© 2016 Nuclear Energy Agency

Nuclear Energy Agency

The Economics of the Back End

of the Nuclear Fuel Cycle

Geoffrey ROTHWELL, PhD, Principal Economist

Nuclear Energy Agency, Division of Nuclear Development

Organisation for Economic Cooperation and Development

geoffrey.rothwell@oecd.org

Topical Meeting under the Joint Convention

Challenges and Responsibilities of

Multinational Radioactive Waste Disposal Facilities

International Atomic Energy Agency (IAEA), Vienna-VIC

5-7 September 2016

© 2016 Nuclear Energy Agency

NEA, The Economics of the Back End of the

Nuclear Fuel Cycle (2013) Paris: OECD.

A study by the Division of Nuclear

Development of the Nuclear Energy Agency

of the OECD:

Chapter 1. Introduction: Management of

radioactive waste in NEA member countries

Chapter 2. Description of various options and

current SNF/HLW management policies

Chapter 3. Modelling the economics of back-end

options

3.1. Discussion of key quantitative economic

parameters and factors

3.2. High-level estimates of key cost

parameters for near-term, back-end strategies

3.3. Overview and comparison of existing

studies on the economics of the back end

Chapter 4. Other factors influencing back-end

options

Chapter 5. Summary, conclusions and

recommendations

http://www.oecd-

nea.org/ndd/pubs/2013/7061-

ebenfc.pdf/ 2

© 2016 Nuclear Energy Agency

3

Figure 3.4: Time profiles for implementing

direct disposal and partial recycling strategies

2010 2030 2050 2070 2090 2110 2130

Interim storage of spent MOX

Reprocessing of UOX

MOX fabricaiton

Encapsulation of spent MOX and REPUOX

HLW vitrification

Final disposal

Interim storage of spent UOX

Encapsulation

Final disposal

NPP operation

Rec

yclin

g of

SN

FD

irect

dis

posa

lN

PP

Construction of facilities Operation Closure/decommissioning

© 2016 Nuclear Energy Agency

4

• Overnight cost of facilities

• O&M costs

Input dataFunction

of capacity Data

parameterisationBack-end scenarios

per MWh, per kgHM

Levelised costs:

Generic front-end data:

• Cost of Uranium

• Enrichment cost, etc

Economic assumptions:

• Discount rate

• Size of the system, etc.

© 2016 Nuclear Energy Agency

Updated Objective and References

5

Objective: Calculate the economies of

scale for a Generic Interim Storage

Facility (GISF) with high security for

40,000 MTHM

PRIVATE FUEL SERVICES L.L.C. “Application for a License to

Construct and Operate a Spent Fuel Storage Facility.” Docket No.

72-22, U.S. Nuclear Regulatory Commission (June1997).

http://pbadupws.nrc.gov/docs/ML0103/ML010320524.pdf

ENERGY RESOURCES INTERNATIONAL. “Cost Estimate for an

Away-From-Reactor Generic Interim Storage Facility (GISF) for

Spent Nuclear Fuel,” EPRI, Palo Alto, CA. #1018722 (May 2009).

http://www.epri.com/abstracts/Pages/ProductAbstract.aspx?Product

Id=000000000001018722

© 2016 Nuclear Energy Agency

Private Fuel Services Facility

6

The following analysis is based on the Private Fuel Services Facility

(PFSF) in Skull Valley, Utah; see US NRC, Final Environmental Impact

Statement for the Construction and Operation of an Independent Spent

Fuel Storage Installation on the Reservation of the Skull Valley Band of

Goshute Indians and the Related Transportation Facility in Tooele County,

Utah, NUREG-1714, Office of Nuclear Material Safety and Safeguards,

Washington, DC (December 2001).

Much of the expected cost information is from PFS, “Private Fuel Storage

Facility License Application” (1999). PFS was owned by eight U.S.

electric utilities with its headquarters in La Crosse, Wisconsin.

