Stephen M. Goldberg, Robert Rosner, and James P. Malone
The American Academy’s Global Nuclear Future (GNF) Initiative continues to
advance effective policies and procedures that help minimize the international security
and nonproliferation concerns associated with the spread of nuclear power. The Initiative’s
leaders and advisors have identified several interconnected questions that must
be addressed simultaneously in order to arrive at pragmatic recommendations for
a sustainable new nuclear regime, both in the United States and abroad. These include:
- Most terrorist prevention plans focus on protection against external threats. What
impact do insider threats have on the security of nuclear facilities?
- How can nuclear fuel cycle management options and advances in nuclear energy technologies
promote or mitigate the dual-use security risk? How will multilateral fuel cycle
arrangements support a safer and more secure expansion of civil nuclear energy programs?
How will the increasing number of nuclear newcomers (nations developing or aspiring
to have civilian nuclear energy programs) affect national, regional, and international
nonproliferation policies? How can we ensure that emerging exporters of nuclear
technology will coordinate policies to minimize proliferation dangers?
Some of these questions are addressed in the paper Nuclear Collisions:
Discord, Reform & the Nuclear
Nonproliferation Regime, by Steven Miller.1 Our paper covers two of the main themes from Nuclear Collisions:
namely, that nuclear aspirants should use realistic economics when making decisions
about nuclear energy programs; and that international bodies such as the International
Atomic Energy Agency (IAEA), the Nuclear Suppliers Group, and other formal and informal
bodies should respect the interests and rights of nuclear aspirants.
A significant focus of the GNF Initiative has been the back-end of the nuclear fuel
cycle,2 specifically in the international context. This paper
addresses the question of whether it is possible to design a consensus-based approach
to the back-end that, if fully executed, would limit proliferation risks. We consider
this complex question by examining the possibilities for a viable back-end arrangement
in the South and East Asia regions. These regions are the trend-setters; energy-security
worries dominate discourse in East Asia and the developing countries in South Asia,
where nuclear energy is seen as an important supply source to meet electricity needs.3
We describe an innovative regional storage concept that provides a built-in safety
valve; that is, if recycling technology advances sufficiently to provide a proliferation-resistant
and economically advantageous fuel cycle, and if future energy-security concerns
require revisiting the uranium supply-and-demand balance, then the used fuel stored
at an interim site could potentially be considered a valuable commodity. We recognize
that our proposal requires further study and refinement, and we are cognizant of
the formidable challenges ahead, including (1) preserving the inalienable rights
of a state,4 whether as a customer or a provider of services;
(2) making our proposal economically attractive to potential customers; (3) attracting
a state to host an interim storage facility; and perhaps the most difficult challenge
(4) fusing together interests that run the gamut from immediate fuel recycle with
current technology to a permanent ban on any current or future advanced partitioning
and potential recycle technology. To address the last point, the character and scope
of a back-end R&D program located in a host state will need further development
than what is documented in this paper. In our opinion, the character and scope of
the R&D program is crucial to ensuring that we have a safer and more secure
nuclear energy future. We offer preliminary thoughts on this matter, in full recognition
that they will require additional input from all stakeholders.
We emphasize four specific actions in this paper:
Expanding the playing field. India and China are key in influencing future international arrangements, specifically
in terms of their R&D endeavors. Both countries are important because of their
explosive growth and their influence in the East and South Asia regions. If the promise for developing and
deploying more proliferation-resistant technology is to be fulfilled, China and India
will have to play a significant role.
- Expanding participants and providing
flexibility in a multilateral deal. Adequate capitalization is important for any nuclear fuel cycle
venture. For our proposal, we designated a portion of the payments made by legacy
holders of used fuel to provide working capital for the back-end venture; the proposal
has been designed so that nuclear aspirants have the opportunity to opt in and out
over time. We present a market-based approach that provides sufficient cash flow
to sustain long-term fuel storage activities.
the host state of a back-end facility. Sufficient incentives need to be put
on the table to attract a host state. We have designed two incentives: (1) one-time
fee payments that the host can use as collateral for its infrastructure upgrades;
and (2) a robust R&D initiative, including the possibility of siting a demonstration
facility within the host state. In addition, our proposal would require a relatively
small footprint, thereby mitigating siting issues for the host state.
- Breeding success. In establishing a multinational fuel cycle regime, whether
focused on the front-end or back-end, it is unlikely that one size will fit all. International
fuel storage is a worthy goal, but previous efforts to create macro fuel supply
and disposition approaches have revealed this task to be very large and likely too
expensive. We have designed a region-centric approach, one that would initially have
a relatively small footprint. Once a workable approach is demonstrated in one region,
other regions will follow when they see success.
These actions are fully consistent with long-standing U.S. policy that does not encourage
new civil use of separated plutonium but that does maintain existing commitments
regarding the civil use of plutonium in established civil nuclear programs, particularly
in Japan and Europe.
We should not lose sight of the significant challenges ahead. In general, countries
in good standing with the IAEA may want to preserve all their fuel
cycle options. For nuclear aspirants and for many existing nuclear states, energy-security
concerns may trump all other geopolitical issues; therefore, used fuel may be viewed
as an asset and not as waste. We continue to address these challenges in our discussions.
Still, we believe that with additional consultations, our proposal will move the
debate in a positive direction.
The GNF Initiative is addressing the safety, nonproliferation, and security concerns
that arise as civil nuclear energy expands, including an emphasis on the back-end
of the nuclear fuel cycle. This paper, we believe, will generate discussion among
international stakeholders, and from these discussions, will help identify common
interests between nuclear weapon states and non-nuclear weapon states. We consider
international proposals to address used fuel management and nuclear waste disposal,
and we examine how these solutions could play an integral part in international
or multinational fuel supply and assurance options. Indeed, many emerging nuclear
states have indicated that they do not need continuous fresh fuel assurances beyond
those in normal contractual terms; rather, they would prefer assistance on the back-end
to deal with used nuclear fuel and nuclear waste management. Therefore, we are exploring
ideas involving the provision of nuclear waste and used fuel disposal options as
incentives to join fuel supply agreements.
