Many world powers have sped-up plans to introduce new nuclear power plants in a bid to reduce reliance on fossil fuels and decarbonise. Due to the high energy demand, many countries around the globe view renewable energy as insufficient in the mid-term to provide enough energy to meet the needs of the growing world population. However, nuclear power could provide a low-carbon alternative, offering abundant energy and low emissions. However, experts now worry that the global reliance on Russian uranium to power many of these projects could put many world leaders in a quandary, having already introduced sanctions on Russian energy and attempted to reduce their reliance on Russia. Earlier this year, the U.S. announced a $6 billion bailout for its existing nuclear plants. The government and the Department of Energy (DoE) partnered on a scheme to help nuclear plants across the country facing severe economic challenges to support the longevity of U.S. nuclear power, as part of the country’s green transition. Despite being controversial, nuclear power is considered carbon neutral, and therefore key to transitioning away from fossil fuels. Since then, the launch of Biden’s Inflation Reduction Act (IRA) has encouraged greater investment in the nuclear energy sector. It offers a variety of subsidies, including a production tax credit to help preserve the existing fleet of nuclear plants and tax incentives for the development of new nuclear reactors.
While developing its nuclear assets demonstrates a step forward in the movement to carbon neutrality, the U.S. has one very big challenge to overcome for its nuclear power plants to be a success – its reliance on Russian uranium. The type of uranium that U.S. nuclear reactors require to run is only sold commercially by one company in the world, a subsidiary of the Russian State Atomic Energy Corporation (ROSATOM). At present, U.S. nuclear firms buy around half of the uranium they use from state-owned companies in Russia, Kazakhstan, and Uzbekistan. Scott Melbye, Executive Vice President at Uranium Energy Corp., stated “We estimate that there is more than $1 billion in annual U.S. dollar purchases of nuclear fuel flowing to ROSATOM.” Related: Gazprom Eyes Fast-Growing Chinese Market As Its Exports Plunge By 50%
To date, no sanctions have been imposed on ROSATOM due to the ongoing global reliance on the group to run nuclear power operations worldwide. This seems somewhat counterintuitive seeing as the U.S. and Europe have led global efforts to decrease reliance on Russian energy in favour of alternative sources, imposing strict sanctions on Russian oil and gas.
The U.S. is attempting to improve its uranium market, with an IRA investment of $700 million in support of the development of a national supply chain for high-assay low-enriched uranium (HALEU). The DoE believes this move will help decrease the country’s dependence on Russia for 20 percent of the enrichment and conversion services required for its nuclear fuel supply. But this is a long way off providing countries worldwide with the alternative needed to wean themselves off Russian uranium, as several world powers make plans for new nuclear projects over the next decade.
In December, reports suggested that Bill Gates’ company, TerraPower, will face major delays in the development of its advanced reactor demonstration due to its ongoing reliance on Russian uranium. TerraPower expects two years of delays or more on its nuclear development in Wyoming, which was expected to be completed by 2028. Chris Levesque, the CEO of the firm, explained “In February 2022, Russia’s invasion of Ukraine caused the only commercial source of HALEU fuel to no longer be a viable part of the supply chain for TerraPower, as well as for others in our industry.” He added, “Given the lack of fuel availability now, and that there has been no construction started on new fuel enrichment facilities, TerraPower is anticipating a minimum of a two-year delay to being able to bring the Natrium reactor into operation.”
The plant, like many others, relies on HALEU, which is enriched between 5 percent and 20 percent, compared to the uranium-235 fuel enriched up to 5 percent, which some older plants run on. TerraPower, the DoE, and other stakeholders are currently exploring alternatives to HALEU fuel. The firm is also lobbying to encourage lawmakers to approach $2.1 billion in funding for HALEU production. Wyoming Senator John Barrasso stated, “America must re-establish itself as the global leader in nuclear energy,” Barrasso said in a written statement. “Instead of relying on our adversaries like Russia for uranium, the United States must produce its own supply of advanced nuclear fuel.”
While the U.S. and other countries worldwide have big plans for the future of nuclear power, as part of a green energy transition, the industry is unlikely to progress much so long as its reliance on Russian uranium continues. Unless an alternative uranium production source emerges, many nuclear projects could well be delayed until alternative sources are found, or an agreement is reached with Russia – meaning long-term energy dependence on an unpredictable power.
By Felicity Bradstock for Oilprice.com
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