On February 21, 2006, the US NRC issued a license to PFS to build and

operate a 40,000 Metric Tons of Heavy Metal (MTHM, 4,000-cask, 500-

pad) facility, where each cask holds 10 MTHM with a 100 m2 footprint

inside a 40 hectare storage area on approximately 360 hectares —>

© 2016 Nuclear Energy Agency

Artist Rendition of Private Storage Facility

7

http://www.deq.utah.gov/Pollutants/H/highlevelnw/opposition

/docs/2006/05May/LEG_PFS_051706.pdf

© 2016 Nuclear Energy Agency

GISF with high security

for 40,000 MTHM: Capital Costs

8

No No No

Access Access Access

40 hectares 40 hectares 40 hectares

No 40,000 MTHM No

Access in 4,000 casks Access

40 hectares on 40 hectares 40 hectares

rail access Secure Access No No

Guard House* Most Buildings Access Access

road access 40 hectares 40 hectares 40 hectares

Rothwell, “Scale Economies in a Series of Generic Interim SNF Storage Facilities,” Proceedings of the

International Congress on Advances in Nuclear Power Plants, ICAPP 2015, Nice, France (May 3-5, 2015).

© 2016 Nuclear Energy Agency

GISF Organizational Chart:

Operations and Maintenance Costs

9

Guidance Document for Measuring Employment Generated by the Nuclear Power Sector,

Nuclear Energy Agency, NEA, and International Atomic Energy Agency (September 2016).

"Administration" Sector = 17 "Protection" Sector = 35

12 Adm 4 Office 1 General 1 Quality 1 Quality

Staff Managers Manager Assurance Assurance

Officer Auditor

1 Lead 1 Lead 1 Chief 1 Radiation 1 Emergency 1 Security

Nuclear Instrument/ Mechanic Protection Prep Captain

Engineer Electrician Manager Coordinator

4 Nuclear 3 Shift 0 Chief 3 Shift 3 Shift

& other Supervisors Canister Supervisors Supervisors

Engineers Mechanic

Minimum

"Production" Total

Sector = 6 Instrument 12 Supervisors 6 Radiation Number of 18 Security

28 & Electrical and Protection Employees Guards

Technicians Mechanics Technicians 80

© 2016 Nuclear Energy Agency

Total and Average Cost

10

Total Cost = Fixed Cost (potential output)

+ Variable Cost (actual output)

Average Cost = Total Cost/Output

= Fixed Cost/Output + Variable Cost/Output

= Average Fixed Cost + Average Variable Cost

If Fixed Cost is zero, then unit cost is equal to Average

Variable Cost, and Average Cost is equal for each unit.

If Variable Cost is zero, then unit cost is equal to

Average Fixed Cost, and Average Cost declines with

each additional unit. This is the case for much of the

nuclear fuel cycle!

© 2016 Nuclear Energy Agency

Minimum Efficient Scale (MSE)

11

$0

$100

$200

$300

$400

$500

0 10 20 30 40 50 60 70 80 90 100 110 120

$/

un

it

Max Capacity

MES increases with fixed cost

Minimum Efficient Scale =

MES = where unit cost is within 10% of

hypothetical asymptotic value

10%

© 2016 Nuclear Energy Agency

GISF Scale Economies

12

Rothwell, “Scale Economies in a Series of Generic Interim SNF Storage Facilities,” Proceedings of the

International Congress on Advances in Nuclear Power Plants, ICAPP 2015, Nice, France (May 3-5, 2015).

$0

$100

$200

$300

$400

$500

0 10 20 30 40 50 60 70 80 90 100 110 120

$/

kg

Max MTHM

Levelized Cost (Average Cost) with High Security

Levelized Cost

without High Security

MES =50,000 MTHM

without High Security

$138

$148

MES =110,000 MTHM

with High Security

MES = Minimum Efficient Scale

MES < 90% x Asymptotic Value

© 2016 Nuclear Energy Agency

GISF Scale Economies

by Country Fleet Size

13

$0

$100

$200

$300

$400

$500

0 10 20 30 40 50 60 70 80 90 100 110 120

$/k

g

Max MTHM

5 NPPs

10 NPPs

2 NPPs

25 NPPs

50 NPPs 100 NPPs

Because of strong economies of scale,

countries with less than 25 NPPs are much

better off by consolidating their interim

spent fuel storage!

© 2016 Nuclear Energy Agency

The Economics of the Back End

of the Nuclear Fuel Cycle

This is only one segment in determining the total

economics of the back end of the nuclear fuel cycle!

Much of the back end (as well as the front end) is

capital intensive, hence there are high fixed costs

and positive economies of scale, implying that the

larger the facility, the lower are the per unit costs.

Beyond this analysis, we have the economic problem

of how to determine the value of the benefits. What

most analyses do, instead, is calculate the cost

difference between various back end options, such

as once-thru, twice-thru, or complete recycle.

What are these benefits? We need a consensus!