An overview of the Uranium Institute's 22nd Annual Symposium, held in London, 3-5 September 1997. Complete papers are available by following the links below.
A 1997 Symposium Programme containing both HTML and PDF links is also available.
Record numbers of participants from around the globe and throughout the nuclear industry converged on London for the Uranium Institute's 22nd Annual Symposium in early September. They were treated to a thought-provoking programme looking at the past, present and particularly the future of the nuclear industry.
The tone and content of the symposium was set by the first session looking at future energy and nuclear opportunities in the context of sustainable development. Hans Blix, in his keynote address, was bullish in his conviction that a nuclear revival is inevitable, while Jean-Marie Bourdaire of the International Energy Agency talked of nuclear's possible, but by no means assured, role within the bounds of sustainable development. If nuclear is to convince its detractors that it is serious about its long-term future, it must continue to invest in R&D beyond the issue of waste management.
More MWd/tU
Better utilisation of uranium's energy potential than is achieved at present in once-through or single-recycle fuel cycles is essential, according to Sue Ion of BNFL.
The challenge is to develop appropriate low cost recycling and acceptance of plutonium as an energy source. The use of MOX fuel is vital in fostering acceptance of recycling, but the capability and skills base needed to underpin fast neutron reactor technology must still be maintained if multiple recycle is ever to be realised. Fully MOX-loaded advanced LWRs, high temperature reactors, fast neutron reactors, perhaps accelerator-driven sub-critical assemblies and molten salt systems were identified as areas for development. Recycling and improved fuel efficiency would play a part in a holistic fuel cycle with each stage optimised from the outset to produce minimal, tractable waste streams.
A closer look at the possible shapes of 21st century reactors - the internationally developed Gas Turbine-Modular Helium Reactor (GT-MHR), evolutionary LWRs in the forms of ABB's advanced System 80 PWR and BWR 90 designs - was provided by Malcolm La Bar of General Atomics and Stefan Olsson.
View from Vienna
A more general overview of the future for nuclear was provided by Peter Jelinek, who presented a succinct overview of the IAEA International Symposium on Nuclear Fuel Cycle and Reactor Strategies: Adjusting to New Realities, held in June 1997 and co-sponsored by the OECD Nuclear Energy Agency and the Uranium Institute. Jelinek observed that nuclear had, in some countries, lost its competitive edge. In so doing he introduced a theme was to recur many times throughout the Symposium: competition.
Even in contemplating potential reactor and fuel cycle developments, the industry must look to competitiveness, and there is clear recognition that the opportunities presented by climate change can only be seized by a competitive nuclear industry.
Compete and survive
The question the nuclear energy industry should be asking itself is not so much can it survive in a competitive environment, but rather can it survive without competition, according to Bruce Lacy of IES Utilities. Under a rate regulated system, utilities can only expect a fixed rate of return. Financial rewards are insufficient to justify taking financial risks, resulting in business strategies with financial risk reduced to the minimum. This manifests itself in: stagnation of design and ownership; wide variations in operational performance; negative signals to investors; and a situation where the nuclear regulator must provide the impetus for plant improvements and developments, as there is little financial incentive for utilities to do more than the minimum to meet regulatory standards.
In a competitive market, business strategy aligns performance improvements with opportunity for financial reward. The rate of return is not set, and utilities can reap the financial fruits of investment in their own performance. Lacy exhorted the nuclear industry not to fear competition but to embrace it, for although some existing plants may not survive the transition, in the longer term competition would breathe new life into the industry.
Restructuring in the US could mean the closure of perhaps 40% of the country's nuclear power plants, according to Milton Whitfield. Uncertainties in pricing trends (including increased fossil fuel costs because of environmental controls), O&M costs and potential regulatory actions contribute to make nuclear's future in the restructured US market far from clear. The need to compete effectively is a certainty in this uncertain world.
Robin Jeffrey of British Energy described the experience of the UK's nuclear industry within a competitive electricity market.