We are also cognizant of the findings of the U.S. president’s Blue Ribbon
Commission on America’s Nuclear Future. On January 26, 2012, the Commission
issued its final report, which charts a new strategy for managing the back-end of
the nuclear fuel cycle. The Commission states: “The United States cannot exercise
effective leadership on issues related to the back-end of the nuclear fuel cycle
so long as its own program is in disarray; effective domestic policies are needed
to support America’s international agenda.”5
Commission highlights the need for the United States to employ and adequately fund
a consensus-based approach. It provides several proactive recommendations, including
the creation of a fair and open process for siting back-end facilities, and a reminder
to maintain vigilance and pay careful attention to the lessons learned from the
Fukushima Daiichi accident in Japan. As nuclear aspirants make decisions about ordering
new nuclear capacity in the coming decades, these states will likely not await U.S.
actions in response to the Commission’s recommendations. Appendix I summarizes
the Commission’s findings and compares our proposal with several of the findings.
A group of scholars, government officials, and industry leaders, including representatives
from the United States, Japan, Malaysia, South Africa, Egypt, and the IAEA, convened
in 2009 at Argonne National Laboratory to consider how best to design and promote
solutions for used fuel and multinational disposal facilities while meeting their
mutual nonproliferation objectives. The group examined options for minimizing the
need for independent conventional-reprocessing capabilities and addressed pragmatic
steps toward regional and multinational collaborations on key facilities and activities
at the back-end of the
nuclear fuel cycle. Participants agreed that a better understanding of previous
efforts to achieve back-end solutions—both the failures (for example, attempts
to establish international facilities) and the successes (for example, the national
facilities in Sweden and Finland)—as well as a better understanding of user
concerns and values will be necessary to arrive at a common perspective on how to
engage successfully on these issues.6
As further background to this paper, we recently participated in an American Academy
GNF conference held in Singapore; the conference convened experts and policy-makers
from Southeast Asian non-nuclear weapon states, including states pursuing nuclear
energy programs, to discuss the feasibility and acceptance of interim and long-term
nuclear-waste storage options. The stakeholders and decision-makers7 at the Singapore meeting outlined three key points:
- The regional participants expressed a desire to work collectively to solve regional
issues, following the model of existing regional organizations such as the Association
of Southeast Asian Nations (ASEAN). However, to date, no state in Asia or elsewhere,
including Mongolia, appears to have volunteered to be the first to host a regional
- The demand for used fuel services in Asia, dominated by the
growth spurt in China, will expand significantly and will require at least four
Yucca Mountain-sized repositories (with capacity for at least 280,000 MT) by the
middle of this century.
- The participants representing nuclear fuel consumer
states expressed a strong desire to participate in follow-on discussions and research
on viable back-end approaches; in their view, the nuclear fuel supplier states and
the nuclear fuel suppliers should not be the “exclusive” architects.
To facilitate further discussions with decision-makers and stakeholders in the Middle
East and Southeast Asia, as well as to reflect on the findings and recommendations
of the Blue Ribbon Commission, this paper focuses on both the potential mechanisms
for establishing regional, multinational used fuel storage facilities and the feasibility
of shared ultimate disposal. We draw on the findings from the two meetings described
SETTING THE STAGE
To construct a viable back-end approach, it is important to consider how stakeholders—customers,
fuel suppliers, and host states, among others—would answer the following questions.
- Are price and supply of uranium ongoing concerns for individual states?
In a related vein, is the availability of the co-products of conventional reprocessing,
namely, fissile uranium and plutonium, critical to the calculus of countries to
consider used nuclear fuel as an asset?
- Could the cost of any back-end technology option be a deal breaker in deciding whether
nuclear energy is too expensive?
- Does conventional reprocessing capacity limit
any back-end solution?
- Are there precedent-setting steps a country takes when
it adopts a conventional reprocessing pathway?
- Can we go forward with interim
storage without knowing the final disposition option(s) for nuclear waste?
do we adapt the existing fuel supply network to any back-end approach?
We debate each of these questions and posit our views in Appendix II. In sum, energy-security
issues weigh heavily in each state’s calculus of how to approach the back-end.
States with plans for a small number of nuclear plants cannot economically justify
the investment in conventional or advanced reprocessing. However, for states that
already have nuclear energy, and that have or will have a relatively large number
of nuclear plants (providing greater than 10 GW of installed power), any cost penalties
associated with conventional reprocessing and recycling are likely dwarfed by the
capital costs of constructing new nuclear plants. For all states, the opportunity
to consider a robust interim storage program would outweigh a precipitous decision
by emerging states to commit to conventional reprocessing and recycling using current
technologies. As further background, Appendix III identifies current activities
and plans for back-end services in countries that have existing nuclear power programs.
Appendix IV highlights China’s plans for nuclear energy growth and attendant
In the following section, we discuss the view of many in the international community
on how to secure a nuclear fuel cycle that would limit the spread of fuel enrichment
and conventional fuel reprocessing and recycling capacity. Coupling the front- and
back-ends of the nuclear fuel cycle is important, but the task of arriving at a viable
back-end solution has been more challenging.
States that are interested in coupling the ends of the fuel cycle, such as Russia,
China, India, France, and the United Kingdom, believe that because of energy-security
concerns, it is important to close the fuel cycle. In their estimation, the availability
of a mixed oxide (MOX) fuel inventory would provide them with a so-called hedge in
case of supply interruptions or price spikes for fresh fuel.
GOALS FOR MULTILATERAL FUEL ASSURANCE AND DISPOSITION
Mohamed Mustafa ElBaradei, former IAEA Director General, articulated a three-stage
process for an international fuel cycle regime.8
- First, establish a system for assuring the supply of fuel for nuclear power reactors.
Second, in the future, place all new enrichment and conventional reprocessing or
other chemical partitioning activities exclusively under multilateral control.
Third, convert all existing enrichment and conventional reprocessing or other chemical
partitioning facilities from national to multilateral operations.
The first step was achieved with the recent establishment of the Nuclear Fuel Bank.
On December 3, 2010, the IAEA Board of Governors further authorized the Director
General to establish an IAEA-owned and -managed low enriched uranium (LEU) bank supporting
the multilateral effort to assure LEU supply for power generation. Donors have pledged
roughly US$125 million and €25 million to cover the establishment of the bank
and its initial operational expenses. Although a location for the bank has not yet
been identified, on December 17, 2010, the Russian Federation initiated an LEU reserve
at the International Uranium Enrichment Center (IUEC) in Angarsk, Russia, as a “last
instance” supplier to IAEA member states.9 (Figure 1
identifies the most current organizational structure.) In 2010, Kazakhstan also
proposed that it would host a nuclear fuel bank. On February 8, 2012, Yerzhan Kazykhanov,
Foreign Minister of Kazakhstan, stated that his country hopes to have a fuel bank
facility in operation by late 2013.
