Nuclear power and the fuel cycle

Australia has the potential to benefit extensively from its strategic position as an industrialised net exporter of energy. In particular, there are a number of elements of the nuclear fuel cycle where Australia could make a valuable contribution and enhance its economic prosperity. The need for local nuclear power generation will be determined by politics, pricing and competitive technologies.

The key stages in the nuclear fuel cycle are:

· front end processing with mining and enrichment

· electricity generation

· back end reprocessing, disposal and recycling of spent fuel

Australia currently has no business activity beyond mining and has regulatory barriers for a number of activities at other stages. Despite these constraints, Australia has made significant technical contributions to enrichment through Silex Systems and the disposal of spent fuel with Synroc.

1 Cost of uranium oxide reactor fuel

The three key process segments in the fuel cycle are mining, enrichment, and reprocessing and disposal of spent fuel.

In mid 2011, the approximate US dollar cost to create one kg of uranium as UO2 reactor fuel is shown in Table 1. This table highlights how the majority of the economic value add in the uranium fuel cycle occurs at the point of U3O8 , enrichment and the back end of the fuel life cycle, the reprocessing or long term disposal.

Table 1 US $ costs for processes in the uranium fuel cycle

Notes: 1: SWU Separative work unit for uranium enrichment.

2: Reprocessing is approximately $600 per kg with $400 for disposal of resultant wastete
Source: World Nuclear Association

2 Mining

Australia has three operating mines at the present time, Ranger, Olympic Dam and Beverly. These and a group of some 10 exploration and development prospects account for probably more than 23 per cent of the world's reserves. Australia sells about 7,000 tonnes of yellowcake a year with a value of some US$800 million.

Growing world demand for uranium is creating a substantial opportunity for Australia. Demand for uranium is expected to remain strong. Electricity demand is increasing twice as fast as overall energy use and is likely to rise 76 per cent to 2030. The Asian region is projected to more than double it needs by 2030. Nuclear power generation provided about 14 per cent of world electricity demand in 2007 and despite the events at Fukushima the building of new nuclear power generators will continue.

An often heard claim is that with limited uranium resources there is a limited supply life of 50 years so nuclear reactors are merely a short term source of energy. However there has been very little recent exploration for uranium given the present resources and political constraints. There will be a limit to the resource but there are very substantial global reserves. For the right price uranium can even be recovered from sea water.

There is of course the development of breeder reactors and talk of a thorium based nuclear fuel that would substantially extend any resource limitations.

Mining uranium has important environmental benefits that extend beyond mitigating carbon emissions. An important comparison in exporting energy is that shipping 7,000 tonnes of yellowcake is the energy equivalent of shipping 140 million tonnes of thermal coal. Australia's present thermal coal exports are around 100 million tonnes requiring. This requires between 3,000 and 4,000 voyages of bulk carriers through environmental sensitive regions, such as the Great Barrier Reef. Export coal also has an environmental impact through the provision of harbours and railways. Enhancing uranium exports is an environmentally preferable means of addressing growing global demand for energy.

3. Conversion and Enrichment

The conversion of yellowcake to uranium hexafluoride is a small value adding step and plants are located in countries that have enrichment plants.

The development of enrichment plants has evolved with technological advances that have improved the energy efficiency of the process. The first plants were energy intensive and used gaseous diffusion to enrich the uranium. It has been estimated that seven per cent of the US electricity demand was from enrichment plants at the height of the cold war when 90 per cent U-235 was required not the reactor grades of 3-4 percent for power generation. The development of centrifuge separation dropped the energy demand dramatically. Most plants use centrifuge technology but diffusion plants still operate in France and the USA.

Laser separation should offer a further reduction in energy needs. This approach may result in a highly profitable business if prices are set by the use of diffusion or centrifuge technologies. Global Laser Enrichment uses the technology developed by Silex Systems of Australia and licensed exclusively to the General Electric Company (GE) in 2006. GE, Hitachi (Japan) and Cameco (Canada) are all investors in Global Laser Enrichment. The technology is moving through development stages and a commercial production facility is being designed in order to obtain an operating licence. This might be granted as early as January 2012.

The lack of interest shown by the larger Australian mining and energy companies is no doubt due to the absence of an enabling regulatory regime. Thus a pioneering Australian technological breakthrough could not be developed in this country. As a consequence, a business opportunity has been lost where the technology should have delivered a major cost advantage over existing operations.

The market for fabrication of fuel rods and assemblies is dominated by the builders of nuclear power plants.

Uranium enrichment is an important technology under tight international control to prevent the proliferation of nuclear weapons. Despite this some countries have developed nuclear weapons or are believed to be doing so. The new laser separation technology developed by Silex Systems may have substantial implications for weapons proliferations if it substantially reduces the cost of enrichment.

4. Nuclear Power Generation

There are no present plans for nuclear power generation in Australia. However, the time may come for a reassessment of public policy. This will be particularly true if carbon taxes are raised to a point where nuclear power becomes competitive with coal and renewables are unable to provide base load power.

The present cost of enriched uranium fuel at US or A$7.00 per MWh is more than the estimated short run marginal cost of electricity from brown coal in Victoria at $2 to $5 per MWh. Marginal costs for black coal in New South Wales and Queensland are $6 to $17 per MWh.

