The light water reactor nuclear fuel market represents more than 80% of the operating nuclear power plants in the world. In most situations non-LWR fuel is provided on an indigenous, non-competitive basis. There are currently 359 LWRs in operation: 271 pressurized water reactors (including the Russian VVER designs) and 88 boiling water reactors. Within PWRs, there are 15-20 distinct market sectors, which are distinguished from one another by the design of the nuclear steam supply system (NSSS) and by the fuel assembly lattice configuration.

Fuel reliability continues to be of primary concern in commercial LWRs. In the US, there has been significant effort placed on meeting the Institute of Nuclear Power Operations’ (INPO) stated goal for zero fuel defects in all operating plants by 2010. This is a goal that the industry has come very close to achieving thanks to the implementation of guidelines to address known fuel failure mechanisms.

The Electric Power Research Institute (EPRI) and INPO developed the guidelines, together with the Nuclear Energy Institute (NEI), nuclear power plant operators and fuel fabricators worldwide. By mid-2009 US utilities had implemented guidelines on PWR corrosion and crud, BWR corrosion and crud, grid-to-rod fretting (GTRF), pellet-cladding interaction (PCI) and fuel surveillance and inspection practices. The industry guidelines for foreign material exclusion (FME) have also been updated to include additional practices that have direct benefits for fuel reliability.

In September 2010, EPRI reported that 90% of all US nuclear power plants were operating without fuel failures; a significant improvement over 2007 when that figure was 70%. EPRI has since released information on the causes of fuel failures from 2000 to 2008 (Figure 1); over this period just 3% of failures were due to fabrication.

Fuel failures 2000-2008

Figure 1: Causes of fuel failures, 2000-2008 (Source: EPRI)

Ongoing concerns about fuel performance at high discharge exposure and the industry-wide push for zero fuel failures are likely to restrict increases in discharge exposure beyond present levels (estimated at 48 GWd/t in 2010) in the near term. If discharge exposures were to be pushed higher, then assays in excess of 5.0 weight percent (w/o) uranium-235 would ultimately be required. This would raise a broad range of logistical and licensing-related issues for enrichment facilities, fabrication facilities and transportation. In addition, ultra-high exposure fuel would create significant issues associated with spent fuel storage, transport and disposal.

With decisions by Areva and Westinghouse to participate through direct equity investments in two of the Japanese fuel fabricators (Mitsubishi Nuclear Fuel and Nuclear Fuel Industries, respectively) and the decision by Westinghouse to install a minimal level of BWR fuel manufacturing capability in its US fuel manufacturing facility, each of the principal BWR and PWR fuel suppliers now has manufacturing facilities in the US, Europe and Asia.


Since the limiting factor in fuel fabrication plant manufacturing throughput is generally the capacity to convert uranium hexafluoride (UF6) to uranium dioxide (UO2) powder, unless noted otherwise, this will be the basis for the numbers presented in this article. While such UF6 to UO2 powder conversion–also referred to as reconversion–capacity is more than adequate on a world basis, it is not distributed in a manner that allows it to meet local requirements in some geographical areas. The significant shortage of existing fuel fabrication capacity in Japan and the excess of capacity in the USA and Europe are the most notable examples of geographical imbalance. However, as long as international trade in these materials continues unencumbered, such imbalances should not create supply problems in any market.

Under the ERI reference forecast, which reflects the expected impact of the Fukushima Daiichi accident, world LWR fuel fabrication requirements are expected to increase gradually from about 6590 metric tons of uranium (MTU) in 2010, reaching almost 11,200 MTU by 2030. This represents an average annual increase of 2.7% and a total increase of 70% over LWR fuel fabrication requirements in 2010. The projected long-term effect of the Fukushima Daiichi accident is an estimated reduction in requirements of between 3% and 5%.

LWR fuel fabrication requirements are fairly well-distributed on a geographical basis and have been reasonably stable during the last several years. Approximately 31% of world requirements arise in Western Europe, 30% arise in the US, about 27% in East Asia, with the remaining 12% in Eastern Europe, the CIS and elsewhere. However, by 2020 it is expected that this distribution will shift dramatically. At that point, the US and Western Europe are each expected to account for around 23% of world LWR fuel fabrication requirements, while East Asia requirements, as driven by the dramatic expansion of nuclear power in China, will have increased to 37% of total world requirements.

Table 1 shows the projected annual requirements for fuel fabrication services in different geographical regions based on the ERI reference forecast. In Western Europe, annual requirements for LWR fuel fabrication services are expected to immediately drop (due to German nuclear exit) from approximately 2040 MTU in 2010 to around 1900 MTU, and are likely to remain at this level for the next five years, before increasing slowly to reach 2260 MTU by 2030. Annual requirements for LWR fuel fabrication services in East Asia are expected to increase steadily from approximately 1770 MTU in 2010 to 2250 MTU by 2015, 3220 MTU by 2020, and then to 4300 MTU by 2030.