The regulator's perspective
Dr Shirley Jackson, Chairman of the US Nuclear Regulatory Commission, took the changes facing nuclear industry and their regulatory aspects as the theme for her day two keynote speech. Plutonium storage and disposition, the privatisation of the US Enrichment Corporation, the shift of Department of Energy operations away from self-regulation and the restructuring of the US electric power industry all raise new questions and challenges for the regulator, and Dr Jackson looked at the role of the NRC within these areas.
Converters concur
While the nuclear industry must compete efficiently with other generation options, some of this efficiency will stem from competition within the nuclear fuel cycle itself. One speaker in the session on the uranium conversion industry described conversion as the forgotten child of the nuclear business, but the speakers were in general agreement about its characteristics.
The conversion market has for many years been characterised by excess primary supply. Supply and demand are currently pretty much at equilibrium, but the potential for future instability and uncertainty was widely acknowledged. Future demand looks likely to exceed nameplate capacity and secondary sources of supply, such as government HEU surpluses and recycling both in MOX fuel and of reprocessed uranium, are expected to play a part in meeting that demand. The US-Russia HEU agreement, while likely to be a significant source of secondary supply, was agreed to have many areas of political, economic and logistical uncertainty.
Geoff Varley of NAC International found little incentive for conversion suppliers to invest in large scale capacity expansion in the short and medium term, but advised utilities to look to their security of supply, partly because of the uncertainties surrounding the US-Russia HEU agreement. Varley's conclusion: no need to panic, but every need for buyers and suppliers to analyse the future UF6 market.
Philippe Canaux of Comurhex described the US-Russia HEU agreement as inherently unstable, although the recent agreement in principle between Cogema, Cameco, Nukem and Russia for the purchase of a large part of the HEU had gone some way to removing uncertainties. Canaux was upbeat that the deal could still run smoothly. He stressed the importance of a financially strong and reliable supplier in guaranteeing utilities security of procurement. Speaking for Converdyn, James Graham made a plea for the industry to work with facts rather than 'perception and uncertainty' in making its demand projections. This would enable fuel buyers, suppliers, traders and governments to make 'prudent, responsible decisions', leading to a competitive market with adequate, secure supply from a diversity of sources.
Russian fuel cycle
Since the collapse of the Soviet Union, Russia and the countries of the former Soviet Union (FSU) have continued to play a role in various capacities within the international nuclear fuel market. Minister Viktor Mikhailov (Minatom), a late addition to the Symposium programme, described the current situation of the Russian nuclear industry. Russia now has only one working uranium mine, at Priargunsky, and is actively reducing its mined inventory, Mikhailov told the audience. However, Russia has known uranium deposits of some 500 000 tonnes and has plans to produce 11-12 000 tonnes per year from deposits in the South Urals, Western Siberia, and in the area east of Lake Baikal, by 2010. Andrei Gagarinski (Kurchatov Institute) went on to describe the importance of nuclear power in Russian energy policy, and the economic and political climate in which Russian nuclear power, and other generation options, must currently operate.
Alexander Pavlov (NAC International) considered the impact of the changes in political systems and the introduction of free market economies on the nuclear enterprises within these countries. The domestic nuclear market in the former Soviet Union has remained, effectively, closed - in fact, according to Pavlov, nuclear fuel markets do not yet, in reality, exist in these countries. The evolution of the nuclear fuel cycle in the FSU from a centrally-planned economy has resulted in the situation where little internal competition exists, although this could be set to change in all sections of the domestic fuel cycle, from the uranium market through to power generation. It would not be impossible over the next few years to see the development of a situation where Russia is looking to import uranium rather than using its own stockpiles, with enrichment services provided by several independent companies and fabrication by two Russian plants competing with themselves and overseas companies to supply fuel to independent utilities.
The disposition of surplus weapons HEU through the US-Russia HEU agreement has already been mentioned, but Russia also has surplus weapons-grade plutonium. Guy Bousquet (COGEMA) described the COGEMA-Siemens joint project, in partnership with Minatom, to construct a MOX fuel plant in Russia for use in the plutonium disposition process. The first stage of the project to design and build the DEMOX plant was completed in June 1997; it is hoped that a decision on the construction of DEMOX will be made in 1998.
