The Biden administration’s efforts to develop a more energy-dense nuclear fuel got a sudden $700 million windfall in the climate-and-tax bill signed into law this month, a boost for the agency’s plans to demonstrate two next-generation reactors before the end of the decade, energy officials and nuclear supporters said.
The funding—more than 15 times the program’s current annual appropriation—is a down payment for the Energy Department’s efforts to develop fuel supplies for advanced reactors, which are designed to be much smaller than the current fleet of nuclear plants.
Fuel to start up the first two agency-supported advanced reactors, under development by TerraPower in Wyoming and X-Energy in Washington state, was expected to be sourced entirely from Russia. After Russia’s invasion of Ukraine, US energy officials have moved urgently to wean off Russian imports of high-assay low-enriched uranium, or HALEU.
The Inflation Reduction Act “will lead to more certainty in competing this work and defining a successful path forward,” Andrew Griffith, the department’s deputy assistant secretary for nuclear fuel cycle and supply chain, said in a statement.
“With these significant funds up front for commercial HALEU, we are considering adjustments that can help us move faster with better value to the taxpayer,” Griffith said.
Griffith said the funding will require agency officials to make some adjustments as they work on a broader uranium sourcing strategy, which was already in motion. Energy Secretary Jennifer Granholm told Congress in April the agency was “in final stages” of developing a HALEU strategy, which at that time had just $45 million appropriated by Congress for fiscal year 2022.
Sense of Urgency
Industry watchers have been eagerly awaiting the department’s proposal, which would lay out how the agency will provide enrichment facilities that currently don’t have operating reactors to feed.
The department is aiming to funnel start-up capital and certainty to scale up enrichment facilities while supporting its Advanced Reactor Demonstration Program—and trying to keep both on the same timeline.
More than 40 metric tons of HALEU fuel will be needed by 2030, with additional amounts required each year to run a new fleet of advanced reactors, the department estimated in a request for information in December 2021.
“It’s a chicken-and-the-egg problem that is constraining investment both in the HALEU production and HALEU-fueled reactors,” said Dan Leistikow, vice president of corporate communications for Centrus Energy Corp., which is building the country’s first licensed HALEU facility in Piketon, Ohio, in partnership with the department.
“There’s an urgency about getting this money to work so those reactors have fuel,” Leistikow said.
For Urenco Group—a British-German-Dutch nuclear fuels company that runs the only operating US enrichment facility, in New Mexico—the funding is crucial to its foray into more enriched fuel production, Lisa Hardison, a company spokeswoman, said in a statement.
The company is seeking license amendments to produce more enriched uranium and designing a new commercial HALEU facility, she said. The company “looks forward to supporting DOE as it implements the HALEU-related provisions,” she said.
The HALEU Availability Program, established by the Energy Act of 2020, was intended to provide incentives for production by committing the DOE to buy some of the first batches of fuel. That would give producers the certainty to build plants while providing advanced reactors more time to become reality.
The department will be aiming to stand up enrichment facilities while tapering support once the private sector has fuel orders to fill, said Patrick White, project manager for the Nuclear Innovation Alliance. The climate bill requires the agency to spend the money by the end of September 2026, which adds another challenge as the department thinks through possible incentives, White said.
The agency could use those funds to come up with grants to help with licensing costs, cost-share agreements on building or expanding new facilities, or pre-purchases of uranium enrichment services, White said.
“That’s definitely front-loaded money,” White said. “What’s the best way to send a market signal that is going to eventually get private industry to make the investments?”
‘No Time to Waste’
This year, following the Ukraine invasion, lawmakers have put more money in the program while pressing the department to provide more information.
For fiscal year 2023, House lawmakers have proposed $100 million, while the Senate proposed $150 million a year. The Senate level of funding would be extended over 10 years, totaling $1.5 billion, under the Fueling Our Nuclear Future Act of 2022 (S. 4066) introduced this year by Sen. John Barrasso (R-Wyo.), the top Republican on the Senate Energy and Natural Resources Committee.
But House appropriators in their budget documents criticized the department’s “outdated and insufficient information” that was provided, demanding that reports on the structure of the program be submitted before fiscal year 2023 funding is obligated.
“They really do have enough in the bank to get started on this process and move forward in a strong way,” said Ryan Norman, a policy adviser for the Climate and Energy Program at Third Way, a centrist research organization in Washington. “There’s really no time to waste.”
Importantly, Norman said, as much as $100 million in the climate bill could be spent on a temporary, short-term fix: sourcing HALEU from the country’s existing stockpile of highly enriched uranium.
The country has nearly 42 metric tons of highly enriched uranium available to be diluted into HALEU, according to the most recent declassified figures, from 2013. One ton of highly enriched uranium, used in naval propulsion reactors, nuclear weapons and in some research reactors, can yield about 4 to 5 tons of HALEU when it is diluted.
The agency is “working on the adjustments and an implementation schedule,” Griffith said in the statement. It will announce details in “coming days and weeks,” he said.
Any move to develop US uranium or enrichment capacity is likely to frustrate environmental advocates and tribes who point to a legacy of 20th century uranium mining contamination across the American West.
In July, a coalition of 13 advocacy groups led by the Grand Canyon Trust wrote a letter urging the Senate energy committee to oppose Barrasso’s HALEU legislation. The bill, the groups pointed out, would strike a provision in the Energy Act of 2020 that the Energy Department consider HALEU options that avoid pulling uranium from federal lands or cause harm to tribal land, or degrade water quality.
“If the government is going to pump money into the uranium industry while claiming to prioritize environmental justice, it must also meaningfully improve the laws and regulations that govern uranium operations throughout the supply chain,” said Amber Reimondo, energy director for the Grand Canyon Trust, in a statement to Bloomberg Law.
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