A carbon tax would see these coal costs increase. A carbon tax of $23 per tonne of CO2 would increase brown coal costs by $35 and black coal costs by $25. Of course the MRET scheme that has enabled the building of wind farms has a subsidy of some $30 per MWh. This could be extended to nuclear power station financing but the lead time and large capital cost combined with the present uncertainty over the future of the carbon tax and hence electricity pricing makes such projects unattractive.

5 Reprocessing and Disposal

Reprocessing is an important element in the fuel cycle as it enables the recovery of unused uranium and plutonium from the used fuel elements. This closes the fuel cycle, gaining some 25 per cent more energy from the original uranium. In some countries, such as Japan this stage is regarded as contributing to energy security.

A 1,000 MWe nuclear reactor generates about 27 tonnes of spent fuel per year. Reprocessing separates the fission products from uranium and plutonium. After two years in a reactor, the spent fuel is 95 percent U-238, 1 percent U-235, 1 percent plutonium and 3 percent fission products and transuranic elements (actinides). Reprocessing reduces the volume of material to be disposed of as high-level waste to about one third of that for the spent fuel elements. Also the level of radioactivity in the waste from reprocessing is much smaller and drops off much more rapidly than in the used fuel itself which remains radioactive for tens of thousands of years

Some 290,000 tonnes of spent fuel has been discharged from power reactors over the last 50 years. Between now and 2030 an additional 400,000 tonnes of used fuel is expected to be generated worldwide with over half coming from outside North America and Europe. So far, only 90,000 tonnes of used fuel has been reprocessed. This represents a total of 690,000 tonnes of spent fuel that needs to be reprocessed or placed into long term storage.

Annual global reprocessing capacity is some 4,000 tonnes per year for normal oxide fuels but spent fuel is generated at about 12,000 tonnes per year and should increase to over 20,000 tonnes per year by 2030. This means there is a shortfall for reprocessing capacity of approximately 8,000 tonnes a year at the moment and this will grow to approximately 16,000 tonnes a year by 2030.

The main reprocessing plants are in France and the UK serving customers world-wide. There is no reprocessing in the United States as this was stopped by President Carter in 1977.

The high level waste from reprocessing is immobilised in a vitrified form. It is shipped back to the country that generated the waste along with the stripped fuel that can be recycled as MOX.

Synroc, invented in Australia, is a ceramic capable of very high loading with radioactive waste. This is important as it reduces the volume of the material needed to immobilise the waste and hence the cost of disposal. It has been used for treating high level wastes generated by military programs in the United States.

The establishment of an integrated spent fuel management industry with both Australian and international participation has been attempted but encountered substantial political obstacles.

The concept was for the long-term storage and possibly final disposal of waste. The potential economic benefits to Australia were very large. Even restricting the waste to Australian-sourced uranium would be a substantial annual market of 1,000 to 2,000 tonnes of spent fuel with $1 to $2 billion annual revenues.

The preferred solution is deep geologic burial. This is under development in Europe (Finland, Sweden) and in the USA possibly at Yucca Mountain although regulatory approval is stalled. In Australia the optimum geology occurs in remote regions of South and Western Australia and the Northern Territory. Such a mine is essentially an underground driveway with access to a number of chambers for the disposal of thousands of tonnes of material. This is not major bulk material disposal but rather a high-quality material handling operation.

This repository project would provide the solution to the greatest unmet need of the nuclear fuel cycle, the long term or final disposal of nuclear waste.

6. National and International Issues

Any further involvement of Australian companies in the nuclear fuel cycle beyond mining uranium will depend on changing the public perception of nuclear energy. The problems in the nuclear power plants at Fukushima, coupled with the perception of disasters at Three Mile Island and Chernobyl have once again caused politicians and governments to overreact to perceived dangers of nuclear power.

However, if climate change policies force the closing of coal fired base load power stations then nuclear power generation has the viable low CO2 emission replacement technology. Although it may take the experience of brownouts and blackouts before this is seen as a universal truth.

Internationally Australia has been very thorough in establishing safeguards against the misuse of uranium. Australia is a party to the Nuclear Non-Proliferation Treaty (NPT) as a non-nuclear weapons state. The safeguards agreement under the NPT came into force in 1974 and Australia was the first country in the world to bring into force the Additional Protocol in relation to this, in 1997. In addition to these international arrangements Australia requires customer countries to have entered a bilateral safeguards treaty which is more rigorous than NPT arrangements. These treaties have been an obstacle to selling uranium to India. While the United States has managed to reach a safeguards agreement we have not but it may be imminent.

Perhaps the greatest contribution that Australia can make to non-proliferation and more generally enhancing the security of nuclear power users around the Pacific and Indian Oceans is the development of a repository for spent nuclear fuel. There are very good reasons to host spent fuel and waste from any source. Australia's twin stabilities, geological and political, offer important advantages as a destination country.

Conclusions

Australia plays no part in the enrichment or disposal of uranium fuel. Despite the creation of a new enrichment technology, there does not at this time appear to be an opportunity for participation in plant development.

There is a very substantial potential role for Australia to play in the safe disposal of used uranium fuel. The time scale for general agreement, site selection, planning, negotiation and construction is likely to be 10 to 20 years. If started now, it could be the beginning of a major contribution to the Australian economy with $2 billion revenues annually by simply taking 2,000 tonnes of spent fuel rods generated from our exports of uranium ore. This could rise substantially if the facility gained international acceptance. Australia would also be positively contributing to regional and global concerns about the use of nuclear power.

The limitation to any development remains political opposition to the further development of nuclear power.