An enriching deal6 September 2018
The recent UK nuclear sector deal recognised the importance of the UK nuclear fuel industry. Dominic Kieran discusses what this means for Urenco.
THE UK GOVERNMENT’S NUCLEAR SECTOR Deal shows clear policy commitment to the country’s nuclear fuel industry, both domestically and internationally, and recognises the strategic importance of maintaining its fuel capabilities.
As a multinational technology company with a focus on the fuel cycle, Urenco strongly welcomes this commitment. This government endorsement boosts the robustness of the UK’s fuel offering and helps to ensure that the country continues to be a global leader in the nuclear sector. A domestic nuclear fuel capability is critical to the country’s energy security, and to the retention and development of highly skilled jobs in the UK. It also makes a strong contribution to regional and national economies.
The UK government’s commitment to ensure the continued commercial operation of the UK’s facilities comes at a crucial time. It identifies the need for industry to work together to realise its full potential.
Today Urenco estimates that the uranium enrichment market is oversupplied in capacity, but not in terms of SWU produced from that capacity, due underfeeding. We forecast that enriched uranium inventories in the market will continue to decrease and it is these inventories that are suppressing prices. Uranium from underfeeding has mostly been committed under long-term contracts.
Enrichers are delivering under long established contracts with legacy pricing and their current financial performance is not a guide to the future. Today’s price will not allow for reinvestment to maintain capacity.
Urenco owns 50% of Enrichment Technology Company (ETC), a joint venture with Orano and together we are supporting the industry by continuing to maintain the availability of centrifuge technology, at a financial cost, although capacity is not needed in the short term. We will need commitment and sustainable prices from customers to support the work of ETC in the future.
Urenco is managing these challenging market conditions by significantly reducing costs and pursuing areas of growth, innovation and collaboration, while supporting our customers. Our four enrichment facilities in the UK, Germany, the Netherlands and the USA give us expertise, diversity of supply and the ability to manage risks.
We also provide services, such as responsible nuclear stewardship and the production of stable isotopes for medical, industrial and research applications.
Opportunities for the fuel industry
The nuclear industry will continue to need a long-term, cost effective and diverse supply of enrichment services. As an industry, we need to be able to fuel not only today’s reactors, but future technologies like small modular reactors (SMRs) and advanced modular reactors (AMRs).
Urenco is well positioned to supply nuclear build programmes in the UK and across the world with reliable enrichment services and fuel cycle products for the entire lifetime of these reactors, whether existing or future reactor technologies.
We are also encouraged by the numerous new SMR and AMR concepts highlighted in the Nuclear Sector Deal, including our own design, U-Battery, which we are developing as part of a consortium. U-Battery received the green light to progress to phase one of the government’s AMR Programme. During phase one we will produce a feasibility study which will make the commercial and technical case for U-Battery.
We are delighted that the government is supporting these reactors and advanced manufacturing.
The nuclear industry has to be ready to embrace new reactor technologies and designs and the fuel sector has to be ready to supply them. Today it is not clear which type of reactors will be operating in the future but It is clear that support from the fuel industry is an essential element of future success.
We look forward to playing our part in addressing the energy and decarbonisation challenges in the UK and across the world through the fuelling of the current and next generation of reactors. As a long term, sustainable supplier to the nuclear industry, we look forward to working closely with the UK government and industry stakeholders so the industry realises its full potential.
Author information: Dominic Kieran is Chief commercial officer at Urenco