Figure 1. IUEC Organizational Structure, as of December 2010
*Acquisition of shares from the Russian share provided that the Russian Federation
maintains control (50 percent + 1 share). JSC stands for jointstock company. Source:
IUEC; Yury Yudin, ed., Multilateralization of the
Nuclear Fuel Cycle: The
First Practical Steps (Geneva, Switzerland:
United Nations Institute for Disarmament Research, 2011). Reprinted with permission
from the International Uranium Enrichment Center, http://www.iuec.ru.
In his remarks at the 2006 IAEA General Conference in Vienna, then-President of the
Nuclear Threat Initiative (NTI) Charles Curtis best captured the virtues of a multilateral
fuel mechanism for the front-end of the nuclear fuel cycle:
Proponents of the establishment of an international back-up mechanism for assured
supply of nuclear power reactor fuel assert that it would have a dual-objective,
i.e., to address: (a) the possible consequences of interruptions of supply of nuclear
fuel due to political considerations that might dissuade States from initiating
or expanding nuclear power programs; and (b) the vulnerabilities that create incentives
for building new national enrichment and reprocessing capabilities.10 Thus, an assurance of supply mechanism would be envisaged solely as a backup
measure to the operation of the commercial market, for those States that want to
make use of it, in order to assure supply in instances of interruption for political
reasons. It would neither
be a substitute for the existing commercial market in nuclear fuels, nor would it
deal with disruption of supply due to commercial, technical or other nonpolitical
reasons. While an assurance of supply mechanism would be designed to give supply
assurance to States that voluntarily choose to rely on international fuel supply,
rather than build their own indigenous fuel cycle capabilities, a State availing
itself of such a mechanism would not be required to forfeit, or in any way abridge,
its rights under Article IV of the NPT [the Nuclear NonProliferation Treaty], in
connection with peaceful uses of nuclear energy.11
EU Foreign Policy Chief Javier Solana provided a larger context in which ideas about
nuclear fuel services play out. In a speech to the European Parliament, he called
for a fuel bank to be established before the 2010 NPT Review Conference: “The
creation of a fuel bank will have a positive impact on the general climate of the
NPT review conference. . . . We cannot afford to fail. If we do we may face more
problems—new States that are tempted to cross the red line and go nuclear.
. . . But if we succeed, we will strengthen the multilateral nuclear nonproliferation
system which is a core EU objective.”12
Beyond these worthy pronouncements, there is an international consensus along three
- Any multilateral mechanism should not disturb the international market for nuclear
fuel cycle services. Multilateral fuel cycle arrangements should be implemented
step by step.
- No uniform approach would be satisfactory for all technologies
and all states, and successful implementation of the multilateralization would depend
on the flexibility of its application.14
–The international commercial market for nuclear fuel services generally functions
well, but the push for an internationalized LEU fuel bank signals the perceived
interest in adding a safety net by way of LEU reserves and, in the longer term,
considering new joint undertakings to accommodate increasing demand.15
As currently conceived, arrangements for assured LEU fuel supply would need
to be financially supported by the international community and administered by the
Any multilateral nuclear fuel supply arrangement should offer a competitive
economic advantage over indigenous development of enrichment and conventional reprocessing
or more advanced chemical partitioning activities.
As pointed out in the Report of the Blue Ribbon Commission (see Appendix I), take-back
of used fuel has always been viewed as a goal of these policies. Take-back entails
moving fuel from nuclear consumer states to either states that can provide fuel
services or states that will store used fuel on an interim or longer-term (several
decades) basis. The Reliable Fuel Supply (RFS) approach is currently being explored,
under the auspices of the International Framework for Nuclear Energy Cooperation
(IFNEC), as a follow-on activity previously established as the Global Nuclear Energy
Partnership (GNEP). The RFS objective would allow states without extensive nuclear
infrastructure to more confidently adopt nuclear power as a low-carbon energy source.
In the long run, the program would provide the nonproliferation advantage of centralized
high-security storage for the resulting irradiated fuel.
With the RFS concept, private companies, backed by a substantial government commitment,
could offer a variety of reliable fuel supply and disposition services, including
interim storage and disposal, at a substantially lower cost than those associated
with comparable indigenous services. In turn, these services could appeal to a variety
of nuclear energy aspirants. The RFS concept seeks to explore opportunities for
multinational arrangements for fuel assurance regimes, encourage discussions between
and among nuclear consumer states, and prepare the way for discussions within the
broader set of participants through the RFS mechanism. In this context, the RFS
concept is structured so that it does not alter the stated goals and objectives
of those members of the IFNEC that have chosen to use conventional fuel reprocessing
technology to close the nuclear fuel cycle. As stated earlier, energy-security concerns
lead several states to place significant value on closing the fuel cycle; the availability
of a MOX fuel inventory, they believe, provides a so-called hedge in case of supply
interruptions or price spikes for fresh fuel. France is actively pursuing a conventional
reprocessing and recycling program that increases the stocks of civil separated
plutonium. India and China have publicly endorsed comparable conventional reprocessing
programs. To address back-end waste management concerns, the Republic of Korea is
planning to undertake pyroprocessing, a batch process that could also potentially
increase the stocks of civil separated plutonium.
Russia has been actively engaged in promoting both a fuel bank (as pointed out above)
and potential storage of Russian-origin fuel on their territory. This arrangement
would be part of a bundled reactor sale arrangement.16 The
Russian proposal comes closest by accepting take-back of nuclear fuel that originated
in Russia. However, their proposal lacks a commitment to either a time or a location
for the disposition of used nuclear fuel. Also, the fuel cycle must fit into their
plans for future reactors, taking into account the type and number of reactors that
will be deployed. In our opinion, it is unlikely that Rosatom, the state company
in Russia that would be charged with this effort, would take back a significant
amount of used fuel from Russian-designed reactors.