Three main suppliers

Today, there are three principal LWR fuel fabricators, each with significant ownership in fuel fabrication facilities in Europe, the US and Asia. They are Areva, Global Nuclear Fuel, and Westinghouse Electric Company. In total, these three companies have approximately 8030 MTU of annual UO2 powder production capacity at their facilities around the world. Other fuel fabricators, which play critical roles in specific countries and regions, may in the future play a larger role on a worldwide basis.

Areva is a fully-integrated fuel manufacturer. It operates three fuel fabrication facilities in Europe as well as several plants in France and Germany that produce zirconium alloys and fuel assembly components. Until earlier this year, the company had been operating two fuel fabrication facilities in the USA. However, in February 2011, as part of Areva’s ongoing consolidation efforts, commercial nuclear fuel manufacturing activities at the Lynchburg, Virginia facility ended, leaving the Richland, Washington plant as Areva’s single commercial US fuel fabrication facility. In terms of its capacity in Asia, Areva has owned 30% of Mitsubishi Nuclear Fuel Co. Ltd. (MNF) and its Japanese fuel fabrication facility since MNF was restructured in 2009.

Also, under a 2008 agreement with Kazatomprom, Areva is to provide engineering support for the construction of fuel fabrication lines with an annual capacity of 1200 MTU at the Ulba Metallurgical Plant in Kazakhstan. The plant is expected to include a line dedicated to the production of fuel for Areva-designed reactors using fuel pellets supplied by Kazatomprom. However, the schedule for this plant remains unclear.

Areva currently holds contracts for at least 80% of the requirements of the 56 PWRs in France, plus part, if not all, of the reload requirements of about two dozen PWRs in Belgium, Germany, the Netherlands, Spain, Sweden, Switzerland and the UK. It also provides reload fuel to about 19 PWRs in the US, and at least one in Japan. With respect to BWRs, Areva is currently supplying fuel to as many as seven Asea-Atom and Siemens units in Germany and Sweden, about nine BWRs in the US and four in Taiwan.

Global Nuclear Fuel (GNF) was established in January 2000 as an international nuclear fuel joint venture of General Electric Company (GE), Hitachi, Ltd. and Toshiba Corporation. The US base for GNF is Global Nuclear Fuel-Americas (GNF-A), which is comprised of GE’s former BWR fuel business, including the Wilmington, North Carolina manufacturing facility. GNF Japan (GNF-J), formerly Japan Nuclear Fuel Company, Ltd. (JNF), includes all BWR marketing, design and development operations that GE, Hitachi and Toshiba had previously been engaged in separately. GNF-J supplies BWR fuel exclusively to the Japanese market. It operates a fuel fabrication facility in Yokosuka, Japan.

GNF-A supplies UO2 powder and fuel assembly components from Wilmington and GNF-J produces the fuel pellets and fabricates the fuel assemblies. Following Toshiba’s purchase of Westinghouse in 2006, adjustments were made to management and information sharing associated with the GNF BWR fuel business to protect commercial information and avoid conflicts of interest among the participants’ various businesses (for example, between Toshiba’s Westinghouse BWR and GNF’s BWR fuel-related activities).

After working together for many years, GE entered into a joint venture in BWR fuel manufacturing and services with Enusa Industrias Avanzadas, SA (ENUSA) in Spain in 1996. The resulting company, GNF ENUSA Nuclear Fuel SA (GENUSA) markets BWR fuel of GNF design to utilities in Europe.

At the present time, GNF-A is providing reload fuel for about two-thirds of the 37 BWRs operating in North America, including two units in Mexico. GNF-A also has been providing reload fuel directly to at least one unit in Germany and one in Switzerland and, through GENUSA, to two Spanish units.

Westinghouse is also a fully-integrated supplier. In addition to its US fuel fabrication facility in Columbia, South Carolina, Westinghouse operates the Western Zirconium Plant in Ogden, Utah, that produces zirconium and zirconium alloy materials for use in fuel components by Westinghouse and other fuel vendors. Tubing is produced by the Specialty Metals Plant (SMP) in Blairsville, Pennsylvania, which has been updated and expanded to accommodate fuel requirements being driven by new projects in China. Fuel assembly components are produced at Columbia as well as at the Windsor Components Plant in Connecticut. In 2009, Westinghouse announced that it had acquired a combined 52% ownership in Nuclear Fuel Industries, Ltd of Japan. This acquisition provides Westinghouse with nuclear fuel fabrication facilities that have the capability to produce both BWR and PWR fuel in Japan.

