Fueling America’s Nuclear Energy Leadership
The availability of high-assay, low-enriched uranium (HALEU) will be a deciding factor in whether the United States leads the world in the development of advanced nuclear reactors or watches from the sidelines as foreign competitors dominate the marketplace. Because most advanced reactors will require HALEU to operate, Congress and federal agencies need to ensure that it will be commercially available when the first wave of advanced reactors hits the market.
Interest in advanced nuclear reactors has grown tremendously over the past several years—and for good reason. For one, advanced reactors could be a significant source of carbon-free power to help us hit our climate goals. Advanced reactors also have the potential to jumpstart the US domestic nuclear industry, creating jobs and lucrative export opportunities. This expanded presence in the global nuclear market, in turn, would allow the US to continue to influence nuclear safety, security, and nonproliferation norms around the world. So it’s safe to say that getting advanced nuclear over the finish line would be a big win for several national priorities.
The good news is that there are over 70 advanced nuclear projects underway in the US and a number of these have already passed significant commercial milestones in the deployment process. DOE partnerships have provided millions of dollars of support and expertise to these companies through programs such as GAIN and ARPA-E. A few front-runners have already signed agreements with suppliers and potential customers. And some are already working with the US Nuclear Regulatory Commission (NRC) on design and licensing issues. But underneath all this good news is a problem that could potentially stop many of these projects in their tracks: the US doesn’t have a guaranteed, long-term supply of the fuel many advanced reactors will need to operate.
This memo explains the importance of high-assay, low enriched uranium (HALEU) to America’s success in the advanced nuclear industry, offers a quick look at the barriers to securing this fuel supply, and suggests steps Congress and federal agencies should take to overcome them.
What is HALEU and why do we need it?
A key ingredient in most nuclear fuel is uranium-235, an isotope which can split or “fission”, releasing the energy that nuclear power plants turn into electricity. Natural uranium has a concentration or “assay” of around 0.7 percent by weight of U-235. For most commercial nuclear fuels, this concentration needs to be increased through a process called “enrichment” to achieve levels that will produce a sustained fission reaction.1 Uranium is considered “low enriched” as long as it contains less than 20 percent U-235. Most nuclear reactors operating around the world today use fuel that is enriched to less than 5 percent. HALEU, on the other hand, is enriched to between 5 and 20 percent.
HALEU fuel could be used to increase the fuel “burnup” in existing reactors, essentially boosting their fuel efficiency. In fact, owners of some existing plants are giving serious consideration to increasing enrichment to about 6.5%. The industry is taking advantage of this feature to develop advanced reactors which could operate well in remote locations, with lower staffing requirements and less expense. HALEU is enabling designs that could, for example, operate underground for decades without refueling and produce more manageable waste streams—both features could reduce security and proliferation risks and associated costs.
But absence of HALEU would cause more than just reduced performance or the loss of some very important advantages of advanced reactor designs. Without HALEU, a large number of the emerging advanced reactor designs will not be able to operate at all. Without a dependable, commercially available supply of HALEU, even the most promising US reactor designs could be dead in the water.
Even though the first wave of US advanced reactors will probably not be deployed until the mid-2020s, we need to develop a robust domestic HALEU supply to assure investors and prospective utility customers that a fuel source will exist when needed. This is because building adequate HALEU infrastructure will be a multi-year process in itself.2 If investors don’t see progress on a long-term solution to the HALEU problem, they may perceive advanced nuclear as a dead-end industry, and be reluctant to provide the financial support needed to get these promising projects across the deployment finish line.
How can we get it?
There are a few different pathways to procuring HALEU, each with its own benefits and drawbacks.
1. Using US HEU Stockpiles and Spent Nuclear Fuel
Uranium enriched to levels above 20 percent is known as highly enriched (HEU). A small number of research reactors use HEU, but because they are primarily for military and/or nuclear weapons applications, they are subject to higher security-related controls. There are thousands of tons of declared HEU stockpiled around the world—a lasting legacy of the Cold War.3 In the US, HEU is managed by the National Nuclear Security Administration (NNSA), a semi-autonomous agency within the DOE.
HEU can be mixed with natural uranium or depleted uranium to decrease the U-235 concentration to a desired level through a process called “downblending.” In the US, the NNSA oversees this downblending, occasionally releasing limited quantities of HEU that can be converted to HALEU for use in research reactors, test reactors, and a few select other purposes.4 A cohesive strategy is needed to identify an appropriate quantity of HEU that could be set aside to provide HALEU for advanced reactor testing and early stage commercial operations as the industry grows.
Another option that DOE is pursuing is to recycle spent nuclear fuel from US naval reactors. The US Navy’s submarines and aircraft carriers are powered with highly enriched uranium to maximize the time between refueling and minimize the reactors’ weight and volume.5 After this fuel is used or “spent,” it still contains highly enriched material which can be extracted, purified, and downblended into HALEU. Moreover, the Department plans to take spent fuel from a closed research reactor at INL and fabricate it into HALEU. This will be used to support near-term advanced reactor research within the public and private sector.
