London and Washington The only company that offers the fuel those American companies need to build the next generation of modest nuclear power plants to reduce carbon emissions is Russian.
Because of this, the U.S. government is scrambling to find ways to use some of its arsenal of weapons-grade uranium to power new, cutting-edge reactors and launch an industry that it views as essential for nations to reach their net-zero emissions targets internationally.
According to a U.S. Department of Energy (DOE) spokeswoman, “Production of HALEU is a critical mission and all efforts to expand its production are being studied.”
As a result of the energy crisis brought on by the conflict in Ukraine, nuclear power is once again gaining popularity as a source of energy. People like the idea of smaller, next-generation reactors because they are more efficient, easier to build, and could speed up the move away from fossil fuels.
But developers are concerned that they won’t get orders for their facilities if there isn’t a consistent source of the high assay low enriched uranium (HALEU) the reactors require. Also, companies that could supply fuel to replace Russian uranium are hesitant to start up commercial supply networks without orders.
The DOE spokeswoman said, “We know that quick action is needed to help a stable, market-driven supply of HALEU grow.”
According to the spokeswoman, the US government is currently deciding how much of its 585.6 tonnes of highly enriched uranium should be used in reactors.
Washington has always been worried about Russia’s monopoly on HALEU, but the conflict in Ukraine has changed the situation because neither the government nor the companies making the new, highly advanced reactors want to be dependent on Moscow.
HALEU is enriched up to 20%, as opposed to the uranium used in the majority of nuclear power plants, which is enriched only about 5%. But right now, TENEX, a branch of Rosatom, the Russian government’s nuclear energy company, is the only company that sells HALEU for business.
Since Ukraine is crucial to the global nuclear sector, Western nations have not imposed sanctions on Rosatom. However, American power plant developers like X-energy and TerraPower do not want to rely on a Russian supply chain.
According to Jeff Navin, director of external affairs for TerraPower, whose chairman is billionaire Bill Gates, “We didn’t have a fuel problem until a few months ago.” “We did not feel comfortable doing business with Russia after the invasion of Ukraine.”
EGG AND CHILI
Around 10% of the world’s electricity is currently produced by nuclear energy, and several nations are currently looking into new nuclear projects to increase their energy security and supply, as well as help them reach their targets for reducing greenhouse gas emissions.
However, given that large-scale projects continue to face difficulties due to factors such as prohibitive up-front costs, project delays, cost overruns, and competition from less expensive energy sources like wind, some developers have suggested “compact modular reactors” (SMR).
Nine out of ten of the advanced reactors sponsored by Washington are HALEU-based, in contrast to the SMRs offered by businesses like EDF (EPA:EDF) and Rolls-Royce (OTC:RYCEY), which employ current technology and the same fuel as conventional reactors.
These cutting-edge plants, according to their supporters, are three times more efficient than conventional models and require less frequent refuelling. Even though the designs haven’t been tested in the commercial world very much yet, some analysts think that this means they will eventually be better than traditional nuclear technology.
The Energy Innovation Reform Project, a research group, says that the average levelized cost of electricity, which is the cost at which advanced projects must operate to break even, is $60 per megawatt-hour, while it is $97 for conventional plants.
According to some analysts, the price gap may currently be smaller because HALEU’s smaller advanced reactors do not yet benefit from economies of scale brought about by mass manufacturing.
Even in the best-case circumstances, companies in the US and Europe say it would take at least five years from the point they decided to move forward to develop HALEU on a commercial scale.
Additionally, this chicken-and-egg problem makes it more difficult for the HALEU supply to grow smoothly.
According to Centrus Energy (NYSE:LEU) Corp. CEO Daniel Poneman, “Nobody wants to order 10 reactors without a fuel source, and nobody wants to invest in a fuel source without 10 reactor orders.”
Energy Northwest, a public utility in Washington state, and other companies that want to build new, more advanced reactors have to think about fuel supplies when making decisions.
In an email, the company said that “a reliable HALEU supply is one of many things being thought about.”
Optional Supplies
Years ago, the U.S. government realised that Russia’s monopoly on HALEU might impede the creation of the advanced reactors it hopes will supply low-carbon energy both domestically and to markets in Europe and Asia.
Centrus is the only company outside of Russia that has a licence to make HALEU. In 2019, the government gave Centrus a shared-cost contract to build a demonstration facility.
The facility was supposed to start making HALEU this year, but that won’t happen until 2023. According to Centrus, this is partly because it’s hard to get storage containers because of problems with the supply chain during the global pandemic.
It will take five years for Centrus to begin producing 13 tonnes of HALEU annually once the facility is operational. However, the DOE estimates that by 2030, only a third of that amount will be required for American reactors.
TerraPower, for example, thought that it would need 15 tonnes of HALEU for the first load of fuel for its advanced reactor.
Other prospective HALEU producers lag behind more.
Orano, a French state-owned uranium mining and enrichment company, claims that it could begin producing HALEU in five to eight years, but it won’t do so until it has long-term contracts with customers before applying for a production licence.
Orano said it would be up to the U.S. government to jump-start the industry in response to a DOE request for information on how to establish a programme to support HALEU production.
The DOE’s guaranteeing a specific volume of demand is the single most crucial factor, according to Orano’s assessment, the company said in a statement on its website.
But Urenco, a European company that enriches uranium, says that it is still thinking about where to make HALEU in the United States and in Great Britain.
Time is ticking.
Time is running out for TerraPower and X-energy, which have projects planned in Wyoming and Washington, respectively, and other U.S. states.
Washington gave them contracts and agreed to split the cost of building two demonstration rectors by 2028. But if Russian fuel isn’t available, that deadline will pass long before any other commercial suppliers can start up.
Although HALEU’s 20% enrichment level is considerably lower than the roughly 90% level required for weapons, businesses need special permits to produce it. The places where fuel is made, how it is packaged, and how it is moved all need to meet higher security and certification standards.
The U.S. government is attempting to “down blend” weapons-grade, highly enriched uranium that is currently in its stockpile, but that will also take time.
The American government reported in 2016 that between September 30, 2013, and March 31, 2016, it had downblended 7.1 tonnes. The DOE responded when asked this month if the procedure had gotten any quicker: “Downblending rates are consistently evaluated for acceleration opportunities.”
In August, US President Joe Biden signed the Inflation Reduction Act, which gave the government $700 million to buy HALEU supplies from a consortium that works with the DOE for use in research and advanced reactors.
In order to increase domestic supplies of low enriched uranium and HALEU and address potential access issues with Russian fuel, the White House requested an additional $1.5 billion from Congress in a temporary government funding bill in September.
Some Biden officials, like Energy Secretary Jennifer Granholm, still think the measure is important, but lawmakers took it out of the bill because they were worried about how much it would cost.
According to the U.S. Energy Information Administration, nuclear power plants in the United States imported about 14% of their uranium from Russia and 28% of their enrichment services last year.
