The Economics of Reprocessing vs. Direct Disposal of Spent Nuclear Fuel

Executive Summary

For decades, there has been an intense debate over the best approach to managing spent fuel from nuclear power reactors, whether it is better to dispose of it directly in geologic repositories, or reprocess it to recover and recycle the plutonium and uranium, disposing only of the wastes from reprocessing and recycling. The relative costs of reprocessing vs. not reprocessing are one important element of these debates. Economics is not the only or even the principal factor affecting decisions concerning reprocessing today. But economics is not unimportant, particularly in a nuclear industry facing an increasingly competitive environment. At a minimum, if reprocessing is being done to achieve objectives other than economic ones, it is worthwhile to know how much one is paying to achieve those other objectives.

While some analysts have argued in recent years that the costs of reprocessing and direct disposal are similar, and that reprocessing will soon be the more cost-effective approach as uranium prices increase, the data and analyses presented in this report demonstrate that the margin between the cost of reprocessing and recycling and that of direct disposal is wide, and is likely to persist for many decades to come. In particular:

• At a reprocessing price of $1000 per kilogram of heavy metal (kgHM), and with our other central estimates for the key fuel cycle parameters, reprocessing and recycling plutonium in existing light-water reactors (LWRs) will be more expensive than direct disposal of spent fuel until the uranium price reaches over $360 per kilogram of uranium (kgU).a price that is not likely to be seen for many decades, if then.

• At a uranium price of $40/kgU (comparable to current prices), reprocessing and recycling at a reprocessing price of $1000/kgHM would increase the cost of nuclear electricity by 1.3 mills/kWh. Since the total back-end cost for the direct disposal is in the range of 1.5 mills/kgWh, this represents more than an 80% increase in the costs attributable to spent fuel management (after taking account of appropriate credits or charges for recovered plutonium and uranium from reprocessing).

• These figures for breakeven uranium price and contribution to the cost of electricity are conservative, because, to ensure that our conclusions were robust, we have assumed:

-  A central estimate of reprocessing cost, $1000/kgHM, which is substantially below the cost that would pertain in privately financed facilities with identical costs and capacities to the large commercial facilities now in operation.

-  A central estimate of plutonium fuel fabrication cost, $1500/kgHM, which is significantly below the price actually offered to most utilities in the 1980s and 1990s.

-  Zero charges for storage of separated plutonium or removal of americium.

-  Zero additional security, licensing, or shut-down expenses for the use of plutonium fuels in existing reactors.

-  A full charge for 40 years of interim storage in dry casks for all fuel going to direct disposal, and no interim storage charge for fuel going to reprocessing.

Even though most new reactors are built with storage capacity for their lifetime fuel generation, so few additional costs for interim storage need be incurred.

-  Geological disposal of spent MOX fuel at the same cost as disposal of spent LEU fuel.

• Reprocessing and recycling plutonium in fast-neutron reactors (FRs) with an additional capital cost, compared to new LWRs, of $200/kWe installed will not be economically competitive with a once-through cycle in LWRs until the price of uranium reaches some $340/kgU, given our central estimates of the other parameters. Even if the capital cost of new FRs could be reduced to equal that of new LWRs, recycling in FRs would not be economic until the uranium price reached some $140/kgU.

• At a uranium price of $40/kgU, electricity from a plutonium-recycling FR with an additional capital cost of $200/kWe, and with our central estimates of the other parameters, would cost more than 7 mills/kWh more than electricity from a oncethrough LWR. Even if the additional capital cost could be eliminated, the extra electricity cost would be over 2 mills/kWh.

• As with reprocessing and recycling in LWRs, these figures on breakeven uranium price and extra electricity cost for FRs are conservative, as we have assumed:

-  Zero cost for providing start-up plutonium for the FRs.

-  Zero additional cost for reprocessing higher-plutonium-content FR fuel.

-  Zero additional cost for manufacturing higher-plutonium-content FR fuel.

-  Zero additional operations and maintenance costs for FRs, compared to LWRs.

• Costs for the far more complex chemical separations processes and more difficult fuel fabrication processes needed for more complete separation and transmutation of nuclear wastes would be substantially higher than those estimated here for traditional reprocessing. Therefore the extra electricity cost, were these approaches to be pursued, would be even higher. Arguments for separations and transmutation to limit the need for additional repositories rest on a number of critical assumptions that may or may not be borne out in practice.

• World resources of uranium likely to be economically recoverable in future decades at prices far below the breakeven price amount to tens of millions of tons, probably enough to fuel a rapidly-growing nuclear enterprise using a once-through fuel cycle for a century or more.

In this report, we have focused only on the economic issues, and have not examined other issues in the broader debate over reprocessing. Nevertheless, given (a) the costs outlined above; (b) the significant proliferation concerns that have been raised (particularly with respect to those reprocessing approaches that result in fully separated plutonium suitable for use in nuclear explosives); and (c) the availability of safe, proven, low-cost dry cask storage technology that will allow spent fuel to be stored for many decades, the burden of proof clearly rests on those in favor of investing in reprocessing in the near term.