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Centrus keeps contract to produce high-assay low-enriched uranium

28 November 2022

The Department of Energy declines to reveal whether any other bidders participated in a competitive procurement whose outcome seemed preordained.

The Department of Energy on 10 November awarded a $150 million cost-shared contract to Centrus Energy to produce high-assay low-enriched uranium (HALEU), a specialized fuel required for certain types of advanced nuclear reactors. Although DOE solicited competing bids for the procurement, Centrus was all but certain to get the business, since the agency stipulated that the work be performed at Centrus’s enrichment facilities.

In 2019 DOE awarded Centrus a $119 million sole-source contract to build a 16-centrifuge enrichment demonstration cascade at a DOE-owned plant in Piketon, Ohio. After several lawmakers complained that others should be offered the opportunity to supply HALEU, the department suspended the procurement phase of the 2019 contract and in February put it out for bids. Department officials declined to disclose whether they received other proposals. The Piketon facility is the sole US plant licensed by the Nuclear Regulatory Commission to produce HALEU. Russia is currently the only source of HALEU for commercial sale.

Centrus centrifuge.
Centrus’s demonstration facility consists of 16 centrifuges like this one. Credit: Centrus Energy

The initial phase of the new contract covers final construction of the centrifuge cascade and production of 20 kg of HALEU, in the form of uranium hexafluoride, by the end of 2023. DOE and Centrus will split the $60 million cost. A second phase, funded by DOE at $90 million, calls for delivery of 900 kg by the end of 2024. The contract includes multiple three-year options.

Highly enriched uranium, which is considered a proliferation threat, is enriched in uranium-235 above 20%. HALEU has 6–19.75% 235U enrichment, and material at the high end of that range will be necessary to fuel many advanced reactors. Those include the sodium-cooled fast reactor that TerraPower and GE Hitachi Nuclear Energy plan to build in Wyoming with $2 billion in DOE funding and the four high-temperature gas-cooled reactors that X-energy will build with $1.2 billion from DOE. The 2021 Infrastructure Investment and Jobs Act appropriated $2.5 billion of those funds. (See Physics Today, November 2021, page 25.) Both reactor projects are scheduled for completion by 2028.

The Inflation Reduction Act, enacted in August, appropriated $700 million toward establishing a domestic supply chain for HALEU. DOE anticipates purchasing up to 25 tons of HALEU annually from suppliers in the US for a fuel bank, according to responses posted on 15 November to questions the agency received from industry. In a conference call with investors the week prior, Centrus CEO Daniel Poneman, a former deputy secretary of energy, said that while the appropriation in the new law won’t be sufficient to meet DOE’s plans, it indicates a strong commitment by Congress and the administration to advanced reactors. Given the capacity of Centrus’s 16-centrifuge demonstration cascade and the use of low-enriched uranium feedstock, 25 tons of HALEU production would require 480 of its centrifuges.

DOE projects a demand for more than 40 tons of HALEU by the end of the decade, with additional amounts required each year depending on commercial demand. Centrus says it has spent $3 billion of its own money developing its proprietary 12-meter-tall centrifuges over several decades. DOE has contributed hundreds of millions to developing an earlier version of the Centrus technology, including $270 million for a previous cost-shared demonstration of a 120-centrifuge pilot plant in Piketon. Those centrifuges were scrapped as the company made improvements to the technology.

Centrus demonstration plant.
Dozens of centrifuges form a cascade in Centrus Energy’s pilot plant, which operated from 2013 to 2016. Credit: Centrus Energy

Meanwhile, Urenco, the European consortium that operates the sole uranium enrichment plant in the US, also is proceeding with plans to produce HALEU. According to Magnus Mori, vice president for marketing and sales, Urenco is looking to add HALEU capability either at its Eunice, New Mexico, plant or at a facility in Capenhurst, UK. At a cost of $250 million to $400 million, Urenco could produce material enriched up to 20%, Mori told the American Nuclear Society winter meeting in Phoenix, Arizona, on 14 November. That project would take six to seven years, including the time required to prepare a license application and receive regulatory approval, he said.

Mori tells Physics Today that a decision on whether to proceed to construction will be made upon completion of ongoing design and engineering work.

Defense needs

Centrus’s technology remains in the running should the National Nuclear Security Administration decide to construct a multibillion-dollar uranium enrichment plant to meet nuclear weapons and naval nuclear propulsion needs. In its fiscal year 2022 stockpile management plan, the agency says it intends to decide on an enrichment technology in the mid 2020s. The proposed plant would be designed to produce uranium at varying enrichment levels, from low-enriched (4–5%) to weapons-grade (93% or greater) 235U. The NNSA continues to support a centrifuge technology that is in development at Oak Ridge National Laboratory, the plan says.

Centrus’s $120 million award came from DOE’s civilian Office of Nuclear Energy and does not include any funding for new centrifuges. An NNSA spokesperson says that the semiautonomous agency isn’t funding R&D on the Centrus technology, though it will consider data generated by the HALEU demonstration project in making its final technology determination.

Despite its domestic presence, Urenco would be prohibited by current US nonproliferation policy from supplying uranium for military purposes. According to US interpretation of treaties, the company is ineligible because it is foreign-owned and because the company’s centrifuge technology was developed outside the US.

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