2020). The result is attributable to income from contracts in the foundation’s research activities and the radiopharmaceutical activities. The nuclear activity is financed through government grants and does not generate a profit or loss. The foundation’s balance sheet includes a disputed current liability of NOK 13 million, which is classified as short-term debt and is largely associated with disputed accounts payable. The liability is valued at the best estimate based on probable outcomes, and the true cost may turn out to be higher or lower than the book value. As of 31 December 2021, the equity for the group amounted to NOK 451 million (NOK 426 million in 2020), while the equity for the foundation amounted to NOK 397 million (NOK 372 million in 2020). The equity ratio is 46% and is considered good. The cash-flow statement is negative for the foundation as well as the group. The group’s consolidated cash balance has been reduced by NOK 38 million, while the foundation’s cash balance has been reduced by NOK 20 million. Net income from operations amounted to NOK 29 million for the group and NOK 32 million for the foundation. The negative cash flow is due to investment in assets in the foundation and financial investment in IFE Invest.

RESEARCH FOR A BETTER FUTURE

Financial risk The foundation aims to keep financial risks as low as possible. The liquidity risk is moderated by an overdraft facility agreement with the bank, and a focus on cash flow in major projects. No hedging instruments were employed in 2021, but this remains an option in the event of considerable exposure to currency risks.

Market risk The market risk to which the group and the foundation are exposed is principally associated with currency, from both income and costs in foreign currencies. Measures to reduce exposure to currency risks are implemented with regard to any large individual transaction, but there are no ongoing hedging transactions because the risk is considered to be low. At the end of 2021, the foundation had an investment of NOK 25.3 million in a low-risk fixedincome fund. The foundation and group are exposed to exchange rate fluctuations in this fund.

Credit risk Both the group and the foundation are exposed to credit risks associated mainly with accounts receivable and lending. The group and the foundation have made provisions for bad debts to the tune of NOK 4 million. There is also a potential credit risk associated with advance payment to suppliers.

Liquidity risk The foundation’s liquidity is good, and bank deposits minus restricted tax withholdings amounted to NOK 274 million at the end of 2021. The liquidity at the end of 2021 was NOK 20 million lower than the year before. For the foundation’s liquidity risk to be acceptable, the available cash balance should be in the range of NOK 100 million in order to cover current liabilities. The foundation has a cash pool agreement with its wholly owned subsidiary IFE Invest AS, and this provides flexibility with regard to short-term liquidity fluctuations. The foundation has agreed with its bank that an overdraft facility will be made available if required.

IFE ANNUAL REPORT 2021

Continued operation Pursuant to section 3(3)(a) of the Norwegian Accounting Act, the Board confirms that the criteria for continued operation are present and that the group’s finances are in a healthy state.

Sustainability IFE’s Board of Directors decided in 2021 to strengthen its efforts in sustainability and expand the scope to include environmental, social and economic and/or governance issues. The Board and management recognise that the requirements and expectations for sustainability are seeing significant change, both nationally and in the EU. The foundation is preparing for more stringent environmental requirements and reporting requirements from authorities, customers and suppliers through systematic work with sustainability. This work is partly guided by the SDGs and the EU’s taxonomy with accompanying guides and tools, and preparations are underway for the implementation of the Transparency Act. Sustainability is central to IFE’s social mission and identity, and through its research activities and radiopharmaceutical activities, we work actively with sustainability and to deliver on the SDGs. Overall responsibility for sustainability rests with IFE’s management team. In 2021, IFE initiated efforts to strengthen sustainability by enhancing the skills of management and staff, with the help of external advisers. It has been decided that sustainability is to be integrated into IFE’s strategy at the foundation level, throughout all strategies and substrategies. As IFE has a very complex business structure, a materiality and risk analysis will be carried out in 2022 to identify the requirements and arrangements for sustainability in the different divisions. IFE will involve key stakeholders in this work. The materiality and risk analysis will form the basis for the strategic work, as well as the work on goals, KPIs and reporting in relation to sustainability. Sustainability will also be incorporated into processes and procedures in the management system. IFE strengthened its work in ethics in 2020 following recommendations from an investigation of projects at the Halden reactor. As a research institute, the foundation is subject to the Research Ethics Act. In 2021, training was introduced on IFE’s ethical guidelines, including cases for dilemma training and training in research ethics. IFE’s ethics council held six meetings in 2021, and dealt with nine reported cases. Going forward, the ethics work will be incorporated into the work on sustainability.