On the surface, these methods seem like a win-win: they could reduce global stockpiles of weapons-grade materials and nuclear waste while creating a supply of HALEU for an emerging new industry. But at the end of the day, both downblending and recycling are stop-gap measures.
With a downblending-only approach, HEU stockpiles that could potentially be earmarked for HALEU production would probably only be enough for a small number of reactors and certainly could not support large-scale, long-term deployment. The DOE estimates that the available HALEU supply for research purposes would run out by 2035. Supplies could be exhausted significantly earlier if HALEU is used to support the development of advanced reactors, although, no such plans have been made. Because NNSA’s HEU stockpile is finite and its primary mandate is centered on national security, downblending from HEU could never produce a sufficient supply of fuel for advanced reactors. There is limited predictability as to when and how much HEU will be available in a given round of downblending—NNSA can revise this amount at any time for national defense or economic reasons. Even if the amount of commercial HALEU could be supplemented by reprocessing spent naval fuel, we’d still be facing a long-term supply shortage that would discourage investors and utilities from committing to advanced reactors.
While downblending and/or reprocessing may be a useful bridge-solution to provide the limited supply of HALEU needed for advanced nuclear testing and possibly fueling the first few commercial reactors, the success of a full-fledged advanced reactor fleet will require a more permanent and reliable solution.
2. Importing HALEU
Importantly, Russia and other countries are also developing advanced reactors and the HALEU enrichment infrastructure needed to support them. If US advanced reactors are ready for deployment before we’ve established a long-term domestic HALEU source, we may be able to enter agreements to purchase HALEU from abroad as long as the HALEU is not used for any military purpose. Longstanding, binding nonproliferation commitments preclude us from using any foreign enrichment technology for national security purposes. The potential supply of HALEU available for import could be more than enough to fuel the first wave of US advanced reactors for their entire lifetime, but if a country decides to stop selling us HALEU, we’d be facing another supply disruption.
Moreover, relying on another country’s HALEU to fuel our reactors would do very little to revitalize US domestic nuclear industrial capabilities, which have been on a downward trajectory in recent years (more on this below). There are also a number of technical, logistical and regulatory issues that are unique to shipping HALEU (especially after it has been enriched but before it has been fabricated into fuel) which might make importing HALEU from overseas much less attractive. Finally, the lack of a domestic HALEU source could put US advanced reactor developers at a significant disadvantage in the global market in which foreign competitors will be backed by state-owned enrichment enterprises and can offer an “all in one” solution for fuel and reactors.
3. Domestic Enrichment
The previous two sections have hinted at something that deserves emphasis here: The US has a very limited domestic capability to enrich uranium. There’s currently only one commercial uranium enrichment plant located in the United States6. Theoretically, this facility has the potential to add capacity to produce HALEU for commercial purposes. Currently, the facility’s NRC license only allows for enrichment to a maximum of 5 percent. At a May 2018 congressional hearing, it was made clear that an amendment to the company’s NRC license would enable it to construct, commission, and start-up a HALEU enrichment module within 24 months. However, the HALEU will not be able to be used for defense purposes because this particular facility is foreign owned and uses foreign technology.7
But even if the US develops a commercial HALEU enrichment capacity, we’ll need to develop, test, and regulate new methods of fabricating and transporting higher assay fuels in order to form a complete supply chain. It’s not that these challenges can’t be overcome. The problem is that these solutions require investments at a time when the economic incentive to mine, convert, or enrich uranium in the US has been drastically reduced. An excess of supply of traditional nuclear fuels and ongoing production by state-run enrichment operations in Europe and Asia have created a soft market for the past several years and left the entire domestic supply chain for nuclear fuel in a weakened financial position. On a purely commercial basis, market prices for nuclear fuel are too low to support private sector investments in new enrichment capacity, let alone the investments in a HALEU market that doesn’t exist yet.
So it’s a classic chicken-or-egg situation: Fuel suppliers and commercial lenders need more certainty that the advanced nuclear industry will materialize before they’re willing to invest in the fuels needed to get this new industry up and running. Unless steps are taken to reduce this risk, fuel suppliers are unlikely to move ahead with HALEU enrichment on their own on a timescale that works for US advanced reactor developers.
What can the US government do to support a HALEU fuel cycle?
Developing HALEU production pathways is essential to the success of the US advanced nuclear industry. Supplying the reactors and nuclear fuel of the future also ensures a strong role for the United States in setting global standards for safety, security and nonproliferation. The good news is that there are a number of policy steps that can be taken now to pave the way for a full-fledged US HALEU fuel cycle in the future.
