MIT: Uranium Supplies Adequate

The supply of uranium should not be a show-stopper in any coming expansion of nuclear power, regardless of scope, according to a new study by the Massachusetts Institute of Technology (MIT). Because of the abundance of the basic material for nuclear fuel, says the report by MIT’s Energy Initiative, U.S. policy should change its decades-long focus on "closing the fuel cycle" through the use of breeder reactors and reprocessing and accept that the open, once-through fuel cycle is here to stay.

The Supply Question

The study comes at a time when uranium prices on commodity markets are rising, reflecting short-term market conditions, not the long-term prospects for supplying fuel for nuclear power plants. Robert Vance, a nuclear fuel analyst for the Paris-based Nuclear Energy Agency, told the New York Times late last year that though uranium is not rare, spot shortages are common, as licensing and developing new mines can take considerable time.

"For decades," says the MIT report, "the discussion about future nuclear fuel cycles has been dominated by the expectation that a closed fuel cycle based on plutonium startup of fast reactors would eventually be deployed. However, this expectation is rooted in an out-of-date understanding about uranium scarcity." Since the 1970s, the U.S. and much of the rest of the world has based its nuclear energy policy on the eventual need for breeders, based on what now appears to be a misperception of coming uranium scarcity. Major aspects of policy on disposal of high-level nuclear waste have also seen reprocessing as a way to remove fissionable material as a key part of the fuel-cycle equation.

Ernest Moniz, director of the MIT energy program and co-chair of the study, said, "The failure to understand the extent of the uranium resource was a very big deal" in the formation of past nuclear energy policy. Moniz is an MIT physics professor and former Department of Energy official in the Clinton administration.

The George W. Bush administration built its nuclear energy policy around what it called the Global Nuclear Energy Partnership, aimed at reviving nuclear reprocessing, which had been dormant for more than 30 years in the U.S. The Bush policy was a response to the pending failure of the Yucca Mountain spent nuclear fuel site. Many in the nuclear industry were privately scornful of Bush’s focus on reprocessing, but the president was said to be adamant about the benefits of the policy and his international program, which has now largely faded away.

That past policy focus is misleading, according to the new report, a follow-up to the group’s 2003 report, "The Future of Nuclear Power." "There is no shortage of uranium resources that might constrain future commitments to build new nuclear plants for much of this century at least," says MIT. "The benefits to resource extension and to waste management of limited recycling in [light water reactors, LWRs] using mixed-oxide fuel as is being done in some countries are minimal. Scientifically sound methods exist to manage spent nuclear fuel."

The Cost Question

The MIT report observes that uranium costs constitute 2% to 4% of the cost of electricity from an LWR. "Our analysis of uranium mining costs versus cumulative production in a world with ten times as many LWRs and each LWR operating for 60 years indicates a probable 50% increase in uranium costs." This increase, the report concludes, is insignificant, given that fuel makes up a tiny portion of overall costs of power from nuclear generators.

In its 2003 report, the MIT group recommended "financial first mover incentives" for new nuclear plants. The 2005 Energy Policy Act largely adopted that recommendation, including providing over $18 billion in loan guarantees for new construction. But the Bush administration was slow in implementing the plan and costs of new nuclear plants have escalated since then. The latest report reiterates the recommendation, calling for accelerated federal financial incentives for seven to 10 new nuclear units, removing those incentives once the new plants have a track record.

Using a figure of $4,000/kW in capital costs for new nuclear plants, the MIT report concludes that today, nuclear power is not competitive with coal- or gas-fired generation, in part because the poor construction track record of the first generation of plants has led to a "risk premium" imposed on the part of lenders. Nuclear also does not get any cost edge because of its zero emissions of carbon dioxide.

"With the financial risk premium and without a carbon emission charge," says the report, "electricity from nuclear is more expensive than either coal (without sequestration or natural gas (at $7/MBTU)." Eliminating the risk premium through further federal incentives reduces nuclear’s levelized cost (construction, fuel, and operation and maintenance) from 8.4 cents/kWh to 6.6 cents, making it competitive with coal (6.2 cents) and natural gas (6.5 cents). "The first few U.S. plants will be a critical test for all parties involved," says the report. "The risk premium will be eliminated only by demonstrated construction cost and schedule performance."

The recommendation for expanding federal subsidies for the first seven to 10 plants drew fire from anti-nuclear forces. The Nuclear Information and Resource Service (NIRS) called the MIT capital cost estimate of $4,000/kW "unsupportable." NIRS Executive Director Michael Mariotte said, "Even a cursory review of the literature finds that no new U.S. nuclear reactor proposal is coming in at $4,000/kw. The real-world estimates are ranging from $6,000-$9,000/kw—or 50% to more than 100% higher than MIT’s study asserts."

Mariotte said Constellation Energy has testified to Maryland state regulators that its proposed 1,600-MW Calvert Cliffs Unit 3 is estimated at $10 billion in capital costs (about $6,300/kW), while PPL has estimated an identical reactor would come in at $13 billion to $15 billion, and a 2008 estimate puts the cost of proposed new reactors at Turkey Point in Florida at $8,200/kW. Southern Co., which has an $8 billion DOE loan guarantee, estimates the cost of its Vogtle expansion at $8,200/kW.

The Spent Fuel Question

The MIT study also addressed nuclear waste and spent nuclear fuel disposal, a consistent U.S. policy failure for more than 50 years (see "The U.S. Spent Nuclear Fuel Policy: Road to Nowhere"). The study says that above-ground storage "on the scale of a century" is safe and gives the government and industry an opportunity to assess what happens next, while allowing the spent nuclear fuel to cool down and its radioactivity to decrease.

The approach of the 1982 Nuclear Waste Policy Act, which anticipated moving spent fuel directly from the reactor to the underground repository, was a mistake. Because of the thermal heat of the spent fuel, Yucca Mountain would have to be ventilated while the waste cooled. After 30 years of filling up with spent fuel, Yucca Mountain, the report said, would have "become functionally an underground storage facility with active ventilation for an additional 50 years prior to closure."

What’s the answer to the spent fuel dilemma? The MIT group says several technical options could work. "In recommending century-scale storage," says the study, "we are not precluding earlier reprocessing or geological disposal of [spent fuel] or much longer managed storage if the technology permits. These options are preserved. The key point is that fuel cycle decisions should be taken over the next decade or two in the context of a century time scale for managed storage."

—Kennedy Maize is MANAGING POWER’s executive editor.

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