Fuelling the future
Nuclear's long term future depends upon assured long term sources of raw materials for nuclear fuel. Symposium sessions looked at primary sources of supply - uranium - and the secondary sources likely to play an increasing role in the fuel cycle.
Uranium mining entered the arena with a colourful presentation by the Hon Keith Goulet, driving home the mutual benefits to be enjoyed by developer and indigenous people when the human dimension is included in development plans. Goulet, a Cree Metis born and raised in northern Saskatchewan, was the first aboriginal member of the Provincial Cabinet of Saskatchewan. His impassioned presentation, describing the steps taken to encourage and increase the participation of northern Saskatchewan First Nations and Metis residents in the development of the province's uranium resources, demonstrated what could be achieved when development in a poverty-stricken region gives people the opportunity to fulfil their potential.
Narrowing the focus to the status of uranium mining and ISL operations, papers were given on projects - and projects-to-be - in Canada, Australia, the US and Kazakstan. Cameco's high-grade McArthur River project contains an estimated 160 000 tU, but the average ore grade of 15% makes radiation control a primary factor in the design of mine and plant layout and selection of equipment and ore processing procedures. Production from the orebody should begin in 1999, only 11 years after it was discovered. However, the Kintyre deposit in Western Australia now looks set to remain under care and maintenance until market conditions become more favourable, even though the social, political and technical barriers which served to delay its development have now largely been overcome.
ISL plans
Kazakhstan featured in two presentations. Paul Carroll of World Wide Minerals described the vicissitudes of doing business in the new states of Central Asia, while Glen Catchpole of Uranerz looked more specifically at the Inkai ISL project in south-central Kazakhstan. Inkai has a reserve base of some 104 000 tU of probable and proven reserves. A Uranerz-Cameco-KATEP joint venture plans to build a 385 tU/year mining facility employing a fusion of KATEP-developed ISL technology and Western instrumentation, controls and organisation, starting up around the turn of the century.
Another ISL project 'on the brink of realisation' is the Honeymoon project in South Australia. Like Kintyre, Honeymoon's development was postponed by the Three Mines Policy. However, Southern Cross hopes to start demonstration stage operation at Australia's first ISL uranium project in 1998, with commercial operation by the millennium.
Secondary sources
The US-Russia HEU deal featured again in the final session of the symposium. Bill Szymanski, of the US Department of Energy's quasi-independent Energy Information Administration (EIA), did not doubt that the US and Russian governments would have ample incentives, from non-proliferation and financial considerations, to make surplus inventories available to the international nuclear fuel market. By 2002, he anticipated, government surplus inventories would supply 25% of the Western World's reactor requirements, falling to just under 20% by 2010. In the longer term, in all the scenarios developed by EIA, supply from US and Russian surplus inventories was not expected to close the gap between current levels of primary uranium production and projected demand, although the possible reduction in nuclear capacity through unanticipated early plant retirements introduced a note of uncertainty in demand.
Primary uranium supplies could be in a more competitive situation in the period to 2010, and secondary supply will win the battle for future sales, according to the speculations of Tom Pool of International Nuclear Inc. Secondary supply from military inventories is essentially a very low cost source: it has no associated costs other than what it might be worth on the market, as the governments concerned do not need to recoup their outlay on material bought for military purposes as long as half a century ago. Most of the costs associated with civilian inventories are also sunk costs, Pool argued, and reprocessed materials (in the short term) are not particularly cost sensitive. In the increasingly competitive nuclear fuel industry of the future, Pool said, secondary sources will be the first choice of supply as such material will be available almost regardless of the overriding market conditions, unlike primary production which must at least be able to cover its costs. Higher cost primary producers would be particularly vulnerable.
To end with the blunt assessment of an informed observer of the industry, banquet speaker Richard North, 'Get your economics right and you've got little to worry about but pin all your hopes on the greenhouse effect and you're mad.'