The Department of Energy on Monday released two draft requests for proposals aimed at building out a U.S. supply chain for the specialized uranium fuel needed for the next generation of advanced nuclear reactors that it is also helping to build.
The RFPs will allow DOE to acquire high-assay, low-enriched uranium (HALEU), which it will then distribute or sell to companies that are part of its HALEU Consortium of industry stakeholders, to be used “for civilian domestic research, development, demonstration and commercial use.”
HALEU has higher levels of the radioactive U-235 isotope — up to 20% versus the 3-5% low-enriched uranium used in commercial reactors now in operation — allowing for smaller and more efficient reactors that may not need to be refueled as often and produce less nuclear waste.
Two advanced reactors being developed with more than $3 billion in DOE funding — TerraPower’s Natrium reactor and X-energy’s Xe-100 reactor — will need HALEU, but the U.S. currently does not have the ability to produce the special fuel at scale. The only commercial facility producing HALEU is in Russia, and with the outbreak of the war in Ukraine, U.S. companies like TerraPower have had to look for other sources of the fuel.
The lack of a domestic HALEU supply could delay completion of the Natrium reactor in Wyoming by two years, according to a December announcement from TerraPower CEO Chris Levesque. When the DOE originally selected TerraPower and X-energy for the demonstration projects in 2020, the advanced reactors were supposed to be online in seven years.
“We must jump-start a commercial-scale, domestic supply chain for HALEU,” said Kathryn Huff, DOE’s assistant secretary for nuclear energy. “Spurring the nation’s capability to produce HALEU will set the stage for larger, commercial scale production. This will bring us closer to deploying advanced nuclear technologies in communities across the country.”
“This is … a really important first step in getting this market going,” said Patrick White, project manager at the Nuclear Innovation Alliance. The need to build out the HALEU supply chain “is something we’ve known about for years, but we just haven’t had the right economic conditions.”
The war in Ukraine, coupled with $700 million in the Inflation Reduction Act earmarked for U.S. production of HALEU have provided some of the momentum.
According to the DOE announcement, more than 40 metric tons of HALEU may be needed by 2030, with additional amounts required each year, to meet President Joe Biden’s goal of decarbonizing the U.S. electric power system by 2035.
At present, the only facility licensed to produce HALEU in the U.S. is a DOE-funded demonstration project at a Centrus Energy facility in Piketon, Ohio, which is on schedule to begin production at the end of this year, according to Lindsey Geisler, director of corporate communications.
Incentivizing the Market
The existing U.S. commercial nuclear fleet of 92 reactors provides 20% of all the electric power in the country and 50% of zero-emission electricity. While still controversial for some, maintaining and expanding nuclear capacity is part of Biden’s and DOE’s clean energy agenda.
DOE is dividing its efforts to build the HALEU supply chain into two key and complementary initiatives. The first of the two RFPs is focused on the enrichment process, taking mined and milled uranium and stepping up its enrichment from the 0.7% of U-235 that occurs in nature to between 5% and 20%, White said.
The process involves putting the milled uranium, called yellow cake, through a series of centrifuges that gradually step up the enrichment level, he said.
U-235 is a “fissile” isotope of uranium, which means it can sustain the kind of nuclear chain reaction needed to power a commercial reactor and produce electricity. Weapons-grade uranium is about 90% U-235.
The second RFP seeks companies for a process called “deconversion,” which takes the stepped-up uranium and puts it through a chemical process that turns it into a pure metal or other solid feedstock that can then be turned into the fuel that can power a reactor.
“The availability of HALEU is a bit of a chicken-and-egg problem,” White said. “It’s hard to set up an industry and make significant capital investments if you don’t know what the long-term demand is, and it’s hard to have long-term demand if you don’t know what your supply is.
“And so, by the U.S. DOE coming in and guaranteeing purchases for these first amounts of HALEU, it can hopefully incentivize private companies to stand up their production capabilities and then allowing private companies to start buying what comes off the line,” he said.
The release of the draft RFPs on Monday began a month-long comment period ending on July 6.
DOE is also launching an environmental review of the proposed HALEU supply chain buildout in compliance with the National Environmental Policy Act. A notice of intent for the review was published Monday in the Federal Register.
White noted that the environmental review could slow down the supply chain buildout. In particular, the RFP focused on enrichment only allows for initial planning, permitting and licensing until the environmental review is completed.
The RFPs also limit DOE’s ability to award contracts related to the $700 million for HALEU authorized in the IRA, but both White and Geisler said additional funding will be needed.
“The Inflation Reduction Act represents a strong initial down payment, but there is broad agreement in the industry that additional funding will be required to establish the domestic HALEU supply chain necessary to commercialize the next generation of advanced reactors,” Geisler said in an email to NetZero Insider.
With long lead times for building out each part of the supply chain, “getting this process started and making sure it keeps moving is really critical,” White said. “Let’s get through the draft solicitation process, provide feedback that allows DOE to quickly iterate and then move forward with it because the last thing we want is for this RFP process to take another six months or a year.”
