Senior Partner & Managing Director
Related Expertise Energy & Environment
Governments and industry have debated several options for managing used fuel in the 40 years during which nuclear power generation has spread across the industrial world. Countries using nuclear energy have adopted different strategies ― some pursuing a “recycling” strategy in which used nuclear fuel is treated and then reused as a component of new reactor fuel and some pursuing a “once-through” strategy in which untreated used fuel is stored, later to be emplaced in a permanent geological repository.
For the last 20 years, the U.S. have pursued development of a geologic repository for used fuel disposal ― the once-through strategy ― at Yucca Mountain in Nevada. The key benefits of that strategy are: a) capacity to handle all legacy used fuel (estimated at 54,000 metric tons in 2005, currently stored at nuclear power plants); b) capacity to handle additional used fuel discharged after a period of cooling and interim storage, provided that additional repository capacity is available; and c) no further need for handling or processing of used fuel after disposal which, to that extent, makes the once-through strategy a complete lifecycle solution.
DOE 2001 cost estimates for a U.S. repository that is capable of storing a total quantity of 83,800 tons of commercial used fuel indicate a lifecycle investment of about $46B, not including costs for interim storage at power plants.2 Over the last decade, however, several factors have led to questions about the appropriateness of the once-through fuel cycle as an exclusive used fuel management strategy. In particular:
These changes make it important to further investigate recycling as part of a comprehensive nuclear waste management strategy and complementary to an exclusive once-through strategy.
In this context, BCG performed an independent study, funded by AREVA, to review the economics of the back-end of the nuclear fuel cycle and, in particular, of developing a recycling strategy in the United States. The study takes into account the specificities of the U.S. context (such as the need to handle legacy fuel) and considers possible complementarities with the current Yucca Mountain repository project. It also considers elements beyond economics, such as flows of used fuel, financing requirements and potential risk management benefits.
Those objectives were achieved using two analytical approaches. The first is a theoretical comparison of, on the one hand, the estimated long-term cost of recycling used fuel and, on the other, the possible cost of a repository to handle the same used fuel in a once-through strategy. This comparison is referred to as the “Greenfield” approach. The second approach involves comparison of, on the one hand, recycling as a solution that would complement development of the Yucca Mountain repository, termed the “Portfolio” strategy, and, on the other, a pure oncethrough strategy that will require additional repository capacity in the future. This second approach is referred to as the “Implementation” approach.
Where applicable, BCG leveraged AREVA know-how and proprietary data from over twenty years of nuclear recycling experience. The data from AREVA operations, supplemented by site visits and additional analyses were used by BCG as a starting point for an independent, third-party assessment of the recycling strategy. BCG triangulated on and verified key economic drivers ― particularly those related to recycling ― using its experience in industrial cost assessment, the value of scale, operating experience, and the like. In addition, BCG developed bottom-up estimates and triangulations for key gaps, such as transport and storage. Finally, BCG leveraged existing publicly available sources of information on repository economics, updating for known and accepted changes. The conclusions are as follows.
In the Greenfield approach, the overall discounted cost of recycling used fuel is in the order of $520/kg, comparable to the cost of a once-through strategy, estimated at about $500/kg, especially considering uncertainties that surround many of the variables used in the assessment, such as uranium price and repository costs.
In the Implementation approach, the cost of a portfolio strategy, based on a new integrated recycling plant opening in 2020 and handling 2,500 tons/year, combined with development of a repository (Yucca Mountain) for high-level waste from recycling (HLW-R) and untreated legacy fuel, has a total net present cost of $48-53B. That assessment is based on a treatment process, COEXTM, that does not separate pure plutonium at any point in the recycling plant. The net present cost of an exclusive once-through strategy with Yucca Mountain and an additional repository is estimated at $47-50B. Total undiscounted life cycle cost for the recycling strategy is about $113B, compared to about $124-130B for the once-through strategy in which a larger portion of the cost is deferred. Once again, given the intrinsic uncertainties of the assumptions used in this study, the economics of the two strategies are comparable.
This study is aimed at back-end economics and does not enter into discussion of additional topics or criteria such as public acceptance, environmental or non-proliferation issues, even though BCG acknowledges their importance for decision makers as they weigh the merits of alternativechoices. The study does not explicitly address or discuss potential legislative actions required to pave the way for a recycling strategy in the U.S.
As with all other options, the recycling strategy involves some issues that need to be addressed. In particular, successful implementation would require:
In addition, recycling, as part of a portfolio strategy, presents a number of benefits:
The benefits are compelling enough to warrant further consideration of recycling as a complementary approach to developing Yucca Mountain capacity.
The report is structured as follows: after a brief account of the context and methodology (section 1), the key alternatives for used nuclear fuel management are described and key economic results provided, for both the Greenfield approach and the Implementation approach (section 2). Then, more detailed results for cost analyses, fuel flows, financing and risk management are presented (section 3). Key implementation challenges that a U.S. recycling strategy would have to overcome to be successful are addressed (section 4). Finally, overall conclusions are drawn (section 5). Detailed information on specific assumptions, methodologies and key economic results are presented in the appendix.
References are footnoted at the bottom of each page. Some figures are footnoted within the figures themselves to clarify statements or assumptions that might not have been self-evident.
This report was prepared by The Boston Consulting Group at the request of AREVA. BCG reviewed publicly available information and proprietary data provided by AREVA, but did not undertake any independent verification of the facts contained in those source materials. Changes in these facts or underlying assumptions could change the results reported in this study. Any other party using this report for any purpose, or relying on this report in any way, does so at their own risk. No representation or warranty, express or implied, is made in relation to the accuracy or completeness of the information presented herein or its suitability for any particular purpose.