The Centrus Fiasco

Here's an example of the kind of nuclear ``subsidy" that has killed nuclear in the USA and is now stomping on its grave, an example that shows the nuclear power establishment is far more interested in gobbling up tax payer money, than producing cheap, low CO2 electricity. Here's what I wrote in 2020.

Under our stifling regulatory system, nuclear power technology has stagnated for 50 years. The light water reactor plants being build in Georgia today look and are very similar to the plants that were built in the 1970's. The light water reactor is a klunky, brute force technology. There are a number of concepts that have been proposed that promise to provide nuclear electricity more cheaply and efficiently. Many of these designs work best on nuclear fuel that has been enriched in U-235 to just below the legal limit of 20%. This fuel is known as HALEU. For starters, at least 40 tons of HALEU is required, just to test these designs. But as of 2019, no USA enrichment facility was licensed to produce more than 5% U-235, the preferred fuel of the light water reactor.

In 2019, DOE awarded a $115 million dollar contract to Centrus Energy to produce ``up to 600 kg'' of 19.75% enriched fuel. Centrus is supposed to produce this fuel with a 16 machine cascade using AC-100M centrifuges. These experimental centrifuges, whose development was funded by the US taxpayer, have never worked to spec and have never produced a commercial ounce of enriched fuel of any percentage.

The President of Centrus is Daniel Poneman, who took that job in 2015. Prior to that, Poneman had been the Deputy Secretary of Energy at DOE. Under his tenure in 2012, DOE transferred 300 million dollars of uranium from the US stockpile to Centrus, then known as USEC, to be enriched in a failed attempt to prop up the enterprise. The Government Accountability Office found that DOE had no authority to do this and these transfers violated federal law. In 2013 USEC declared bankruptcy.

USEC was the old DOE gas diffusion enrichment facilities at Paducah, Kentucky and Piketon, Ohio which had been privatized in 1998. Gas diffusion enrichment is an energy hog and in the 1990's and early 2000's was replaced by centrifuging which requires 50 times less energy. USEC was not able to make that transition, despite or perhaps because it was continually being propped up by the DOE with taxpayer money, much of it doled out by Poneman. When USEC came out of bankruptcy in 2014, the clouded name was changed to Centrus.

The DOE could have awarded the HALEU contract to an outfit called Urenco. Or better allowed Urenco to bid on the job. Urenco has a large, successful commercial enrichment facility in Eunice, New Mexico.

(To produce HALEU from an existing cascade of centrifuges only requires that the cascade be operated in a different configuration. The Russians design their cascades with the proper piping and valving, so that they can produce a range of enrichments with the same cascade.)

Urenco was prepared to quote a fixed price for whatever amount of HALEU DOE wanted to buy with delivery starting in 2021. The reason given by DOE for selecting Centrus is that it was the only US owned entity that is capable of producing HALEU. Leaving aside the fact that Centrus's capability has not been demonstrated --- quite the contrary --- Urenco is majority owned by the UK, Dutch and French governments, America's close allies. Moreover, the Urenco plant is in New Mexico licensed by and under the total control of the US government. It is staffed almost entirely by Americans.

Centrus will produce little or no HALEU. It is not in the business of producing enriched fuel and has not been for a long time. It is in the business of funneling taxpayer money to a particular congressional district, some lobbyists, and some politically connected executives. Poneman went from making $178,000 per year at DOE to 1.5 million at Centrus. Much worse, Urenco is now prohibited from producing HALEU in the US. DOE policy ensures that there will be no affordable HALEU produced in the US in the foreseeable future. This is the kind of nuclear ``subsidy" that has killed nuclear in the USA and is now stomping on its grave.

The above words were written in 2020. What has happened since then? The 2019 contract, which was supposed to produce ``up to 600kg'' has produced zero HALEU. That 119 million dollars has disappeared. So in December, 2022, the DOE signed an additional $150 million dollar contract with Centrus. Under the first phase of the contract, Centrus is supposed to produce 20 kg of HALEU by December, 2023. Under the second phase, Centrus is supposed to produce 0.9 tons of HALEU in 2024. For 269 million taxpayer dollars, the country might get 0.92 tons of HALEU.

The developers of the new technologies knew that Centrus was never going to deliver 40 tons of HALEU. They had another, far cheaper, far more reliable source, the Russians. Now with that source cut off by the Ukraine war, new nuclear technology in the US is dead in the water. The Department of Energy and its beneficiaries are congratulating themselves.