What’s the Holdup with the HALEU Fuel Supply Chain?

  • Developers of advanced nuclear reactors in the US are wound up like tops over the issue of whether DOE will be able to provide HALEU fuels for their designs in time.
  • The agency seems to be bogged down in its internal decision making process with no timetable for issuing an RFP to make the government the 1st supplier of the fuel.
  • The consequences of delay are readily apparent given the enormous commitment of funds DOE has already made in advanced reactors along with matching private equity investments as part of the cost shared program. 
  • This report includes a comprehensive Q&A with DOE about its progress towards providing HALEU fuel at commercial scale.

The Department of Energy raised expectations last December about quick action to develop new supplies of high assay low-enriched uranium fuel (HALEU) which is needed in the next few years by developers of advanced nuclear reactors. The nuclear energy industry assumed that the agency’s request for information (RFI)  would be followed in short order by a request for proposal (RFP) to make the agency the “1st supplier” of HALEU which would create a functioning market for the fuel.

DOE said last December it projects that more than 40 metric tons of HALEU will be needed by 2030 with additional amounts required each year to deploy a new fleet of advanced reactors in a timeframe that supports the Administration’s net-zero emissions targets by 2050. At that time DOE recognized the need for speed in getting the HALEU supply chain in place, but progress since then has not matched early expectations by the firms that need the fuel.

“Advanced reactors are an incredible asset to have in our collective fight against climate change,” said Dr. Kathryn Huff, Principal Deputy Assistant Secretary for Nuclear Energy.

“If we don’t proactively take the steps now to ensure a sufficient and diverse supply of HALEU, then reactor demonstration and deployment projects, like those funded in the Bipartisan Infrastructure Law, won’t be fueled in time to help us slow the impacts of climate change.”

3.31_HALEU-Overview_742x960.jpg

Just about everyone who has looked at this issue agrees that time is running short. Everett Redmond, a Senior Technical Advisor at NEI, told Neutron Bytes earlier this month that 20 metric tonnes of uranium (MTU) are needed by 2025 when the two reactors funded under the DOE Advanced Reactor Development Program (ARDP) are scheduled to need to load fuel and start up. Thereafter, 6 MTU a year are need for fuel reloads.

However, Redmond estimates that as things stand now the HALEU fuel that the reactors need won’t become available until mid-2028. According to a compendium of advanced reactors in the US published by the Nuclear Innovation Alliance, there are at least half a dozens reactor projects that will need HALEU fuels, including the two ARDP projects, before the end of the decade. For these firms the need for on time delivery of HALEU is the one of their top ‘keep awake at night issue.’

advanced reactors by type

In the eight months that have passed since the RFI was released, the agency appears to be tied up in knots of its own making with uncertain indications of visible progress. DOE is still working on a strategic plan, which it would seem, is a precursor to a RFP for fuel. (See Q&A with DOE below).

The delay in getting an adequate and reliable supply of HALEU fuel is enormously frustrating to US developers of advanced reactors including two funded by the agency under its ARDP. TerraPower and X-Energy are enrolled in the cost-shared program which includes ambitious schedule milestones for deployment of their new designs.

Yet, according to a white paper prepared by the Nuclear Energy Institute (NEI), in a best case scenario DOE won’t be able to supply HALEU in the quantities needed until a year after the reactors are supposed to start up based on ARDP milestones. (See NEI bar chart below). The ARDP milestones are scheduled by DOE for completion in 2027 but the HALEU fuel doesn’t become available until mid-to-late 2028.

nei haleu schedule

For its part DOE says it is working on what it calls the agency’s Advanced Nuclear Fuel Availability Program.  The program as authorized bv the eanabling legislation has three main objectives.