RESEARCH FOR A BETTER FUTURE

The working environment The work situation for many members of staff continues to be impacted by the coronavirus pandemic. Some of IFE’s activities are essential to society and national security and IFE has therefore introduced measures that in some instances are stricter than the nationally imposed rules and guidelines for infection control. Inspections have been conducted and the company health service has offered counselling sessions with a particular emphasis on identifying any adverse effects on the working environment caused by the coronavirus situation. The working environment is considered to be good. IFE conducts an annual survey of job satisfaction among employees. Staff satisfaction rates have increased steadily in recent years and the 2021 survey showed an improvement compared to earlier surveys. This is a positive development in view of the comprehensive changes in IFE. The organisation actively follows up the staff survey in order to continue improving the working environment. In 2021, total sick leave was 3.7%, which is below the 4% target. It is particularly long-term sick leave that has seen an increase. Employees on sick leave receive close follow-up to ensure that a speedy return to work is facilitated through individually adapted work stations and duties. In 2021, there were eight incidents involving personal injury, seven of which resulted in short-term sick leave.

Equal opportunities and discrimination Equal opportunities The company’s permanent staff includes a total of 624 employees, of whom 231 are women (37.2%) and 392 are men (62.8%). There are a total of 61 temporary employees, of whom 47 are men (77%) and 14 are women (22.9%). A total of 37 employees work in part-time positions. Of these, 18 are men (48%) and 19 are women (51%). In 2021, three women and four men sat on IFE’s Board of Directors. There were four women and five men in the management group.

IFE ANNUAL REPORT 2021

Salary is based on objective criteria such as length of service and level of education (master/bachelor/trade certificate, etc.). Terms and conditions such as working hours, welfare schemes, entitlement to leave, etc. are designed to prevent discrimination on the grounds of gender or any other parameter. Promotions are considered and granted on the basis of gender-neutral criteria. IFE aims for full gender equality, and has appointed a cross-party group to ensure that routines are in place for compliance with the regulations on equality and discrimination. The group has a mandate to investigate whether discrimination exists, and shall propose measures where this is found. IFE decided in 2021 to carry out a salary survey, which also includes a survey of involuntary part-time working. This work is currently underway and will be completed in 2022. Discrimination The foundation’s ethical guidelines stipulate that employees must contribute to a fair and inclusive working environment that is devoid of discrimination on the grounds of ethnicity, gender, sexual orientation, religion, political leanings or social background. In 2021, IFE had employees with 31 different nationalities. IFE’s recruitment is based on demand and objective criteria that should not be affected by a candidate’s gender, pregnancy, parental leave for childbirth or adoption, care responsibilities, ethnicity, religion, life stance, disability, sexual orientation, gender identity, or gender expression. Every year, IFE conducts a working environment survey referred to as AMIS. The survey is used to identify discrimination or unreasonable bias within the organisation. The results of the survey are presented to IFE’s line organisation. Based on this, action plans are prepared down to departmental level to manage any non-compliance or improvement measures. The results of these are assessed in a midway evaluation and subsequently a final evaluation. IFE has established internal and external whistleblowing channels for employees to report any breaches of the ethical guidelines. The internal whistleblowing channel is managed by the HR department, while the external, anonymous channel is managed by a law firm. The whistleblowing rules have been included in IFE’s ethical guidelines and form a part of the ethics training programme and management training.

RESEARCH FOR A BETTER FUTURE

IFE actively seeks to provide a workplace that is adapted for the employees’ health, environment and safety. The foundation works with the company health service to deliver preventive health services for employees. IFE’s arrangements for leave of absence in connection with childbirth or adoption are more beneficial for employees than the current National Insurance scheme. All employees receive their ordinary rate of pay while on leave. Based on a risk assessment, pregnant employees who work with radioactive substances and ionising radiation will be transferred to other duties that do not involve occupational exposure for the remainder of the pregnancy. In 2021, a total of 18 IFE employees took parental leave. Of these, 10 were women and 8 were men. The average period of parental leave was 20 weeks. IFE has introduced flexible working hours for all employees who are not working shifts.

External environment IFE is certified under ISO 9001 and 14001:2015, and works continually to identify any major environmental issues seen in a lifelong perspective.