Any plans for an “optimal” internationalization of the nuclear fuel
cycle (defined as a sustainable, economic, and secure approach) must include a viable
transition from the current state of affairs. A transition plan must take explicit
account of how the existing fuel cycle arrangements will morph into the proposed
future arrangements, thereby providing a sustainable pathway for a nuclear energy
sector that is likely to grow in the future. Developing a transition plan—without
which any future fuel cycle plans will be moot—requires extensive discussions
between all affected parties, from suppliers to consumers. It is precisely such
discussions that we seek to promote.
An LEU fuel bank17 is only a partial step toward providing
the infrastructure for realistic fuel supply assurance. The missing component is
the fuel fabricator: that is, the entity that transforms the LEU into a physical
form compatible with loading fresh fuel assemblies into light water reactors (LWRs)—
in other words, an entity that fashions (and delivers) completed fuel assemblies
ready to be deployed and installed in operating reactors. The difficulties inherent
in adopting a common international approach cannot be overstated; in the existing
competitive market for fuel fabrication, the details of fuel assemblies are treated
as business-sensitive information by fuel fabricators. That is, the competition in
this arena is not solely related to fuel cost, but also to fuel (and thus
reactor) performance. Fuel fabricators optimize fuel performance by dealing with
issues such as crud formation and fretting (related to cladding deterioration of
the fuel pins); the details of fuel composition and structure; and effective mixing
of the heat transfer fluid (related to optimized heat transfer and overall
reactor power balance). The means by which such issues are resolved are prized intellectual
properties that are not readily (if ever) shared; and the consequent highly optimized,
but closely held, nature of the design of fuel assemblies means that effective operation
of LWRs cannot be carried out in the absence of participation by the fuel fabricators.
Therefore, it is not at all clear how a functional multilateral fuel fabrication
construct would be fashioned, given currently proposed fuel bank approaches. (We
will address this inherent challenge in a subsequent paper.)
The final issue involves the complex question of incentives for a state to serve
as host to a multilateral storage facility, a disposal facility, or both. Incentives
are usually presented in terms of opportunities to create high-value employment and,
in particular, to enhance the state’s scientific and technical knowledge.
We include the views of a variety of parties interested in this subject as commentary
to this paper (see pages 15–17).
In Appendix V, we describe two models that capture the state of play to form multilateral
mechanisms. Deficiencies common to these models include: (1) insufficient start-up
capital to bring a multinational fuel storage or disposal scheme online; (2) a likely
reversion to back-end systems that emphasize conventional reprocessing and recycling,
thus increasing the supply of civil separated plutonium; and (3) fated attempts
to adopt a “one size fits all” approach, creating protracted discussions
over contract and payment terms. These models are not complete; they do not provide
a path to move both nuclear fuel suppliers and consumers away from the status quo,18 and they would likely increase reliance on at-reactor pool storage and
conventional reprocessing technology. In a post-Fukushima context, with heightened
concerns about onsite pool storage of used nuclear fuel, moving as soon as feasible
to consolidated dry cask storage would support a safer and more secure expansion
of nuclear energy.
More specifically, the models we identify in Appendix V lack a detailed transition
plan that describes explicitly how the proposed regime would systematically supplant
the existing fuel supply regime. This absence is a particular issue for the multilateral
fuel lease plan because it would entail substantial reengineering of the legal frameworks
and business models of the existing fuel supply regime.
As discussed above, delivery of fresh fuel assemblies is highly dependent on the
critical role of the fuel fabricator. In the current regime, fuel fabrication is
carried out by firms or other institutions that are subject to either extensive
governmental regulation and oversight or management (or both). Consequently, neither
model is truly effective in assuring nuclear operators that they will have access
to fabricated fuel: that is, to fresh fuel assemblies that can be inserted into
operating reactors. As a result, these models do not provide the level of fuel supply
assurance that operators need. Thus, the existing fuel fabrication market must be
sufficiently robust to mitigate this constraint. Two conditions would further mitigate
this concern: standby capacity of fabricated fuel at utilities in nuclear consumer
states; and premium prices to fabricators for supplying those utilities with fresh
fuel assemblies. In our opinion, this premium would still represent a very small
increment (less than 5 percent) of nuclear fuel costs.
A SPECIFIC PROPOSAL: AN INNOVATIVE STORAGE CONCEPT19
In light of the preceding discussion and review, we propose the development of a
commercial dry cask storage facility for international customers. This proposed
regional storage facility (known in the industry as an independent spent fuel storage
installation) would be designed to store up to 10,000 MT of used nuclear fuel (on
a relatively small footprint) for up to a hundred years; it could be hosted in a
state with or without an established nuclear industry. The capacity and lifetime
of the facility are considered practical estimates and are used for the financial
model contained in this paper. The values could change based on the needs of the
The parties.20 The concept of offering
dry cask storage as a fuel cycle service to international customers is not new.
Various models have been presented within the international nuclear community. Recently,
the concept of reliable fuel services, wherein a fuel supplier could offer fuel
take-back as part of the supply contract, has received increased attention. Our proposed
storage concept is innovative because it is not tied exclusively to new fresh fuel
supply and can be utilized for storage of both legacy and future used fuel inventories.
Legacy used fuel could be delivered from countries such as the Republic of Korea
and Taiwan. In our opinion, the facility would likely hold some interest for Japanese
utilities as well.
Given that the majority of established nuclear states have yet to demonstrate an
ultimate disposal solution, consolidated, dry cask storage could become an efficient,
demonstrated mechanism to relieve on-site fuel pools that are nearing capacity. Many
plants within established nuclear states have relatively low quantities of used
fuel (for example, Taiwan, Mexico, and Brazil); establishing a dedicated dry storage
facility would be economically unattractive because used fuel amounts below approximately
2,000 MT do not benefit from economies of scale.21
Used fuel from new facilities, operated by nuclear utilities, would follow the legacy
used fuel and could be sourced from emerging utilities in states such as the United
Arab Emirates. These emerging states would benefit politically from shipping legacy
used fuel to a safe location that would be under international safeguards. Sentiment
in many states with respect to nuclear power is positive; however, there is still
concern about what to do with used fuel.22 Many issues factor
into this decision, and no one solution is appropriate for all nuclear countries.
Though various chemical partitioning schemes and disposal solutions have been suggested
and demonstrated (to varying degrees of success), many utilities and their respective
countries hesitate when asked to choose the best approach for moving forward. Our
storage concept provides an interim used fuel management solution, one that nuclear
electricity producers can utilize to mitigate the immediate burden of used fuel
management while further technological solutions are developed and political decisions
are made. Our storage concept provides breathing room, giving current R&D activities
in advanced fuel cycle technology time to mature and allowing for the possibility
that used fuel may become a future asset.