  • Directs the Department of Energy to establish a program that supports development of a domestic source of high-assay low-enriched uranium (HA-LEU) for commercial use
  • Directs DOE to assess the quantity of HA-LEU needed for domestic commercial users biennially and report on the amount of its current uranium inventory that can be converted to HA-LEU
  • Instructs the Nuclear Regulatory Commission to assess regulatory policies changes that are necessary to enable the commercial use of HA-LEU

DOE said it is up to Congress to appropriate the funds needed to make it work. As these things go, the agency doesn’t need a lot of money, considering the size of its overall 2022 budget of $46 billion. The cost of a an HALEU program to meet the estimated needs of the industry, according to Redmond, is $300 million for HALEU fuel enrichment and manufacturing and another $60 million for down blending HALEU from the agency’s stocks of highly enriched uranium (HEU).

Given that it is now 2022, Redmond said that if DOE started today to work on getting the RFP out the door to make it the 1st supplier of HALEU by buying it from enrichment firms and then selling it to developers of advanced reactors, the government’s ponderous procurement process to make multiple awards to firms like Centrus, Orano, and Urenco could take an astonishing 12 months.

What these firms said in their comments on the DOE FFI is that building new enrichment capabilities for HALEU fuel isn’t quick or simple, and they includes new licensing actions with the NRC. Redmond estimates from the time DOE cuts purchase orders until the first deliveries of 10 MTU/year arrive could be as long as four years.

chicken and eggJust about everyone who has looked at the issue of HALEU suppliers, now that the US can’t buy it from Russia, has said the same thing. There is a classic “chicken and egg” issue. Fuel firms don’t want to commit resources to build fuel enrichment and deconversion capacity ahead of the uncertainties of demand. In other words, it is up to DOE to establish a stable market.

Both enrichment and deconversion facilities to fabricate the fuel types (uranium metal, TRISO, and molten salt) won’t get built by the private sector unless DOE primes the pump to develop a market by being the 1st supplier.

ANS HALEU Webinar

This is not news to DOE. Last March via an online webinar the American Nuclear Society (ANS) assembled a panel of experts on the subject. ANS addressed the issue of HALEU supplies for the ARDP reactors and for other developers of advanced reactors. (Video link and text summary of the session)

The developer community is anxious about DOE’s slow pace towards making HALEU fuel available. Ben Reinke, a senior executive with X-Energy, which is one of the two ARDP funded firms, said, “We must have HALEU two years before we go on the grid. DOE must get a 1st supplier RFP out ASAP.”

Brad Williams, an INL engineer assigned to the staff of the Senate Energy & Water Committee, said the anxiety of advanced reactor developers is based on the fact that “DOE is not moving nearly fast enough to establish the fuel supply.”

Scott Kopple, Senior Director for Government Relations at BWXT, sees down blending of HEU as a near term option but notes that there are NRC licensing issues for fuels at greater than 5% and less than 20% U235 that sit on the critical path for fuel firms. He added that a DOE program which fulfills the role of being the first buyer of HALEU would could also be used to replace the HEU down blended to meet near term needs for ARDP projects.

Redmond added a key observation that no new R&D is needed to make HALEU. “We know how to manufacture the fuel,” he said.

Third Way Report on Down Blending

fuel assemblyAlan Ahn, a resident fellow at the Third Way, a DC-based think tank, in an interview with Neutron Bytes cited a recent report published by Third Way on down blending options.

“One metric ton of HEU will produce approximately 4-5 metric tons of HALEU through down blending. Given that the first cores of the ARDP Pathway 1 demonstrations will require an estimated 25 metric tons of HALEU, roughly 6-7 metric tons of HEU would be needed for down blending.”

Ahn added that in declassified reports, NNSA said that 42 metric tonnes of HEU  are available for down blending and would not impact national security needs. This inventory of HEU could yield between 168 and 210 metric tonnes of HALEU assuming the funds, facilities, and licensing issues can be resolved in a timely manner. The rate at which the down blending could produce HALEU is a key question.

NIA HALEU Webinar

More recently, during a webinar held last week by the Nuclear Innovation Alliance (NIA) Patrick White, an NIA project manager, said that down blending should be a near term priority for DOE. However, NEI’s Redmond pointed out that NNSA’s reluctance to support it is based the need for a facility to do it, and there are questions of whether the HEU is in a form that readily supports the process.