Nuclear waste and storage Norway was a pioneer in the field of nuclear research, and was the sixth country in the world to build a nuclear reactor. Operations have generated approximately 17 tonnes of spent reactor fuel. Since IFE was an early pioneer in nuclear research, and over the years has researched many different types of fuels and materials, the type and composition of waste is extremely heterogeneous. Waste management is therefore very complex and challenging, and extensive studies and the construction of new facilities are required to carry out the clean-up. IFE is working with NND to ensure that the waste management process and preparations for decommissioning are safe, responsible and cost-effective. IFE has a licence to own the fuel and manages this according to current legislation. As the licensee, IFE is responsible for all projects and activities related to licensed facilities. NND is the project owner and is responsible for conducting fuel studies and studies associated with the ongoing decommissioning. Highly enriched uranium poses a security risk, and Norway is one of the few countries in the world that still possesses this type of material. In 2021, Norway and the United States signed a letter of intent to develop a method which will ensure that Norwegian highly enriched IFE ANNUAL REPORT 2021

uranium can no longer be used for nuclear weapons, making it suitable for storage and disposal. This is an important agreement for Norway and an important step on the path to a safe clean-up of Norway’s nuclear activities. The National Combined Disposal and Storage Facility for Radioactive Waste (KLDRA) is located in Himdalen in Aurskog-Høland municipality. The KLDRA plant is owned by the government and managed by the Norwegian Directorate of Public Construction and Property, and was put into operation in 1998. IFE has an operating licence for the plant through an agreement with the Ministry of Trade, Industry and Fisheries, which finances the operation. KLDRA manages waste from IFE, the Norwegian manufacturing industry, the health service and the Defence. No waste was transported or deposited at the plant in 2021. In that year, IFE, in collaboration with NND, hired external consultants to carry out an assessment of the condition of the depository as part of the preparations for transferring the plant to NND. The main finding was that the facility is safe and secure as long as it is in normal operation and under institutional operation and supervision. The report points to the need for further investigations of the condition of the facility on the day it is closed, sealed and is no longer staffed, which is planned for between 300 and 500 years in the future. IFE and NND will continue their studies in 2022.

Environmental monitoring IFE is subject to a strict body of regulations on safety and emissions. Our safety is closely monitored nationally and internationally by the Norwegian Radiation Protection Authority (DSA) and the International Atomic Energy Agency (IAEA) respectively. In the case of emissions, DSA sets limits for how much radioactive material we can discharge to air and water. The emissions licence sets specific emission limits per radio nuclide. In addition, limits are set for the maximum dose of radiation to which individuals in the most vulnerable population groups can be exposed. The limits are very low; however, IFE’s emissions are far lower than the maximum values. IFE has unique expertise and systems within radiation protection and environmental monitoring of radioactive and chemical emissions. At IFE, we have laboratories for measuring radioactivity in various types of samples, and everything from rock and sediment to fish and urine samples can be analysed. The task of DSA is to ensure that all use of radiation sources and radioactive material is in accordance with national laws, regulations and guidelines. IFE works actively to limit and reduce any radiation doses for employees, as well as to check that emissions during normal operation are within the emission limits.

RESEARCH FOR A BETTER FUTURE

IFE has an environmental monitoring program where samples are regularly collected and analyzed from the area around the facilities in Halden and at Kjeller.

IFE has an environmental monitoring programme where samples are regularly collected and analysed from the areas surrounding the facilities in Halden and at Kjeller to monitor the radioactivity in the area. Area dosimeters have been placed beyond the perimeters of the plant sites to measure external radiation. In IFE’s area, air filter stations are in continuous operation, as well as test stations for collecting precipitation. IFE takes samples of grass, milk and agricultural products, in addition to collecting and analysing samples of water, sediments, aquatic plants and fish from permanent test sites in Nitelva, Tistedalselva and Iddefjorden.

Insurance for Board members and the president An insurance agreement has been signed covering Board members and the president of IFE. The insurance coverage is limited to NOK 50 million.