Westinghouse Electric Sweden operates a fuel fabrication facility in Västeras, Sweden, producing both PWR and BWR fuel. Westinghouse and ENUSA work cooperatively as the European Fuel Group (EFG), marketing fuel of Westinghouse design to European PWRs. While the arrangements for shared work vary from country to country, much of this fuel is produced at ENUSA, with UO2 powder being supplied from the Springfields facility in the UK and fuel components from Westinghouse facilities in the US. ENUSA also provides engineering services.

Westinghouse and China’s State Nuclear Baoti Zirconium Industry Company, Ltd. (SNZ) announced in 2009 that they had agreed to form a joint venture to build and operate a plant to produce nuclear grade zirconium sponge at Nantong in Jiangsu province. The plant, which is expected to begin production in 2012, will supply nuclear grade sponge to both Westinghouse’s zirconium plant in Utah and the Chinese market. In January 2011, Westinghouse announced that it entered into a contract with China Baotou Nuclear Fuel to design, manufacture and install fuel fabrication equipment that will enable China to manufacture fuel for the AP1000 units that are being built there.

In addition to providing fuel to meet about 75% of the reload requirements for PWRs in the US and 20% of the reload requirements for France’s EDF, Westinghouse/EFG has supplied fuel to a Framatome 17×17 unit in Belgium, Siemens 18×18 plants in Germany, and the Westinghouse 16×16 unit in Slovenia (Krsko). ENUSA supplies Westinghouse-designed fuel assemblies to Westinghouse 14×14 and 17×17 units in Spain and a Westinghouse 17×17 unit in Belgium. At present, Westinghouse is also supplying reload fuel to meet about 27% of BWR requirements in Western Europe and about 10% of the BWR requirements in the US.

National suppliers

In addition to the three principals, there are a number of other organizations that supply LWR fuel to local markets. Foremost among these national suppliers are:

  • China National Nuclear Corporation (CNNC)
  • Enusa Industrias Avanzadas, S.A. (ENUSA) of Spain
  • Industrias Nucleares do Brasil (INB)
  • Joint Stock Company TVEL of the Russian Federation
  • Korea Electric Power Nuclear Fuel Company (KEPCO NF)
  • Mitsubishi Nuclear Fuel (MNF) of Japan
  • Nuclear Fuel Complex (NFC) of India
  • Nuclear Fuel Industries, Ltd (NFI) of Japan.

With the exception of ENUSA and, to a lesser extent, TVEL, none of these national suppliers has had a significant impact to date on LWR fuel markets in Western Europe or the USA. However, in the future it may be possible to see a larger role for at least one of these two suppliers. TVEL continues to express interest in developing and marketing PWR fuel to Western countries. In addition, some of the Japanese and Korean fuel fabricators have been receiving encouragement from operators of US nuclear power plants to offer fuel fabrication services in the North American market. However, it is not clear that this will actually occur.

ENUSA has been operating a PWR/BWR fuel fabrication facility in Juzbado, western Spain, since 1985. The Juzbado facility does not have UF6-to-UO2 conversion capability, but ENUSA has licensing agreements with Westinghouse and GNF for PWR and BWR fuel fabrication, respectively. ENUSA has indicated that about 40% of its current production is dedicated to the Spanish market, about 30% to EFG, and about 30% to GENUSA contracts. In 2009, ENUSA reported that it manufactured 997 PWR fuel assemblies and 457 BWR fuel assemblies, which is equivalent to 326 MTU.

Russia’s TVEL provides a wide range of services dealing with nuclear fuel design, development and manufacturing. It has a controlling interest in seven other joint stock companies and their facilities, most notably the JSC Machine Building Plant (MBP) and its Elektrostal plant outside of Moscow, and JSC Novosibirsk Chemical Concentrates Plant (CCP), which operates a fabrication facility at Novosibirsk in Western Siberia. Over the last several years, TVEL has been consolidating and modernizing its fuel fabrication capabilities in Russia by rebuilding production lines to produce UO2 powder and pellets for VVER-440 and VVER-1000 units.

In addition, TVEL has been cooperating with Areva and its predecessor since 1996 to blend down Russian-origin HEU with RepU supplied by European utilities to fabricate fuel assemblies for use in plants in Europe. Under this arrangement, Areva supplies cladding, grids and other assembly components to TVEL, which prepares powder and pellets, and then assembles the fuel. Some of these contracts cover supply of fuel by TVEL to European nuclear power plants through 2020.

In cooperation with research and design institutes in Russia, TVEL has previously announced that it is developing an independent PWR fuel design (and later, perhaps, a BWR design) for use in Western nuclear power plants. The initial targets would be in western Europe where TVEL is expected to market this design. Licensing efforts in this region are supposed to begin during the next few years.