In the NIA webinar Art Hyde, Portfolio Manager at Segra Capital  Management, agreed with Redmond that enrichment and manufacturing of HALEU fuel “are not technical issues.”

Hyde also pointed to another factor that is holding back fuel firms from taking early action to address the potential for an HALEU market.

“There is a lack of expertise in the investment world about nuclear energy. DOE and the advanced reactor firms must talk to investors to educate them. Addressing the issues of pricing, raising capital for equipment, and addressing the commercial issues are solvable.”

He added that early action by DOE “is incredibly important” as part of an overall public private partnership between the government, the nuclear fuel industry, and the developers of advanced reactors.

According to NIA’s White, if DOE becomes the 1st supplier of HALEU fuel, the agency will be able to sell it to reactor developers. The agency’s program will be paid for, in effect, by the reactor firms buying the fuel from the agency. The promised purchase orders from DOE to the fuel firms will justify their seeking investors to fund building the facilities needed to enrich and manufacture it. In other words, the cash flow goes through DOE.

“In this way there is no net outlay by DOE, and it creates a functioning market,” White said.

Q&A with the Department of Energy

DOE Nuke Ofc logoWith all the loud knocking on DOE’s door following the release of the RFI, Neutron Bytes asked the agency to provide an update on its current efforts to address the HALEU supply issues. Because of the number of different parts of the agency that are involved, all of the comments below are attributable to an “agency spokesman” which represents a consolidated response.

Q – STRATEGY — Regarding the HALEU RFI and work on a “more comprehensive uranium strategy,” does DOE have a timeline and/or target date for completion and release of a strategy?  What is the list of issues that it will address?

A – The Department of Energy team focused on the comprehensive uranium strategy is working with a clear sense of urgency to identify options that will meet commercial and DOE uranium needs in the near-term, mid-term and long-term. This strategy has the mutual objectives of expanding our domestic fuel cycle supply capacity and limiting our dependence on Russian-supplied uranium. An initiative of this magnitude requires extensive input, coordination, and endorsement, so a precise timetable cannot be provided.

& & &

Q – One of the issues is whether HALEU fuel will be available in a timely manner for the two advanced reactors funded under DOE’s ARDP program. That program has ambitious milestones set by the agency that the two firms must meet. The availability of HALEU fuel is a key item on their respective critical paths. DOE’s role in making the fuel available is a key factor in achieving success. How is DOE planning to address this?

A – As previously noted, the Department is considering all near-term and mid-term HALEU supply options until a commercial supply of HALEU enrichment is established. We consider HALEU supply for the two ARDP demonstration reactor projects as one of our highest priorities.

& & &

Q– DOWNBLENDING HEU  — With regard to down blending of HEU, it is my understanding that the down blending of the EBR-II fuel in Idaho is specific for the Oklo advanced reactor effort and not generally applicable to other developers.

Is that assumption correct?  The EBR-II fuel is not technically HEU, e.g., 20%+ U235, so what will be the final enrichment level of the down blended HALEU and what form will it be in?

A – The EBR-II spent nuclear driver fuel currently being down blended at the Idaho National Laboratory is HEU. The batch process being used doesn’t result in a precise, uniform enrichment level, but is targeting a level just under 20%. The material produced is a uranium metal.

Nearly 10 metric tons of HALEU should be produced from the finite supply of EBR-II driver fuel. Five metric tons were set aside for Oklo’s use based on a prior solicitation of interest in the material issued by the INL.

Additional developers have expressed some interest in the material as well, but it is not suitable for all applications due to the impurities remaining from being previously irradiated. The two ARDP demonstration projects are not interested in using the EBR-II material.

& & &

Q – Also, With regard to the FY 2023 budget request, how much HEU would be down blended, based on this funding if approved by Congress, and in what form will it be in based on the funding request?

A – The FY23 budget request within the Office of Nuclear Energy includes the initial year of funding for a 3-year project at the Savanah River Site which will ultimately produce about 2 MT of HALEU. The NNSA/DNN FY23 request contains a similar multi-year funding request for material at Y-12 that will produce just over 2 MT of HALEU. Both of these projects would produce HALEU in oxide form.