Future development IFE had positive results from the project applications submitted to the Research Council of Norway in 2021, and is still experiencing a high demand for research in its market areas. As a result, the turnover from research activity is expected to increase in 2022. IFE has yielded good results from infrastructure applications, the largest of which is the NABLA (Norwegian Advanced Battery Laboratory) application. Together with partners, IFE has applied for NOK

IFE ANNUAL REPORT 2021

166.4 million for the development of new infrastructure within battery research. This will enable IFE to establish state-of-the-art laboratories for this field of research at Kjeller. The radiopharmacy division is also experiencing considerable growth, and in 2021 secured a number of new customers. The growth brings a significant need for investment in the years ahead to enable further growth and the establishment of new customers within radiopharmaceuticals. The IFE foundation does not have the financial capacity to meet the investment needs from its own funds, and has therefore started to separate the radiopharmacy division into a separate limited company. By doing so, this part of the business can be financed from external funds without incurring a disproportionately high financial risk for the foundation’s other activities. For nuclear operations and safety, the focus will continue to be on strengthening safety and security, managing spent fuel and preparing for the transfer of facilities and personnel to NND. Through the grants for the operation of IFE’s nuclear facilities, the Ministry of Trade, Industry and Fisheries has provided a good financial framework for ensuring safety in recent years. The grants to IFE and NND for 2022 total NOK 780 million. In Prop. 1 S (2021-2022), the Government sets 1 January 2024 as the target date for the transfer of IFE’s nuclear facilities and associated organisation to NND. IFE believes it is important to facilitate as rapid a transfer as possible, both to ensure that a single organisation is responsible for security and studies, and in order to make strategic and short-term choices for a safe and socioeconomically justifiable decommissioning of Norwegian nuclear facilities and nuclear waste management. IFE and NND have calculated that the annual cost of stagnation in the nuclear clean-up process would amount to NOK 400 million. This is another reason why IFE believes it is important to transfer the activity as quickly as possible. Until 2021, IFE had a group pension scheme for all employees through the Norwegian Public Service Pension Fund (SPK), as described in note 12. This pension scheme will be continued for all employees associated with nuclear activities and who are part of the organisation that is to be transferred to NND. With effect from 1 January 2022, the foundation entered into a new pension agreement in DnB bank for other employees. This is a defined contribution scheme, which means that the foundation contributes 7.0% of the employees’ salaries between 0 and 7.1 G and 25.1% of the salaries between 7.1 and 12 G in the scheme. Employees contribute 2%. Employees under the age of 52 as of 1 January 2022 will automatically be transferred to the new defined contribution scheme in DnB, while employees over the age of 52 will be able to choose whether they want to remain in SPK or be transferred to the new scheme.

RESEARCH FOR A BETTER FUTURE

The war in Ukraine and the sanctions against Russia have led to increased economic uncertainty, as well as price increases and longer lead times for deliveries of raw materials and products. The risk of cyberattacks on Norwegian companies has also increased. The sanctions against Russia also mean uncertainty in relation to the export licence for spent fuel, which may affect the progress of the planned decommissioning of the reactors. IFE has significantly strengthened its efforts in IT security in recent years, and has implemented further measures as a result of the war. The energy sector is experiencing increased activity in both Norway and Europe. This has led to new research projects, and higher demand is expected in the future for IFE’s expertise in energy and decommissioning.

Report of the Board of Directors is electronically signed

Kjeller, 21 April 2022

Nils Morten Huseby

Olav Fjell

Jo Døhl

President

Chairman of the Board

Board Member

Josefine Helene Krogh Selj

Katrine Trovik

Marinus Isaac Hoffmann

Board Member

Ingvill Heskestad Mykland

Sven Sigfred Ordeus

Board Member

IFE ANNUAL REPORT 2021

KPMG AS Sørkedalsveien 6 Postboks 7000 Majorstuen 0306 Oslo

Telephone +47 45 40 40 63 Fax Internet www.kpmg.no Enterprise 935 174 627 MVA

Til styret i Institutt for energiteknikk

Uavhengig revisors beretning Konklusjon

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stiftelsesregnskapet, som består av balanse per 31. desember 2021, resultatregnskap og kontantstrømoppstilling for regnskapsåret avsluttet per denne datoen og noter til årsregnskapet, herunder et sammendrag av viktige regnskapsprinsipper, og

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konsernregnskapet, som består av balanse per 31. desember 2021, resultatregnskap og kontantstrømoppstilling for regnskapsåret avsluttet per denne datoen og noter til årsregnskapet, herunder et sammendrag av viktige regnskapsprinsipper.

Etter vår mening •

oppfyller årsregnskapet gjeldende lovkrav,

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gir stiftelsesregnskapet et rettvisende bilde av stiftelsens finansielle stilling per 31. desember 2021 og av dets resultater og kontantstrømmer for regnskapsåret avsluttet per denne datoen i samsvar med regnskapslovens regler og god regnskapsskikk i Norge, og

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gir konsernregnskapet et rettvisende bilde av konsernets finansielle stilling per 31. desember 2021 og av dets resultater og kontantstrømmer for regnskapsåret avsluttet per denne datoen i samsvar med regnskapslovens regler og god regnskapsskikk i Norge.

