Positive trends continue for global nuclear fuel cycle

Geopolitical instability since the last edition of the report was published in 2021 - notably resulting from the Russia-Ukraine war - has led to increased interest in nuclear power for energy security and sovereignty, as well as having significant implications for the globalised market for nuclear fuel services.

Released at World Nuclear Symposium 2023 in London, The Nuclear Fuel Report: Global Scenarios for Demand and Supply Availability 2023-2040 sets out three scenarios for future nuclear generating capacity: the Reference Scenario, which is informed by government and utility targets and objectives; the Lower Scenario, which assumes delays to the implementation of these plans; and the Upper Scenario, which considers the potential developments if more favourable conditions are applied.

Launching the report, ConverDyn CEO Malcolm Critchley, a co-chair of the working group responsible for drafting the report, said the nuclear sector has "almost overnight" seen a complete revival. "There's a growing acceptance that nuclear power has got to be part of the solution for climate change," he said.

"The inventory overhang that was so damaging to the market for almost a decade has been largely consumed, and going forward, we're going to have an increasing reliance on primary supply."

Under the Reference Scenario, nuclear capacity is expected to grow from 391 GWe (from 437 units) at the end of June this year to 444 GWe by 2030 and 686 GWe by 2040. The Upper Scenario sees 490 GWe in 2030 and 931 GWe by 2040, while the Lower Scenario sees capacity increasing to 409 GWe by 2030 and 487 GWe by 2040.

All three scenarios envisage capacity from small modular reactors (SMRs) accounting for part of the 2040 nuclear generation, with 35 GWe of generic SMR capacity included in the 2040 Reference Scenario, 83 GWe in the Upper Scenario and 2 GWe in the Lower Scenario. The scale of SMR deployment will depend on the success of delivering first-of-a-kind construction, demonstrating cogeneration capabilities, and establishing an industrialised and modularised supply chain - but "hundreds of billions of dollars" of investment could be channelled into these technologies every year from the second half of the current decade.

Another positive change compared with previous editions of the report is the move towards extended operating lifetimes. Upwards of 140 reactors could be subject to extended operation in the period to 2040, driven by economics, emissions reduction targets, as well as security of supply, the report finds.

Fuelling growth

The increased interest in nuclear power means that overall projections for uranium reactor requirements are higher than the same scenarios in the 2021 edition of the report (although the Upper Scenario does see requirements fall slightly in the period to 2030 compared with the previous projections). Current world reactor requirements are estimated to be around 65,650 tU per year. This would increase to 83,840 tU by 2030 and almost 130,000 tU by 2040 under the Reference Scenario. However, primary uranium production has dropped considerably in recent years.

Production volumes for existing mines are projected to remain fairly stable until 2030 in all three scenarios, before decreasing still further over the decade to 2040. "To meet the Reference Scenario requirements from early in the next decade, in addition to restarted idled mines, mines under development, planned mines and prospective mines, other new projects will need to be brought into production. Considerable exploration, innovative techniques and timely investment will be required to turn these resources into refined uranium ready for nuclear fuel production within this timeframe," the report notes.

Future demand cannot be met from identified supply sources, and from the beginning of the next decade, planned mines and prospective mines - as well as increasing amounts of so-called unspecified supply - will need to come into production to meet requirements under the Reference Scenario. "It takes 8-15 years to reach production after first discovery of a resource, and intense development of new projects will be needed in the current decade to avoid potential future supply disruptions," the report says.

For the conversion sector, the situation has dramatically changed since the oversupply which characterised the market in the decade up to 2018. Pointing to the restart of production and ramp-up at two primary Western convertors - ConverDyn and Orano - the report says this deficit can be met in the near term, but in the medium term, convertors will need to operate at "near to maximum" levels. In the long term, new conversion capacity will be needed in both the Reference and Upper Scenarios.

The situation has also changed for enrichment, with primary Western enrichers expected to expand capacity. Fuel fabrication capacity, while sufficient to cover anticipated demand, could also experience bottlenecks.

Recovery

There is "no doubt" that sufficient uranium resources exist to meet future needs, but producers have been waiting for the market to rebalance before starting to invest in new capacity and bringing idled capacity back into operation. This is now happening, the report says.

"With changes to individual governmental policies on nuclear power for various reasons, the uranium market has begun to recover," it says. "Additional conversion and enrichment capacities are also likely to be needed".