1. Congress can support a domestic uranium enrichment capability and supply chain, starting with HALEU production in the 2020’s
DOE has the facilities, personnel, and expertise to implement HALEU initiatives, but Congress will need to dedicate and secure funding for a domestic uranium enrichment capability to create a concrete, long-term solution and path forward for the specialized fuel. While DOE’s efforts to create a HALEU supply out of HEU stockpiles and spent fuel is a great start, it will not supply the advanced nuclear fleet sufficiently or provide the long-term certainty that utility customers would require before agreeing to build the reactors.
Investments of this type aren’t a novel idea. In fact, most of the world’s existing enrichment plants were financed and built by foreign governments and/or their state-owned corporations. Even the domestic enrichment plants the US once had were built by Presidents Roosevelt, Truman and Eisenhower for the US military. For decades, the US role as the dominant supplier of reactors and fuel allowed us to establish high standards of safety, security, and nonproliferation around the world. A well-defined and well-funded federal program will be crucial to ensuring a domestic enrichment capability that can place the US back in a leadership role.
For example, Congress could direct the DOE to offer financial incentives to the existing uranium enrichment facility in the US to add HALEU production to its current capabilities. Providing support to the facility’s license amendment efforts could help jumpstart the two-year process and make HALEU available sooner than currently scheduled. Additionally, DOE could incentivize HALEU production at a US-owned facility for both commercial and defense purposes, which could offer efficiency of scale and other cost-savings opportunities. For instance, DOE announced plans in January for a demonstration-scale project that aims to validate the ability of US enrichment technology to produce HALEU. Since uranium enrichment centrifuges are a modular technology, the plant could be incrementally expanded with private financing as commercial demand for HALEU fuel develops.
Whether one or both of these options moves forward, these activities will require multiple years of guidance and funding from Congress. We have the opportunity to be a major player again with advanced reactors and the fuels that are needed to operate them, but if we miss it, we could end up spending the next 60 years watching from the sidelines.
2. DOE and NRC can accelerate progress in HALEU transportation and fuel fabrication processes
Even with a decision to go-ahead with establishing a capability to enrich to higher uranium concentrations, we will still need a focused effort to design, license, and develop safe HALEU transportation and fuel fabrication methods. DOE should invest in the development of HALEU transportation packages well before HALEU is ready to ship to advanced reactor plants. Also, NRC regulations governing security and the transportation of HALEU still need to be developed and finalized. This step is vital, as the availability of HALEU is meaningless if it cannot be safely and securely transported to fuel fabrication facilities, and ultimately, commercial customers. The need for a new transportation package from the enrichment plant to the fabrication facility could be sidestepped by co-locating the facilities, but ultimately a full range of HALEU transportation packages need to be developed to allow for safe, efficient, transportation at each step in the process.8
3. Congress can help reduce financing costs for nuclear fuel infrastructure
Legislation discussed in the past several congresses could be amended to help finance a HALEU fuel supply chain. Currently, only a limited number of energy industries like oil and gas are able to take advantage of a very beneficial tax treatment called a Master Limited Partnership (MLP), which has helped incentivize billions of dollars in pipelines and other energy infrastructure. The MLP Parity Act aims to expand eligibility to a wider variety of energy projects, including wind, solar, biofuels, and carbon capture. Ideally, this definition could be expanded even further to include advanced nuclear reactors and associated fuel cycle infrastructure. This change would go a long way toward making HALEU a viable investment opportunity.
Support for HALEU in Congress
The Nuclear Energy Leadership Act (NELA) was re-introduced in March of 2019 by Senators Cory Booker and Lisa Murkowski, along with a bipartisan group of 16 cosponsors. NELA aims to reduce several of barriers to the advanced nuclear industry—including access to specialized fuels. Among other provisions, NELA directs the Secretary of Energy to establish a program to make HALEU available for commercial use in advanced reactors and evaluate how it can meet defense-related needs. Additionally, the bill will instruct the Secretary of Energy to issue competitive awards to the private sector to develop transportation packages for HALEU to allow licensed and efficient transportation of HALEU to advanced reactors. If enacted, this bill could create a formal process to develop a HALEU supply in support of the national security functions of the Department of Defense and National Nuclear Security Administration, while simultaneously boosting US leadership in the advanced reactor market.
In the House of Representatives, Congressman Bill Flores recently introduced the Advanced Nuclear Fuel Availability Act to create a program at DOE to develop and deploy a supply of HALEU for commercial use. This bill will establish a public-private partnership solution to advance the fuels needed for the next generation of nuclear reactors.
To have a real shot at re-establishing a US presence in the global nuclear enterprise, Congress and federal agencies need to act decisively to support a wide range of US advanced nuclear endeavors. A mandate for a domestic enrichment capability and public-private partnerships for the development of advanced nuclear fuel are vital elements of a winning strategy. The US has the innovative capacity to successfully design a range of advanced reactors, but we need to pay equal attention to development of the HALEU fuels needed to operate them. Though HALEU is just one piece of the advanced nuclear puzzle, it has the potential to make or break the industry before the first new reactor even gets built.