Grunnlag for konklusjonen Vi har gjennomført revisjonen i samsvar med de internasjonale revisjonsstandardene International Standards on Auditing (ISA-ene). Våre oppgaver og plikter i henhold til disse standardene er beskrevet nedenfor under Revisors oppgaver og plikter ved revisjonen av årsregnskapet. Vi er uavhengige av stiftelsen og konsernet slik det kreves i lov, forskrift og International Code of Ethics for Professional Accountants (inkludert internasjonale uavhengighetsstandarder) utstedt av the International Ethics Standards Board for Accountants (IESBA-reglene), og vi har overholdt våre øvrige etiske forpliktelser i samsvar med disse kravene. Innhentet revisjonsbevis er etter vår vurdering tilstrekkelig og hensiktsmessig som grunnlag for vår konklusjon.

Øvrig informasjon Styret og daglig leder (ledelsen) er ansvarlige for informasjonen i årsberetningen. Øvrig informasjon omfatter informasjon i årsrapporten bortsett fra årsregnskapet og den tilhørende revisjonsberetningen. Vår konklusjon om årsregnskapet ovenfor dekker ikke informasjonen i årsberetningen. I forbindelse med revisjonen av årsregnskapet er det vår oppgave å lese årsberetningen. Formålet er å vurdere hvorvidt det foreligger vesentlig inkonsistens mellom årsberetningen og årsregnskapet og den kunnskap vi har opparbeidet oss under revisjonen av årsregnskapet, eller hvorvidt informasjon i årsberetningen ellers fremstår som vesentlig feil. Vi har plikt til å rapportere dersom årsberetningen fremstår som vesentlig feil. Vår gjennomgang av stiftelsens redegjørelse om likestilling og ikkediskriminering etter likestillings- og diskrimineringsloven § 26 a viser at resultatene av lønnskartleggingen ikke er omtalt.

RESEARCH FOR A BETTER FUTURE

Penneo Dokumentnøkkel: E4AEW-EEQFO-IYKGE-WH1U0-6PSYK-15SMZ

Vi har revidert Institutt for energiteknikks årsregnskap, som består av:

Uavhengig revisors beretning - Institutt for energiteknikk

Basert på kunnskapen vi har opparbeidet oss i revisjonen, mener vi at årsberetningen, med unntak av forholdet beskrevet i avsnittet over •

er konsistent med årsregnskapet og

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inneholder de opplysninger som skal gis i henhold til gjeldende lovkrav.

Ledelsens ansvar for årsregnskapet Ledelsen er ansvarlig for å utarbeide årsregnskapet og for at det gir et rettvisende bilde i samsvar med regnskapslovens regler og god regnskapsskikk i Norge. Ledelsen er også ansvarlig for slik intern kontroll som den finner nødvendig for å kunne utarbeide et årsregnskap som ikke inneholder vesentlig feilinformasjon, verken som følge av misligheter eller utilsiktede feil.

Penneo Dokumentnøkkel: E4AEW-EEQFO-IYKGE-WH1U0-6PSYK-15SMZ

Ved utarbeidelsen av årsregnskapet er ledelsen ansvarlig for å ta standpunkt til stiftelsen og konsernets evne til fortsatt drift og opplyse om forhold av betydning for fortsatt drift. Forutsetningen om fortsatt drift skal legges til grunn for årsregnskapet så lenge det ikke er sannsynlig at virksomheten vil bli avviklet. Revisors oppgaver og plikter ved revisjonen av årsregnskapet Vårt mål er å oppnå betryggende sikkerhet for at årsregnskapet som helhet ikke inneholder vesentlig feilinformasjon, verken som følge av misligheter eller utilsiktede feil, og å avgi en revisjonsberetning som inneholder vår konklusjon. Betryggende sikkerhet er en høy grad av sikkerhet, men ingen garanti for at en revisjon utført i samsvar med ISA-ene, alltid vil avdekke vesentlig feilinformasjon som eksisterer. Feilinformasjon kan oppstå som følge av misligheter eller utilsiktede feil. Feilinformasjon blir vurdert som vesentlig dersom den enkeltvis eller samlet med rimelighet kan forventes å påvirke økonomiske beslutninger som brukerne foretar basert på årsregnskapet. Som del av en revisjon i samsvar med ISA-ene, utøver vi profesjonelt skjønn og utviser profesjonell skepsis gjennom hele revisjonen. I tillegg: •