Fuel suppliers could also use the facility as a storage site for their cradle-to-grave
services. This arrangement would allow the existing front-end fuel cycle industry
to continue operating as planned while maintaining flexibility on the back-end,
as it does not presume an ultimate outcome for the used fuel.
A distinct advantage of our proposed concept relates to nonproliferation interests.23 If, in the future, an advanced chemical partitioning regime that is
acceptable from a nonproliferation perspective and viable from an economic point
of view should emerge, an amendment to any future government-to-government agreement
could be put in place to maintain flexibility for the client states. With
respect to existing conventional reprocessing capacity, the requirements to forgo
conventional reprocessing could also be imposed on those states with legacy fuel
that wish to take advantage of the opportunity to store their used fuel away from
their reactors. Additional nonproliferation and security benefits associated with
such a facility have been discussed by many authors24 and
will not be revisited here.
The deal. We believe that there is significant flexibility
in how our concept could be implemented. For example, because the facility would
operate on a commercial basis, individual storage contracts could be tailored to
the specific needs of each customer. The storage contracts could be signed in short-term
increments (that is, twenty years) such that at the end of each segment, the customer
and the regional facility operator can decide whether to renew the contract or pursue
an alternative use for the material. The storage contracts could be structured so
that upon acceptance of used fuel for storage, additional fuel assemblies would
be transferred to an internationally sanctioned research facility.
There are several reasons to suggest a commercial approach, in the form of an international
entity,25 for the operation and ownership of the regional
facility. These reasons are primarily associated with the capabilities and responsibilities
of the host-state entities, which may not be fully mature. In the case of a host
state that does not have an established nuclear industry, it may not be necessary
for the host state to develop the technical expertise or monetary backing to own
and operate the regional facility on its own. These tasks could be more easily achieved
by a commercial entity comprised of existing nuclear entities, which could form
a consortium outside the host state. Likewise, the host state would not have to
be solely responsible for funding the infrastructure developments necessary to operate
the facility; revenue to the host state could be paid in the form of a land lease
or other agreement with the consortium. The expertise and capital investment of
the management entity26 would support expedited deployment
of the facility and ensure that industry best practices are in place. If the entity
is a multinational consortium that holds other nuclear facility ownership interests,
it would likely invest significantly in facility safeguards, thus diminishing political
mistrust over proliferation concerns among all parties to the transaction.
Benefits and Concerns for the
Of utmost concern when evaluating international programs is the potential benefit
to the prospective parties, which include, in this case, the host state, the customers,
the management entity, and the global nuclear community. Given the complexities
of the nuclear fuel cycle and the hardened positions from a history of disagreement
over what the optimum future nuclear fuel cycle should be, motivating the parties
to adopt this proposed venture will require more than monetary benefits alone.
For customers, the important feature of the proposed regional facility is
the alleviation of increasing used fuel inventories at reactor fuel pools. The recent
events at Fukushima Daiichi have heightened public concerns about long-term storage
at these pools. In addition, and as pointed out in the previous section, the proposed
regional storage facility could reduce back-end fuel cycle liability for emerging
nuclear states. Some emerging states, such as the United Arab Emirates, have expressed
a desire to mitigate back-end fuel cycle concerns altogether, and would thus consider
it a welcome option for used fuel to be stored long-term outside of their state in
an internationally safeguarded facility. Aside from states with small used nuclear
fuel inventories, it is worth noting the benefit to those states where use of nuclear
power may decline from its current level; for example, as a consequence of heavy
political pressure, German policy-makers recently announced an end to that state’s
nuclear power industry. This concept would prompt such states to remove their used
fuel stockpiles to a regional facility.
For the international nuclear community, the
primary attraction of the proposed facility is the nonproliferation benefits associated
with having a centralized, safeguarded storage facility as opposed to numerous isolated
facilities. This facility would provide a much more economical solution than development
of instate conventional reprocessing, advanced chemical partitioning, or disposal
capabilities, thereby reducing the incentive for emergent nuclear states to pursue
their own back-end fuel cycle capabilities. The primary concern of the international
community would be siting the facility in a state with a stable government and a
strong, transparent relationship with the international nuclear community.
For the host state, fees charged to the facility would generate
revenue; operation and maintenance needs would create jobs; and the owner of the
facility would generate revenue through long-term storage contracts with customers.
Further, the host state could be home to a research facility dedicated to advanced
waste forms, pre-treatment options, and understanding used fuel and storage canister
behavior over extended storage periods (that is, beyond the nominal sixty-year expected
life of existing dry storage systems). Additionally, the host state would benefit
from infrastructure development; indeed, improvements to roads, rail, electricity,
fresh water, and water treatment would all be required to move fuel into and out
of the facility. Thus, the host state would profit directly, from fees related to
the facility, but would also benefit from long-term employment related to facility
operation, security, maintenance, and regulatory functions, as well as opportunities
created by a back-end R&D facility.
The majority of host states are likely to require assurance that the facility will
not become a de facto disposal solution for the region’s used fuel.27 Therefore, some means for removing the material at the end of the agreed-upon
storage period should be maintained or developed. Material could be returned to
the generating state if no agreeable solution is achieved, though over the long
term of storage (potentially a hundred years) it is reasonable to assume that multiple
solutions will be developed. The host state should also require assurances that
government instability in customer states does not affect the terms of their storage
contracts. Some type of monetary penalty or agreed-upon removal option may be needed
for customers that default on their contracts. Likewise, as historical evidence
suggests, states will do whatever they perceive to be in their best interest; therefore,
it may be desirable to provide a safety mechanism to avoid returning used fuel to
a state that does not intend to honor its previous nonproliferation agreements.
Additional benefits could include job creation at facilities that manufacture used-fuel
transportation and storage units. There will also be a need for used-fuel canisters
as well as transportation overpacks and the attendant auxiliary systems and equipment.28
In sum, we believe that the proposed concept offers significant benefits to the
international nuclear community (through enhanced proliferation resistance) while
presenting a reasonable and manageable set of concerns. Our proposal represents
a good starting point for further discussions among interested parties.
