USEC and DOE sign $350M cooperative agreement for American Centrifuge research, development and demonstration program; next-gen uranium enrichment
USEC Inc., a leading supplier of enriched uranium fuel and nuclear industry related services for commercial nuclear power plants, and the US Department of Energy (DOE) have signed agreements to move forward with a $350-million cooperative research, development and demonstration (RD&D) program to confirm the technical readiness of the American Centrifuge, the next-generation US uranium enrichment technology.
The cooperative agreement between USEC and DOE defines the scope, funding and technical goals for the program. The total investment in the program will be up to $350 million, with DOE providing 80%, or $280 million, and USEC providing 20%, or $70 million, of the total.
The RD&D program will support building, installing, operating, and testing commercial plant support systems and a 120-machine cascade that would be incorporated in the full commercial plant in Piketon, Ohio, which is planned to operate 96 identical cascades. The program will enhance the technical and financial readiness of the centrifuge technology for commercialization.
The RD&D at ACP will be managed under a new enhanced governance structure that strengthens the roles of other project partners such as Babcock and Wilcox (B&W) and Toshiba Corporation, which will provide additional project management support and personnel for the program.
USEC and DOE will initially provide $110 million in cost-shared funding for the program. This is intended to last through the end of November. DOE’s portion of the funding will come from taking the disposal obligation for a quantity of depleted uranium tails from USEC, releasing $87.7 million in cash for use in the RD&D program that USEC had previously committed as security for future tails disposition obligations. USEC will continue to work with Congress and DOE to pursue opportunities for funding the balance of the RD&D program. Appropriations bills providing FY 2013 funding have been approved by the House of Representatives and the Senate Appropriations Committee but have not yet been finalized.
USEC recently formed American Centrifuge Demonstration, LLC (ACD) to carry out the program and has agreed to put in place a governance structure for ACD to provide enhanced program management and execution for the performance of the RD&D program, subject to USEC’s requirements under its license from the Nuclear Regulatory Commission. This structure is anticipated to include a board of managers of ACD that will not be controlled by USEC.
USEC has granted DOE an irrevocable, non-exclusive royalty-free license in centrifuge intellectual property for government purposes. USEC and DOE also signed an agreement that grants DOE title to certain existing equipment used in the RD&D program as well as all equipment, such as centrifuge machines, produced or acquired as part of the RD&D program. USEC will lease the equipment from DOE, and DOE will transfer title of the equipment back to USEC if USEC proceeds with the deployment of the commercial plant. Finally, DOE and USEC have signed an amendment to the 2002 agreement to add milestones related to the successful completion of the RD&D program and to extend the existing milestones under the 2002 agreement related to the financing and construction of the American Centrifuge Plant.