identifiserer og vurderer vi risikoen for vesentlig feilinformasjon i regnskapet, enten det skyldes misligheter eller utilsiktede feil. Vi utformer og gjennomfører revisjonshandlinger for å håndtere slike risikoer, og innhenter revisjonsbevis som er tilstrekkelig og hensiktsmessig som grunnlag for vår konklusjon. Risikoen for at vesentlig feilinformasjon som følge av misligheter ikke blir avdekket, er høyere enn for feilinformasjon som skyldes utilsiktede feil, siden misligheter kan innebære samarbeid, forfalskning, bevisste utelatelser, uriktige fremstillinger eller overstyring av internkontroll.

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opparbeider vi oss en forståelse av den interne kontroll som er relevant for revisjonen, for å utforme revisjonshandlinger som er hensiktsmessige etter omstendighetene, men ikke for å gi uttrykk for en mening om effektiviteten av stiftelsen og konsernets interne kontroll.

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evaluerer vi om de anvendte regnskapsprinsippene er hensiktsmessige og om regnskapsestimatene og tilhørende noteopplysninger utarbeidet av ledelsen er rimelige.

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konkluderer vi på hensiktsmessigheten av ledelsens bruk av fortsatt drift-forutsetningen ved avleggelsen av årsregnskapet, basert på innhentede revisjonsbevis, og hvorvidt det foreligger vesentlig usikkerhet knyttet til hendelser eller forhold som kan skape tvil av betydning om stiftelseets og konsernets evne til fortsatt drift. Dersom vi konkluderer med at det eksisterer vesentlig usikkerhet, kreves det at vi i revisjonsberetningen henleder oppmerksomheten på tilleggsopplysningene i årsregnskapet, eller, dersom slike tilleggsopplysninger ikke er tilstrekkelige, at vi modifiserer vår konklusjon. Våre konklusjoner er basert på revisjonsbevis innhentet inntil datoen for revisjonsberetningen. Etterfølgende hendelser eller forhold kan imidlertid medføre at stiftelsen og konsernet ikke fortsetter driften.

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evaluerer vi den samlede presentasjonen, strukturen og innholdet i årsregnskapet, inkludert tilleggsopplysningene, og hvorvidt årsregnskapet gir uttrykk for de underliggende transaksjonene og hendelsene på en måte som gir et rettvisende bilde. IFE ANNUAL REPORT 2021

Uavhengig revisors beretning - Institutt for energiteknikk

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innhenter vi tilstrekkelig og hensiktsmessig revisjonsbevis vedrørende den finansielle informasjonen til enhetene eller forretningsområdene i konsernet for å kunne gi uttrykk for en mening om det konsoliderte regnskapet. Vi er ansvarlige for å lede, følge opp og gjennomføre konsernrevisjonen. Vi alene er ansvarlige for vår revisjonskonklusjon.

Vi kommuniserer med styret blant annet om det planlagte omfanget av revisjonen og til hvilken tid revisjonsarbeidet skal utføres. Vi utveksler også informasjon om forhold av betydning som vi har avdekket i løpet av revisjonen, herunder om eventuelle svakheter av betydning i den interne kontrollen.

Uttalelse om andre lovmessige krav Konklusjon om forvaltning

Oslo, 14. juni 2022 KPMG AS

Ole Christian Fongaard Statsautorisert revisor (elektronisk signert)

RESEARCH FOR A BETTER FUTURE

Penneo Dokumentnøkkel: E4AEW-EEQFO-IYKGE-WH1U0-6PSYK-15SMZ

Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, og kontrollhandlinger vi har funnet nødvendige i henhold til internasjonal standard for attestasjonsoppdrag ISAE 3000, Attestasjonsoppdrag som ikke er revisjon eller forenklet revisorkontroll av historisk finansiell informasjon, mener vi at stiftelsen er forvaltet i samsvar med lov, stiftelsens formål og vedtektene for øvrig.

IFE ANNUAL REPORT 2021

KJELLER PO Box 40, 2027 Kjeller Visiting address Instituttveien 18, Kjeller Tel.: +47 63 80 60 00

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firmapost@ife.no • www.ife.no facebook.com/energiteknikk @ife_norway Institute for Energy Technology @humansofife

RESEARCH FOR A BETTER FUTURE