Anne Baschwitz Gilles Mathonnière How can we anticipate the evolution of the uranium cost to define when Fast Reactors will become competitive against Light Water Reactors? Anne Baschwitz Gilles Mathonnière CEA I-tésé 3rd Technical Workshop On Fuel Cycle Simulation Paris July 9-11, 2018

We want to define the kWh production cost for each type of reactor. When would FR become competitive against LWR? We want to define the kWh production cost for each type of reactor.  Question of the uranium price and its evolution over the reactor’s life time FR: Fast Reactors LWR: Light Water Reactors

Competitiveness of FRs in relation to LWRs: Agenda Competitiveness of FRs in relation to LWRs: Cost of natural uranium: from supply curve to projected cost curve over time Modelling a forecast of all the uranium costs Equivalent kWh cost and competitive horizon Key parameters for the FR’s competitiveness Conclusion

Definition of the uranium supply curve Take into account a long-term global evolution rather than the effects of short-term market volatility on the prices Not a market value balancing supply and demand A merit order curve of Uranium A very simplified uranium cost model, where the production cost of natural uranium is determined as a function of the quantity already extracted. It will be independent of the world's nuclear installed capacity and the reactor’s type deployed.

Example of supply curves Based on some Red Book information (IAEA and OECD/NEA)   U1: a pessimistic view, only the current identified resources and then after resources with a very low uranium content such as that from seawater U2: all the currently estimated conventional resources plus additional resources found in significant quantities U3: very optimistic, considers that with a cost increase it will always be possible to find new resources.

Example of the increasing cost of natural uranium over time Increasing cost of uranium over time Example of the increasing cost of natural uranium over time Scenario B

Competitiveness of FRs in relation to LWRs: Agenda Competitiveness of FRs in relation to LWRs: Cost of natural uranium: from supply curve to projected cost curve over time Modelling a forecast of all the uranium costs Equivalent kWh cost and competitive horizon Key parameters for the FR’s competitiveness Conclusion

Uranium costs The first core → Unat cost of the year when the decision is taken to invest All the reloads 𝑻𝒐𝒕𝒂𝒍 𝑼 𝒓𝒆𝒍𝒐𝒂𝒅 𝒄𝒐𝒔𝒕 𝒏 = 𝒊=𝒏 𝒏+𝟓𝟖 𝑼𝒏𝒂𝒕𝑪𝒐𝒔𝒕 𝒊−𝟏 . 𝑸 𝒊−𝟏 𝟏+𝒂 𝒊−𝒏−𝟏 a: the discount rate UnatCost (i) : the natural uranium cost in year i Q(i) : the quantity of natural uranium needed for fabrication of the year i reload n : the year of the reactor’s industrial commissioning We should know the increasing cost of natural uranium over the 60-year service life of the reactor

Which uranium cost shall we consider? But on the date the decision is taken to build, we only know: - The already consumed uranium The uranium cost of that particular year The committed uranium: The quantity of uranium for the future reloads of the reactors already in service. The increasing cost of uranium must be estimated→ modelling a forecast 𝑻𝒐𝒕𝒂𝒍 𝑼 𝒓𝒆𝒍𝒐𝒂𝒅 𝒄𝒐𝒔𝒕 𝒏 =𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑪𝒐𝒔𝒕 𝒏 . 𝒊=𝒏 𝒏+𝟓𝟖 𝑸 𝒊−𝟏 (𝟏+𝒂 ) 𝒊−𝒏−𝟏

Average cost of uranium Average Cost = UnatCost →UnatCost=constant over the whole life-time Optimistic position Average Cost = UcomCost cost of the consumed and committed uranium would be more pessimistic Average Cost = UavCost cost of the arithmetic mean of the “Total consumed Unat” and “Total consumed and committed Unat” Scenario A2 - Supply curve U2

Competitiveness of FRs in relation to LWRs: Agenda Competitiveness of FRs in relation to LWRs: Cost of natural uranium: from supply curve to projected cost curve over time Modelling a forecast of all the uranium costs Equivalent kWh cost and competitive horizon Key parameters for the FR’s competitiveness Conclusion

When will FRs become competitive against LWRs? We use the LCOE method For a reactor r: LWR kWh Cost(t)= LWR Inv Cost + LWR Op Cost + LWR Cycle Cost(t) FR kWh Cost= FR Inv Cost + FR Op Cost + FR Cycle Cost LWR kWh Cost(t) = FR kWh Cost Equivalent uranium average cost Competitive time frame for the FRs

Competitiveness time frame?

Competitiveness of FRs in relation to LWRs: Agenda Competitiveness of FRs in relation to LWRs: Cost of natural uranium: from supply curve to projected cost curve over time Modelling a forecast of all the uranium costs Equivalent kWh cost and competitive horizon Key parameters for the FR’s competitiveness Conclusion

FRs competitiveness Parameter Effect of an increase in the parameter on the date of competitiveness Supply of uranium U1 to U3 uranium supply curve  Nuclear electricity production demand  Additional investment cost of FRs in comparison with LWRs  5 to 7 year reactor construction time  60 to 80 year reactor operating lifetime  Discount rate of 4 and 2% to 8 and 3% Arrows pointing to the right indicate that competitiveness is delayed, Arrows pointing to the left indicate that competitiveness is advanced. The more arrows, the greater the impact.

Competitiveness of FRs in relation to LWRs: Agenda Competitiveness of FRs in relation to LWRs: Cost of natural uranium: from supply curve to projected cost curve over time Modelling a forecast of all the uranium costs Equivalent kWh cost and competitive horizon Key parameters for the FR’s competitiveness Conclusion

Conclusion Assumptions on uranium supply curves An evolution of the uranium cost over time depending on: the installed nuclear power and the types of reactors deployed Take into account the increasing cost of uranium over the whole operation lifetime A better assessment of the FR’s competitiveness Big differences in the horizon of competitiveness according to the hypotheses

Thank you for your attention A. Baschwitz et al.  When would fast reactors become competitive with light water reactors? Methodology and key parameters. Progress in Nuclear Energy, https://doi.org/10.1016/j.pnucene.2017.05.028 | PAGE 18 | PAGE 18