Lightbridge and Framatome go their separate ways

29 March 2021

Following the announcement earlier in March that US-based Lightbridge Corporation and France’s Framatome ghad agreed to terminate their Enfission joint venture, Lightbridge on 24 March announced their financial results for the fiscal year ended 31 December 2020 and provided an update on the company's progress.

President & CEO Seth Grae commented, “Despite the challenges faced in 2020 during the COVID-19 pandemic, I’m happy with the progress Lightbridge has made throughout the year. In summary, throughout 2020, Lightbridge has taken steps to reduce many of the risks associated with our business. One major step in 2020 included securing US government support for our fuel development programme through our GAIN voucher award from the US Department of Energy (DOE)”, which “positions us to further enhance our fuel development efforts”. DOE’s Gateway for Accelerated Innovation in Nuclear (GAIN) aims to provide the nuclear community with the technical, regulatory and financial support necessary to move innovative nuclear energy technologies toward commercialisation.

Grae added: “Importantly, we also came to terms on a settlement agreement with Framatome that resolves all disputes between the companies and terminates all agreements pertaining to the Enfission joint venture, freeing all intellectual property rights to their respective background technology. I believe this settlement agreement is the best result for all sides, allowing Lightbridge to pursue various promising opportunities in the nuclear sector, now unencumbered by any constraints on our Lightbridge Fuel™ technology platform.”

He said Lightbridge had also “taken the critical step of prioritising our fuel development programme towards powering Small Modular Reactors (SMRs) of the future. SMRs are expected to have much lower capital costs per module than larger reactor designs, making their deployment easier to finance and support by private and government sectors. In addition, we expect SMR plants with Lightbridge Fuel to have the ability to load follow renewables, helping to expand markets for renewables and SMRs together as countries seek to decarbonise energy generation. We believe that Lightbridge Fuel’s™ most significant economic benefit to SMRs will be to provide a 30% power uprate that will allow SMRs greater flexibility in power levels.”

He concluded: “We want to position Lightbridge as an essential company for the world to meet its climate goals. While existing large reactors can present an additional market opportunity for Lightbridge Fuel™, we do not expect significant future growth in the number of these large reactors, so they will not move the needle on climate change. Lightbridge is going where the industry is heading, along with the significant government funding opportunities we expect to go toward SMRs in the coming years, and we remain focused on our pursuit of full-scale commercialisation of Lightbridge Fuel™ as quickly as possible.” 

The same day, Framatome announced that it had signed a contract with Xcel Energy for the supply of PROtect enhanced accident tolerant fuel (EATF) technology and ATRIUM 11 fuel for the Monticello Nuclear Generating Plant in Monticello, Minnesota – a clear indication that Framatome was continuing to focus on fuel development for large reactors. Framatome said that, evolving from traditional fuel designs, its PROtect EATF “is more tolerant to loss of active cooling in the reactor core for longer periods because its reduced oxidation behaviour increases coping time”. Simultaneously, this fuel “offers improved performance during normal operations, allowing operators greater flexibility and efficiency”.

For the first time, Framatome will deliver prototype enhanced accident tolerant fuel rods, as part of its PROtect EATF programme, to a boiling water reactor (BWR). This fuel will be loaded during a 2021 refuelling outage. Framatome will also begin delivering reloads of ATRIUM 11, its advanced BWR nuclear fuel design, starting in spring 2023. “Our experts constantly advance our fuel designs to provide our customers with technologies that support efficient and reliable plant operations and help them meet their carbon-free electricity goals,” said Lionel Gaiffe, senior executive vice president, Fuel Business Unit at Framatome. “In particular, this contract represents an expansion of both our PROtect fuel technologies and further validation of our ATRIUM 11 fuel design.”

Xcel Energy is the eighth nuclear power plant to transition to the ATRIUM 11 fuel design, validating its performance and value for customers, Framatome said. The 11x11 rod array, complemented by the use of chromia-enhanced uranium oxide (UO2) pellets, allows operators to run their plants with more flexibility in response to fluctuating power demands while improving uranium utilisation and plant efficiency, resulting in lower costs for utilities. The first lead fuel assemblies of ATRIUM 11 were inserted into plants in Europe in 2012 and in the USA in 2015, and the first reloads using the fuel were delivered and inserted in Europe in 2018 and in the USA in 2020.

Meanwhile, Lightbridge, in its financial results provided more detail on the former Enfission joint venture. Cash and cash equivalents were $21.5 million at 31 December 2020, compared with $18.0 million the previous year. Cash used in operating activities increased $1.9 million, from $6.7 million in 2019 to $8.6 million in 2020. “This increase was due primarily to an increase in general and administrative expenses “offset by a decrease in our research and development expenses, as Lightbridge is no longer conducting its research and development activities through Enfission”. Cash used in investing activities decreased $3.6 million from $3.8 million in 2019 to $0.2 million in 2020 “due primarily to the reduced investment in the joint venture, Enfission”.

General and administrative expenses for 2020 increased to $8.3 million compared with $5.8 million for 2019. The increase included “severance payments made of approximately $0.2 million, for employee layoffs partially due to the uncertainty of COVID-19 on our future business operations and the cessation of the Enfission joint venture”. Total corporate research and development costs amounted to $0.9 million in 2020 compared with $2.7 million for 2019. This “was due primarily to transitioning our R&D work relating to Enfission to developing a new fuel development strategy with US Department of Energy national laboratories”. As part of the settlement agreement with Framatome, Lightbridge “agreed to pay approximately $4.2 million in legal settlement costs”.

As to other operating income, it totalled $0.1 million for 2020 compared with a loss of $2.6 million for 2019. “This change was due to a net decrease in the equity loss from the Enfission joint venture of $2.6 million and an increase in grant income from the GAIN voucher of approximately $0.1 million. There was no grant income in 2019. Overall, the net loss for 2020 was $14.4 million compared with $10.7 million for 2019. This increase “was primarily due to legal settlement costs to terminate the Enfission joint venture”.

However, Lightbridge is focusing on strengthening its links with US DOE. On 25 March DOE announced that Lightbridge had been awarded its second voucher from the DOE’s GAIN programme to support development of Lightbridge fuel working in collaboration with the Pacific Northwest National Laboratory (PNNL) “to demonstrate Lightbridge’s nuclear fuel casting process using depleted uranium, a key step in the manufacture of our fuel”. The total project value is approximately $664,000, with three-quarters of this amount funded by DOE for the scope performed by PNNL. The project is anticipated to begin in the first half of 2021.

Grae said the award “further validates our advanced nuclear technology and our fuel development efforts”. He added: We are pleased to collaborate with PNNL, which has world-class expertise and equipment that is superbly suited for the scope of this project. This voucher will provide Lightbridge the opportunity to advance our research and development efforts towards testing and determining an integral component of the manufacturing process for Lightbridge Fuel™.

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