Initial Stage of Implementation
and Potential Private-Sector Partners
in Dry Cask Storage
Clearly, such a venture will require, at the initial stages, international cooperation
at the governmental level to establish the agreements and policies necessary for
the facility to function. International assistance in devising and implementing
world-class safeguards and accountability measures would increase the transparency
and overall acceptance of the facility.
The first step in implementing the facility would be to identify a suitable host,
interested commercial fuel storage partners, and potential early customers for initial
storage contracts. A public education campaign should be conducted within the host
state to inform the populace of the risks and benefits related to storing and transporting
used nuclear fuel. Public acceptance of the facility will be critical to its success.
Potential commercial partners should have demonstrated experience in dry cask storage
operations; they might include cask manufacturers, nuclear utilities with current
dry cask storage operations, facility designers, experienced nuclear fuel transporters
(both land and sea), and used nuclear fuel handling and logistics experts.
Each customer may need to establish an agreement with the commercial entity29 representing the host state, though we would not expect such arrangements
to involve significant effort relative to the overall scope of the program. The
international legal framework necessary for this form of commerce requires additional
An agreement to at least one full storage term (for example, twenty years), with
subsequent terms to be decided at set intervals, would provide assured revenue for
the facility and allow the customer to take advantage of new developments that may
occur in used-fuel management. In order to reduce capital outlay and borrowing on
the part of the facility, pre-payment of the fuel acceptance fee prior to delivery
may be required. An annual, per-cask storage fee would also ensure funds for maintenance
and security of the casks during the storage term. A summary of an illustrative
cash flow is presented in Table 1 (below) and is further discussed in the business
Table 1. Innovative Storage Concept—Net Cash Flow
Net Cash Flow
in Operating Year
($1 Million USD)
These estimates assume 75 percent legacy holders and 25 percent new entrants. Source: Table created by authors.
Further Implementation Steps
Security, Safeguards, and Safety. Bilateral agreements between the host state
and customer states will need to be signed to define the nature of storage contracts
and clearly delineate who holds the title and who assumes risk of loss of the material.
The form that such agreements will take should be a topic of early, high-level discussions
among the interested parties; whether the agreements must allow for both commerce
and transfer of sensitive nuclear technologies (such as the U.S. “123 Agreements”)
will depend on the level of technology transfer required to store used fuel in a
given candidate host state. In our opinion, a mechanism directed solely at dry cask
storage and used fuel title transfer may allow for faster implementation than an
agreement permitting the much more general sharing of technologies necessary for
controlled nuclear material and technology transfers. Though it is reasonable to
assume that the host state may wish to pursue peaceful nuclear energy at some future
date, the host state concerned could sign that agreement at an appropriate time
in the future.
Successful implementation of the program will require multilateral assistance to
the host state in the area of regulatory oversight. The host state will need an
independent nuclear regulator—preferably with close ties to an existing regulatory
body and a transparent mode of operations—to provide assurance not only to
the citizens of the host state but also to the international nuclear community.
The regulator would be charged to protect public health and safety by licensing
the facility and the storage and transportation of used fuel for the regional facility owner/operator within the host
state. If the host state already has a regulating body in place, then ensuring its
independence and transparency would be the primary concern. If not, the process
of establishing a regulator would greatly benefit from the assistance of international
regulatory bodies as well as regulators in states with established nuclear programs.
Existing regulatory best practices and experience with establishing new regulators
in emergent nuclear states offer a framework for the host state’s regulatory
Regulations and guidelines for implementation should be defined early in the process.
Though the regulator should be an independent body, the regional facility owner/operator
should maintain regular communication with the regulator to ensure timely implementation
of the program.
- Storage Contracts. Dry cask storage has been demonstrated at many facilities around
the world and requires no new technology development (that is, not for the nominal
life of forty to sixty years). Thus, the most difficult task in implementing the
regional storage facility may be negotiating storage contracts with customers. The
terms of the storage contracts will likely need to be determined on a case-by-case
basis with each customer; differences in national laws and capabilities will likely
make turn-key contracts impractical. For example, state A may not allow title of
its used fuel to be held by another state while state B may make this allowance
but prohibit transportation of used fuel within its borders by a foreign entity.
States with small quantities of used fuel that have yet to implement dry storage
practices may require assistance with container loading and transfer to a shipping
vessel—capabilities that other states have readily available. Part of the
regulatory process within the host state should require characterization of the
used fuel; this process will likely call for an agent to the owner-operator of the
regional storage facility to be present during container loading to verify contents
and loading procedures. These examples demonstrate the important role of high-level
government-to-government support, at the initial stages, in successfully implementing
the proposed concept.
- Siting and Development. Deployment of the regional storage
facility may require infrastructure development within the host state, which will
vary in degree depending on the particulars of the state’s current situation.
Geographic location is also a factor: if transporting used nuclear fuel to the facility
requires traversing neighboring states, those states may need to be involved early
in the planning phase. Ideally, this regional facility would have access to a port
to prevent such scenarios. However, it is not necessary to locate the storage facility
near a coast; in fact, it may be better to locate it well inland to avoid the risk
With regard to siting, the primary concern is the availability of a suitable facility
site. The land-use requirements of a concrete pad to store 10,000 MT of used fuel
are relatively small—only a few acres; and the engineering requirements for
the concrete pad are similar to those of an airstrip. Operating procedures for this
type of storage facility are well developed and have been demonstrated at many facilities
around the world; no new or novel technology developments are required. Therefore,
the proposed facility can be staffed by technical personnel from the regional facility
owner-operator. In training staff, the development and maintenance of a strong safety
culture within the facility should be paramount. The majority of operations can
be performed during an initial transition/training period by experienced personnel.
We believe that training of facility personnel can lead to self-sufficiency in most,
if not all, areas of operation—including the transfer of canisters into concrete
storage overpacks, which can, in turn, be fabricated on-site as needed.
Long-term Storage. Little empirical evidence exists to model behavior of used
fuel and dry cask storage systems for extended time periods (such as the proposed
one hundred years). As extended dry cask storage will likely become the global industry
standard, the concerns associated with this fact are ubiquitous; therefore, collaborative
global R&D efforts, such as the ones proposed in this paper, are warranted to
ensure continued safety and security for the stored used fuel. The U.S. Nuclear
Waste Technical Review Board issued a report identifying several R&D areas,
mostly associated with the ability to accurately understand and model long-term behavior
of the various components of the dry cask system.31 Implementation
of the proposed regional storage facility and other extended-storage options should
consider these areas and work with technical experts to identify and implement methods
to monitor performance efficiently over the storage duration.