& & &

Q – Also, a recent report by Third Way, a DC based energy related think tank, has some estimates about down blending needs for HALEU and available supplies of HEU. How does DOE’s program in the FY2023 budget request compare to the report. See URL and snip below.  I assume that DOE is aware of the report.

“HALEU needs require just a modest amount of HEU based on the latest assessments, down blending HEU would also entail a modest investment—between $150 to $200 million over the next few years to expand down blending capacity—compared to the massive political and financial commitments the federal government has made toadvanced nuclear development in the last several years. A temporary down blending program is a necessary complement to the investments we’ve already made in advanced reactors, while accompanying efforts to develop domestic enrichment capabilities will likely enable options to replace the HEU used for down blending, if necessary. Of the nearly 42 metric tons of HEU that was previously available for down blending, it is likely that adequate stockpiles remain to produce the 25 metric tons of HALEU that is immediately needed to support our energy security and climate priorities.”

Also, it has been noted that it is not clear that all of the HEU that could be down blended for HEU is in a form that allows for early action on it. Is this an issue?

A – We are aware of and have read the June 17 Third Way report. The report generally describes quantities of HEU within DOE’s inventory and notes that specific quantities of HEU can be down blended into larger quantities of HALEU. The report also notes the importance of finding a fuel source for the ARDP demos and accelerating U.S. innovative reactor concepts to the marketplace. The vast majority of DOE’s HEU inventory is allocated to national security missions, so it would be a misconception to assume that the various materials in inventory are readily available and can simply or quickly be processed into HALEU. The Department is thoroughly evaluating what is feasible to achieve without adverse programmatic, cost or schedule impacts.

& & &

Q – PROPOSED LEGISLATION — The International Nuclear Energy Act of 2022, introduced by Senators Joe Manchin (D-WV) and James Risch (R-ID), authorizes $3.5B towards the build-out of domestic low-enriched uranium (LEU) and HALEU production infrastructure.  If this bill is added as an amendment to the FY2023 Energy & Water Appropriation, which looks like a plausible scenario, how would DOE proceed to spend the money in FY 2023 to produce HALEU fuel?

Separately, The Fueling Our Nuclear Future Act, introduced by Senator John Barrasso (R-WY), specifically focuses on HALEU supply challenges and provides funding for down blending to assure timely supply for our vanguard advanced reactor deployments.

What is the administration’s position, if any, on these bills?

A – The Administration has not taken a formal position on these two Bills. The Department is closely monitoring proposed legislation which addresses the nuclear fuel cycle and has provided technical assistance as requested by Congress. The Department has interacted with relevant House and Senate Committee staff on these topics. It would be premature to comment on how the Department would implement the specific provisions of the various Bills, noting that some of them take different approaches. It should also be recognized that authorizing legislation ultimately requires appropriations for the Department to implement actions.

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Dan Yurman ~ For breaking nuclear news follow me on Twitter @djysrv or https://www.twitter.com/djysrv ~ About this blog and disclaimers for NeutronBytes ~ ~ https://neutronbytes.com/2014/08/31/welcome-post/ Contact Me ~ neutronbytes [at] gmail [dot] com ~ Text via Signal 216-218-3823 ~ I am NOT active on Facebook, Reddit or Instagram. Attempt no landings there. ** Header Image Credit: http://apod.nasa.gov/apod/ap110904.html ~ ** Emails sent by readers about blog posts are considered to be comments for publication unless otherwise noted. ** The content of this blog is protected by copyright laws of the U.S. "Fair use" provisions apply. The RSS feed is for personal use only unless otherwise explicitly granted.
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2 Responses to What’s the Holdup with the HALEU Fuel Supply Chain?

  1. Pingback: DOE Decides to Build the Versatile Test Reactor at INL | Neutron Bytes

  2. Jack Bennett says:

    Why did this article not mention the GLE/Silex capability to produce LEU and HALEU? This seems to be a significant omission.

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