Alex Kimani

Alex Kimani is a veteran finance author, investor, engineer and researcher for Safehaven.com. 

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• NextEra Power is exploring the reopening of the Duane Arnold nuclear plant amid rising knowledge middle curiosity however stays cautious on the viability of small modular reactors.
• SMRs, although promising by way of smaller dimension, decrease gas wants, and modular design, face important challenges.
• Excessive manufacturing prices for HALEU, estimated to achieve as much as $25,725/kg, pose a considerable monetary hurdle.

Per week in the past, renewables utility firm NextEra Power (NYSE:NEE)  delivered a wholesome third-quarter earnings report. Throughout the third quarter earnings name, CEO John Ketchum informed buyers that the corporate is presently evaluating the potential of reopening its Duane Arnold nuclear energy plant in Iowa amid rising curiosity from knowledge middle firms. 

In line with Ketchum, Duane Arnold’s boiling water reactor makes it simpler to restart and function economically in comparison with different nuclear energy crops. Nevertheless, Ketchum stated he was “not bullish” on small modular reactors (SMRs), including that the corporate’s in-house SMR analysis unit has thus far not drawn favorable conclusions in regards to the know-how.

“A whole lot of [SMR equipment manufacturers] are very strained financially,” he stated. “There are solely a handful that actually have capitalization that would truly carry them by means of the following a number of years.”

Ketchum may need a legitimate level. 

Small modular nuclear reactors (SMRs) are superior nuclear reactors with energy capacities that vary from 50-300 MW(e) per unit, in comparison with 700+ MW(e) per unit for conventional nuclear energy reactors. Given their smaller footprint, SMRs might be sited on places not appropriate for bigger nuclear energy crops, corresponding to retired coal crops. Prefabricated SMR items might be manufactured, shipped after which put in on website, making them extra inexpensive to construct than giant energy reactors. Moreover, SMRs are supposed to supply important financial savings in value and development time, and may also be deployed incrementally to match rising energy demand. One other key benefit: SMRs have lowered gas necessities, and might be refueled each 3 to 7 years in comparison with between 1 and a pair of years for typical nuclear crops. Certainly, some SMRs are designed to function for as much as 30 years with out refueling.

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The U.S. Division of Power has thus far spent $1.2B on SMR R&D and is projected to spend almost $6B over the following decade. Final 12 months, the U.S. Nuclear Regulatory Fee (NRC) licensed NuScale Energy Corp.(NYSE:SMR) VOYGR 77 MW SMR in Poland, the primary ever SMR to be accepted within the nation.

However there’s a giant drawback right here as a result of the gas required to energy these novel nuclear crops is likely to be actually costly.

Three years in the past, U.S. Nuclear Regulatory Fee (NRC) accepted Centrus Power Corp.’s (NYSE:LEU) request to make Excessive Assay Low-Enriched Uranium (HALEU) at its enrichment facility in Piketon, Ohio, turning into the primary firm within the western world exterior Russia to take action. A 12 months later, the U.S. Division of Power (DoE) introduced a ~$150 million cost-shared award to American Centrifuge Working, LLC, a subsidiary of Centrus Power. HALEU is a nuclear gas materials enriched to a better diploma (between 5% and 20%) within the fissile isotope U-235. In line with the World Nuclear Affiliation, purposes for HALEU are presently restricted to analysis reactors and medical isotope manufacturing; nevertheless, HALEU will probably be wanted for greater than half of the SMRs presently in improvement. HALEU is just presently obtainable from TENEX, a Rosatom subsidiary.

Centrus estimates {that a} full-scale HALEU cascade–which entails scaling-up its 16-centrifuge cascade on the Piketon plant to 120 centrifuges–could produce ~6,000 kg/y of the gas. Nevertheless, the corporate says that ramp-up would require “adequate funding and offtake commitments.” Nonetheless, it represents a fraction of the 40 metric tons of HALEU the DoE estimates will probably be required by the sector by 2030.  A 2023 survey by the Nuclear Power Institute on U.S. superior reactor builders estimated that the full marketplace for HALEU might attain $1.6 billion by 2030 and $5.3 billion by 2035.

Final 12 months, the Nuclear Innovation Alliance (NIA) printed a report whereby they mentioned manufacturing prices for HALEU.  Right here’s an excerpt from the report:

‘‘Calculated HALEU manufacturing value for uranium enriched to 19.75% is $23,725/kgU for HALEU in an oxide kind and $25,725 for HALEU in a metallic kind beneath baseline financial assumptions however may very well be larger.’’

The report claims {that a} SWU (Separative Work Unit) goes to value much more in a HALEU enrichment cascade in comparison with an ordinary LEU (Low-Enriched Uranium) enrichment cascade. SWU is the usual measure of the hassle required to separate isotopes of uranium (U235 and U238) throughout an enrichment course of in nuclear services(1 SWU is equal to 1 kg of separative work). NIA estimates {that a} LEU SWU will value $150 however {that a} HALEU SWU will value $1,000. In line with the NIA, to economize, you’d make low-enrichment uranium first, then use the produced LEU because the feed for a HALEU enrichment cascade.

Supply: Power From Thorium

NIA reckons it may cost ~$2000/kgU to make HALEUF6 into HALEUO2, and as a lot as $4000/kgU to make HALEUF6 into HALEU-metal. On the finish of the day, you’d find yourself with  HALEU with 28 occasions the fissile content material of pure uranium at over 100 occasions the worth. In an attention-grabbing weblog, Kirk Sorensen, founding father of Flibe Power, has labored out that it will value anyplace from $10-$20/MWh on gas prices alone to generate electrical energy from HALEU, multiples larger than for normal nuclear crops the place gas prices account for a small a part of the general electrical energy invoice.

However, don’t hand over on SMR tech simply but: Centrus’ shares have tripled over the previous 5 weeks after the corporate signed a nuclear gas provide deal with Korea Hydro & Nuclear Energy (KHNP). The acquisition dedication from KHNP covers a decade of deliveries of Low-Enriched Uranium (LEU) to assist gas Korea’s giant fleet of reactors.

Supply: Searching for Alpha

By Alex Kimani for Oilprice.com

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