The business case for the proposed regional storage facility must consider several
areas in order to offer a convincing argument for success, and all stakeholders
must understand and be comfortable with its terms. There are four general categories
of stakeholders: the existing nuclear fuel cycle entities, the entities within the
host state(s), the customer community, and the international community.
Similar to the NTI’s support of the nuclear fuel bank, start-up or seed money
provided by a philanthropist or foundation might be needed to facilitate establishing
a business of this nature. The business would return the seed money
upon reaching an early milestone, such as receipt of fees associated with the first
500 tons of used fuel. Further study is needed to determine the specifics, but the
underlying point is that there is no need for the U.S. government to provide financial
An estimate of the costs and potential revenue of the regional storage facility
suggests that, to service both existing and emerging nuclear power plants, capacity
could be divided into 75 percent legacy material and 25 percent capacity for emerging
markets.32 Legacy material would be charged a onetime fee
based, in this estimate, on the burn-up of the fuel. New markets could make recurring
payments while the fuel remained in the reactor to cover the future cost of storage.
This legacy material would provide supporting revenue and incentive to build the
regional storage facility while the emerging states are utilizing, and subsequently
cooling, their first fuel load.
Table 1 provides four cash-flow scenarios for four waste acceptance fee assumptions.
The estimate is not intended to be a rigorous economic assessment of the regional
storage facility; it is instead a high-level evaluation to encourage informed discussions
and determine whether a more detailed future analysis is warranted. A variety of
experts from across the nuclear fuel storage and transportation industry provided
the cost estimates that we utilized for the scenarios.
The facility is projected to begin accepting used fuel in 2023. At that point, no
emergent nuclear operators will have fuel ready for dry cask storage; therefore,
revenue for the first several years will be provided by legacy material. A used
fuel acceptance fee of 0.45 mill/kWe-hr is assumed for the reference case; the demand
component is assumed to be forty canisters per year of 40 GWday/MTHM burn-up fuel.
An annual fuel storage fee of $25,000 per canister is assumed, which provides for
ongoing security forces and payment of fees to the host state after the facility
has reached capacity.33
Capital investments are included as expenditures prior to the first year of operation.
These include the design of the facility; construction of administrative, maintenance,
and concrete fabrication buildings; installation of the container transfer system
and the equipment necessary for moving the containers; and fabrication and maintenance
of the storage casks. Construction of the first portion of the concrete pad is included
in these estimates.
The storage-related infrastructure can be built as needed and is included in the
operations and maintenance cost. It includes the fabrication of storage overpacks,
the concrete pad, and security infrastructure for the casks: fencing
and motion and infrared detectors, for example. We assume that a medium-sized used
fuel transport vessel with a capacity of forty canisters will be hired for ocean-going
As indicated in Table 1, positive net cash flow could be obtained by year five in
the facility’s operation for the low and reference cases.35 Our initial analysis takes a conservative approach: payments by the customers
would precede service by only one to two years. Positive cash flow could be achieved
earlier if one-time fees were received at the time of commitment to this project.
Depending on industry manufacturing capabilities, the transportation overpacks,
which have the highest capital expense and longest lead time, may need to be ordered
several years prior to the facility opening. These expenses could be offset by early
payment of the fuel acceptance fee by legacy used fuel customers. If the regional
facility can be demonstrated to have a sufficient level of assurance that operations
will commence on schedule, the fuel acceptance fee, in whole or part, would likely
be paid by both nuclear aspirants and legacy holders prior to transportation to
this regional facility. Indeed, it is likely that both nuclear aspirants and legacy
holders could begin paying their acceptance fees significantly earlier than when
transport begins—as early as when the regional facility needs to begin procuring
the initial container shipments for the customers. Such an arrangement would reduce
the amount of money the facility would need to borrow initially, thereby reducing
the overall cost of storage and potentially benefiting the customer and/or host
The proposal of a commercially owned and operated regional storage facility allows
for flexible execution and provides numerous benefits to the parties involved
that may be difficult to achieve in a government-run operation. The facility would
not only allow existing international fuel cycle markets to continue operation unimpeded,
but it would also provide a potential economic opportunity for those markets to
expand their services to include cradle-to-grave services. Based on our preliminary
analysis, the cash flows are sufficient over the proposed time period to generate
profits for the regional facility owner as well as revenue and job creation for
the host state. The final negotiated pricing and payment terms will be a cost that
the customers electing to avail themselves of the facilities should find attractive.
EXPERT COMMENTARY TO DATE
We received commentary from four technical experts in the South and East Asia regions:
- Japan—Dr. Akira Omoto, Commissioner, Japan Atomic Energy Commission
- Republic of Korea—Dr. Joo Sang Lee, DirectorGeneral, Korea Hydro and Nuclear
- Malaysia—Dr. Noramly bin Muslim, former IAEA Deputy Director
General and Chairman, Malaysian Atomic Energy Commission
T. S. “Gopi” Rethinaraj, Assistant Professor, Lee Yuan School of Public
Policy, National University of Singapore
All four experts believed that the biggest challenge for emerging nuclear power
in Asia is developing human capacity to address the likely growth of nuclear energy
in the region. Except for China, India, and the Republic of Korea, deployment decisions
regarding the nuclear fuel cycle for countries in this region are viewed as further
downstream and not as immediate a concern as capacity-building. The pace of nuclear
power growth for all countries, including China, India, and the Republic of Korea,
will be influential in formulating policies on the nuclear fuel cycle. All
the experts reinforced several of the positions articulated in our paper, namely:
- All countries in good standing with the IAEA should be able to consider all fuel
cycle options and not arbitrarily foreclose choices related to the back-end. Energy
security concerns trump all other considerations; the used nuclear fuel could, in
the near term (in the case of Korea and Japan) and in the long term (in the case
of Malaysia and Singapore, if either or both countries deploy nuclear energy), be
an asset and not a liability. Inherently, any chemical partitioning concept, including
conventional reprocessing, and recycling of the uranium and plutonium cannot simply
be “taken off the table.” In the case of Japan, Dr. Omoto has stated:
“Reprocessing of used fuel is basically to be conducted within the country
in view of securing the autonomy of the nuclear fuel cycle.”36
- One of the key provisions of our innovative storage concept—linking legacy
with newly generated used fuel—is attractive, particularly in view of the
difficulties all experts identified in using multiple sites for long-term on-site
storage of used fuel. Onsite storage is a significant issue now in the case of Japan
and the Republic of Korea37 and will be equally significant
in the case of Malaysia and Singapore. Taipower in Taiwan is facing similar concerns.38 Our proposal could possibly address the storage challenges for some
of the reactors in Taiwan and the Republic of Korea.
