Loan guarantee secured by Areva

21 May 2010

An earlier version of this story stated that the DoE's addition of an extra $2 billion in loan guarantees for fuel cycle facilities reduced the amount available for power plants by the same amount. This is not correct and the total in guarantees for power plants stands at $16.5 billion.


The second US nuclear loan guarantee has been announced as destined for the Eagle Rock uranium enrichment plant. The $2 billion award uses up half the current pot for fuel cycle facilities.


The receipt of a conditional award from the Department of Energy (DoE) was announced by Areva yesterday. The head of the company's North American subsidiary, Jacques Besnainou, said he was "elated." He linked the project to the strengthening of US energy security and the generation of low-carbon power that the enriched uranium would go on to fuel.


Eagle Rock, near Idaho Falls and the Idaho National Laboratory, will be a centrifuge-based uranium enrichment plant with a capacity of about 6.6 million separative work units per year. The $2 billion loan guarantee supports a large part of the total cost of the project and should help Areva raise private capital. The DoE put the cost of Eagle Rock at $3.3 billion.


Areva said "the project must satisfy certain conditions before the loan guarantee can be issued, including the receipt of all appropriate licenses and permits."


A construction and operating licence application is currently with the Nuclear Regulatory Commission which Areva hopes will allow it to begin construction next year and start operating in 2014, ramping up to full capacity over five years. This can be done by introducing cascades of centrifuges in a modular fashion based on the company's order book.


The plant will be similar to a new Areva's Georges Besse II facility at Tricastin, which is based on centrifuge technology licensed from Urenco. That company, meanwhile, is drawing near to operating its own new enrichment plant in New Mexico which it has constructed without the help of loan guarantees.


Another player in the US enrichment market is USEC, which wants to bring forward domestically developed centrifuges but has faced technical and financial troubles that are delaying the DoE's decision on its loan guarantee application.

The DoE has worked hard to help USEC with extensions of decision deadlines and various acts of cooperation. It also expanded the allocation of guarantees for fuel cycle facilities from $2 billion to $4 billion with an extra allocation that did not affect the $16.5 billion for power plant development


Some $8.33 billion of this has already gone to the partners of the Vogtle project, leaving $8.17 billion in guarantees - more than enough for one large reactor but probably not enough for a twin-unit development. This leaves US nuclear developers looking to a further batch of $36 billion in loan guarantees requested by President Barack Obama for the FY2011 budget.
Researched and written
by World Nuclear News