China National Nuclear Corporation (CNNC) has two nuclear fuel fabricators. The first is China Jianzhong Nuclear Fuel Co. (CJNF), which operates the fuel manufacturing facility at Yibin in Sichuan province. This plant, which started up in 1982, continues to provide PWR fuel to newer units, including the Ling Ao and Tianwan units. Its present UO2 pellet-making capacity is reported to be 400 MTU per year, which is expected to expand to 800 MTU per year by the end of 2012, and possibly to 1500 MTU per year by 2015. It is clearly China’s intention to be able to manufacture a substantial amount of fuel for the plants that it is presently building in decades to come.

A second fuel fabrication plant at Baotou in Inner Mongolia was started in 1998. While originally known as the Baotou Nuclear Fuel Plant, it is now the China North Nuclear Fuel Co. It presently fabricates fuel for two Canadian pressurized heavy water reactors (PHWRs) in China and is also preparing to build a line to make pebble bed fuel for high-temperature gas-cooled reactors.

Technology transfer arrangements with Russia will permit the installation of a VVER-1000 fuel fabrication line at CJNF, which will ultimately supply all the fuel for the Tianwan units. The VVER-1000 fuel line is reportedly part of a planned capacity expansion at CJNF that will allow it to double its total production capacity in coming years. CJNF reports that it has two fully-equipped pelletization lines, which may also be expanded to handle VVER fuel.

Finally, as mentioned above, Westinghouse is due to transfer the technology for AP1000 fuel fabrication to China sometime between 2014 and 2018. The fuel is likely to be manufactured at the Baotou plant, with some possible involvement of CJNF.

Korea’s nuclear fuel company is a subsidiary of Korea Electric Power Corporation (KEPCO). It is currently providing reload quantities of its high-performance PLUS7 fuel for its CE type OPR1000 and APR1400 plants, as well as ACE7 fuel for Westinghouse 16×16 and 17×17 plants operating in Korea. It has identified its next generation of fuel for the OPR1000 and APR1400 plants as HIPER fuel.

Market outlook

Figure 2 illustrates the current and projected adequacy of LWR fuel fabrication services on a worldwide basis through 2030. The figure presents fabrication supply on the basis of UF6 to UO2 conversion capacity, as currently estimated. At present, requirements account for approximately 56% of total worldwide capacity to convert UF6 into UO2 powder. There is currently so much surplus capacity that without any supply growth, forecasted 2030 requirements (under the ERI reference forecast) would only account for 83% of total present supply capacity. But, as mentioned above, the market is heavily fragmented.

Figure 1: World LWR fuel fabrication capacity relative to requirements

Figure 1: World LWR fuel fabrication capacity relative to requirements

The extent of competition in each market segment is often a function of:

  • The number of units using a particular fuel design
  • Fabricator expectations that the owner and/or operator of such units would be willing to purchase fuel fabrication services from another provider
  • The extent of potentially-available future fuel fabrication business over which the fuel fabricator will be able to amortize its initial development costs and earn a return on its investment
  • The existence of a viable product from another fuel fabricator that could pose a serious competitive threat.

Over the past several years, European utilities have been more likely than their US counterparts to seek competitive bids. They have also demonstrated a greater willingness to change fuel fabricators and award partial reloads to multiple suppliers in many of their operating units. The length of their contracts is normally shorter than those in the US as well.

Most of the fuel fabrication contracts executed each year in the US market continue to result from negotiated contract extensions. While there are usually two or more suppliers of fuel fabrication services able to supply fuel to each market, they cannot always do so economically for each specific fuel type within a particular market. As contracts are executed for new nuclear power plants, it is expected that such contracts will include initial cores and at least several reloads for each new unit.

During the past two years, the US market for nuclear fuel fabrication services has experienced a very significant step up in fuel fabrication price—30-40% for PWRs and about 20% for BWRs—that is unlike anything that has occurred in this market over the last several decades. Among the reasons offered by the fuel fabricators for this change are:

  • Higher costs incurred to produce fuel assemblies that can withstand the demands of operation without failure
  • Unprecedented increases in the cost of materials such as zirconium in response to increased demand
  • Higher cost of labour due to increased competition for qualified professionals
  • Increased capital expenditures necessary to support equipment maintenance and enhancements at existing facilities, and
  • Expansion of production capacity to accommodate the growth in fuel requirements that are associated with the new plants being built.

This article was originally published in the September 2011 issue of Nuclear Engineering International (p38-42)

Author Info:

Michael H. Schwartz and Eileen M. Supko, Energy Resources International, Inc. (ERI 1015 18th St, NW, Suite 650, Washington, DC 20036

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