- Another key provision of
our storage concept, technology deferral,39 is also attractive
to the experts we consulted, particularly in view of the need to reduce the future
nuclear waste burden. Deploying reactor systems at-scale—in particular, ones
that are designed to consume actinides—will require a large investment in
transformational science and technology; institutions and states that participate
in back-end services would benefit from these investments.
- In a state that hosts
a regional storage facility, a semi-scale storage facility colocated with an R&D
facility for used fuel is more likely to be publicly acceptable than a full-scale
commercial facility. Therefore, the initial storage capacity of the facility should
be capped at 10,000 MT.
- The prospect of cooperation in South and East Asia on a regional repository was
best characterized by Dr. Lee: “There seems to be no strong glue for all countries
in the region to collaborate and to plan for a regional back-end facility.”
Therefore, it was suggested that a regional forum be held, possibly under the auspices
of ASEAN and including policymakers and thought leaders from Russia, China, and
- Dr. Rethinaraj pointed out that India is
particularly interested in becoming selfsustaining with regard to nuclear energy.
As part of its effort to diversify its economy away from fossil fuels and insecure
sources of imported energy, India is pursuing advanced nuclear energy technologies.
India is a strong proponent of recycling.41 India needs to
play a very active role in any innovative concept; broadening the R&D activities
at the regional fuel storage complex, to encompass concepts that Indian scientists
and engineers are considering, may encourage India to participate in such a project.
Our focus in this paper has been on fashioning not only a feasible scheme for a
sustainable multinational fuel cycle, but also a feasible scheme for transforming
the existing international nuclear fuel cycle market into our target sustainable
international fuel cycle, which would integrate the back-end of the fuel cycle into
the international market. That is, we believe that the structure of proposed fuel
cycles (for example, the “asymptotic” fuel cycle state: that is, the
vision described by ElBaradei) cannot be independent of the processes and procedures
that enable the transition from the current state to this asymptotic state; in the
absence of an arguably feasible transformation process, no internationalized fuel
cycle proposal—no matter how attractive from the safety, security, and nonproliferation
perspectives—should be entertained with any seriousness. One must always be
able to answer the question, how do we get there?42
We believe that our proposed initial concepts for multinational arrangements will
benefit from input by decision-makers and stakeholders in nuclear consumer states.
Listening to their goals and objectives, as well as what they see as the constraints,
will inform discussions and the attendant R&D that could produce a true “game
changer.”43 Up to now, leaders from the public and private
sectors in nuclear supplier states have dominated the discussions. We expect to
begin more inclusive conversations on these concepts in the Middle East (in the
United Arab Emirates, in particular, and via the Arab League) and in the Asia region.
We believe that we have considered this complex question using the best principles
of a Rogerian approach; that is, we have addressed a divisive
and controversial issue through dialogue that is nonconfrontational and aims for
consensusbuilding. Traditional argument structure begins with an assertive stance
and frequently incites resistance on the part of one’s “target”
audience. To soften this resistance and, concurrently, to find common ground with
our audience, we have attempted to remain neutral toward the back-end issue. In place
of the traditional argument structure—claim, support, counterargument, and
conclusion—we have wrestled with the nonproliferation, safety, and security
questions surrounding the back-end issue; we have considered and proposed alternatives; and we have posited a conclusion/compromise position. After all, the
goal of Rogerian argument is to “win” by building bridges between opposing
The time has come to discuss tangible as well as intangible incentives to support
a proliferation-resistant fuel assurance regime. Commercial, nonproliferation, and
sovereign interests all have to be a part of the conversation. This paper has attempted
to elucidate the conditions for discussion and has presented an initial proposal
that requires refinement, but that can begin the conversation nevertheless.
http://www.brc.gov/index.php?q=announcement/brc-releases-their-final-report; hereafter cited as Report of the Blue Ribbon Commission. This point is accentuated
by recent remarks from Exelon CEO John Rowe: “The Blue Ribbon Commission has
offered a road map. But it will take the federal government and national political
will to make it a reality. Unfortunately the federal government is further away
from keeping its promise on waste disposal than ever and this condition cannot be
met”; John Rowe, “My Last Nuclear Speech,” American Nuclear Society
Utility Working Conference, Hollywood, Florida, August 15, 2011.
first interim dry storage facility for spent fuel rods is scheduled to be completed
in the later part of next year and become operational in 2013, Atomic Energy Council
officials said Sunday. Shao Yao-tsu, deputy director of the council’s Fuel
Cycle and Materials Administration, told Kyodo News that state-run Taiwan Power Co.
will apply for permission to run the facility on a trial basis next month. Taiwan
has three operational nuclear power plants and six reactors, while a fourth one
is still under construction. Reactor fuel rods need to be replaced with fresh ones
every 18 months. Discharged fuel assemblies must be continually cooled in water
pools for many years after they are no longer useful for generating electricity.
The water pools at the First Nuclear Power Plant in Chinshan, 41 kilometers away
from the capital city of Taipei, are nearing capacity.
See “Taiwan’s Dry Storage Facility for Spent Nuclear Fuel to be Completed,”
The Mainichi Daily News, October
Integrated Plants for reprocessing of spent fuel from both thermal and fast reactors
are being designed in India for the first time. . . . India also commenced engineering
activities for setting up of an Integrated Nuclear Recycle Plant (INRP) with facilities
for both reprocessing of spent fuel and waste management, as setting up adequate
reprocessing capability has been an important element of the country’s closed
fuel cyclebased programme.
Quoted in “India Designs Integrated Plants for Spent Fuel Reprocessing,”
Deccon Herald, November 2, 2011. The article continues:
“The Fast Reactor-based spent fuel recycling plants will be located at Kalpakkam
(Fast Reactor Fuel Cycle Facility—FRFCF) while thermal reactor-based spent
fuel recycle plants will be located at Tarapur.”