Centrus signs to complete HALEU demo in 2023 as the DOE prepares draft RFP

December 6, 2022, 9:49AMNuclear News
These gas centrifuges operated in the Piketon facility from 2013 to 2016 as part of a 120-machine low-enriched uranium demonstration cascade. (Photo: Centrus Energy)

Centrus Energy confirmed on December 1 that its wholly owned subsidiary American Centrifuge Operating signed a contract with the Department of Energy, which was first announced on November 10, to complete and operate a demo-scale high-assay low-enriched uranium (HALEU) gaseous centrifuge cascade.

The DOE owns and Centrus leases the facility in Piketon, Ohio, which houses the 16-machine HALEU enrichment demo project. As part of a previous cost-shared contract signed in 2019, Centrus installed centrifuges and secured a license amendment from the Nuclear Regulatory Commission in June 2021 to enrich uranium up to 20 percent fissile U-235, making it the only U.S. facility currently licensed by the NRC to produce the HALEU feedstock that many advanced reactors will require.

Scale-up? The DOE is preparing a request for proposals for offtake contracts to stock a HALEU bank through its HALEU Availability Program, with a focus on a sustainable commercial supply chain. The Inflation Reduction Act provided $700 million to initiate the program, including $500 million designated for the long-term offtake contracts themselves. The DOE is seeking 25 metric tons of HALEU per year—as metal, oxide, and uranium hexafluoride—to fuel diverse advanced reactor designs.

Representatives of three enrichment companies that would like to take the DOE up on the offer of contracts—Centrus, Urenco, and Global Laser Enrichment—joined others from government and industry at the 2022 ANS Winter Meeting for a panel session that explored the economics and challenges of licensing and deploying new enrichment capacity for a hard-to-quantify market.

In its December 1 press release, Centrus indicated it could take three and a half years to add a full-scale cascade if a decision is made to do so: “Separate from the operations contract, Centrus could scale up the Piketon facility with additional centrifuge cascades for expanded HALEU production—given sufficient additional funding or offtake contracts. A full-scale HALEU cascade with a capacity of approximately 6,000 kilograms of HALEU per year (6 [metric tons of uranium]/year) could be brought on line within about 42 months of securing the funding to do so; an additional cascade could be added every six months after that.”

On money and performance: As was previously announced, the base contract value for the HALEU demo is valued at about $150 million in two phases through 2024. Phase One includes a cost-share contribution from Centrus of about $30 million—matched by the same from the DOE—to finish construction, bring the cascade on line, and demonstrate production of 20 kilograms of 19.75 percent HALEU by the end of 2023. Under Phase Two of the contract, production would continue for a full year at an annual rate of 900 kilograms. The DOE would have the option to buy up to nine additional years of production from the cascade beyond the base contract.

The cost-plus-incentive-fee basis of Phase Two of the contract has a value of about $90 million, subject to appropriations, and would leave the DOE as owner of the HALEU.

“Centrus is strongly committed to pioneering production of HALEU to support the deployment of the next generation of reactors and help meet the surging global demand for carbon-free energy,” said Centrus president and chief executive officer Daniel B. Poneman. “Bringing the demonstration cascade on line and starting HALEU production represents a critical step toward restoring a domestic enrichment capability for the nation. We are dedicated to excellence in the execution of our responsibilities under this contract.”

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