The Cost of Reprocessing in China

Authors: Matthew Bunn, Professor of Practice; Co-Principal Investigator, Project on Managing the Atom,Hui Zhang, Senior Research Associate, Project on Managing the Atom, Li Kang

January 2016

As it expands its fleet of nuclear power plants, China faces an important decision: whether to make large capital investments in facilities to reprocess spent nuclear fuel and recycle the resulting plutonium in fast-neutron reactors, or continue to store nuclear fuel, leaving for the future decisions on whether to reprocess the fuel or dispose of it as waste. This report summarizes estimates of the cost of current proposals for building and operating reprocessing plants and fast reactors in China.

China has been considering both a reprocessing plant designed to reprocess 200 metric tons of heavy metal in spent fuel each year (200 tHM/yr) and one designed to process 800 tHM/yr. Both indigenous Chinese technology and purchase of a large reprocessing plant from France are being considered. At the same time, China is considering construction of a demonstration fast reactor and a commercial fast reactor. There, too, both indigenous Chinese technology and a purchase from abroad (in this case from Russia) have been considered. The background of China’s program and the facilities being considered are described in Chapters 1 and 2.

Using engineering extrapolations from China’s existing 50 tHM/yr pilot plant, Chinese experts estimate that the cost of a 200 tHM/yr reprocessing plant using indigenous Chinese technology might be in the range of $3.2 billion (2014 $). By the same method, the cost of an 800 tHM/yr plant would be over $9 billion. These estimates are described in Chapter 3.

Because of the uncertainties of extrapolating from the pilot plant experience, it is worth examining international experience as well. The costs of the French and British reprocessing plants, built long ago, are comparable to the estimates based on extrapolating from the pilot plant. The more recent experiences with the Japanese reprocessing plant at Rokkasho (with a capital cost of over $20 billion, many times the original estimate) and the U.S. plutonium-uranium mixed oxide (MOX) fuel fabrication plant (with a capital cost of over $7 billion, again many times the original estimate) suggest much higher costs. The €20 billion price Areva has reportedly offered for the proposed 800 tHM/yr plant suggests that they believe costs for a Chinese plant will be closer to the Japanese experience than to the old French experience. These estimates are discussed in Chapter 4.

Based on these estimates and this international experience, Table ES.1 shows high and low estimates for the cost of building and operating a 200 tHM/yr reprocessing plant and an 800 tHM/yr reprocessing plant. Even the low estimates range from four to seven times the cost of storing the same fuel for 40 years, amounting to savings ranging from over $9 billion to over $70 billion. Hence, if China chooses not to invest in large reprocessing plants over the next several decades, it would have billions of dollars in unspent funds available that could be used to build more nuclear power plants to provide additional clean electricity for China’s economy.

Table ES.1: High and Low Estimates of Reprocessing Capital and Operating Costs

Plant 

Capital cost 

Operating cost 

40-year cost(no financing) 

40-year dry

storage cost 

200 tHM/yr, Low 

$3.20 B 

$0.19 B 

$10.80 B 

$1.60 B 

200 tHM/yr, High 

$5.70 B 

$0.34 B 

$19.30 B 

$1.60 B 

800 tHM/yr, Low 

$8.00 B 

$0.48 B 

$27.20 B 

$6.40 B 

800 tHM/yr High 

$20.00 B 

$1.50 B 

$80.00 B 

$6.40 B 

The costs in Table ES.1 do not include financing costs, which are a crucial part of the costs of reprocessing. Even if commercial reprocessing plants were partly government-financed, there would be borrowing costs, and the opportunity costs of not investing those funds elsewhere in the Chinese economy have to be considered. At a low, government-supported financing rate of 3 percent, with no taxes or insurance considered, the per-kilogram reprocessing cost for the low cost estimate for the 800 tHM/yr plant would be in the range of $1,400/kgHM, far higher than the costs of dry storage followed by direct disposal. For the high cost estimate for the 800 tHM/yr plant, with the same low 3 percent financing, the cost would be some $4,000/kgHM. For the smaller plant at 3 percent financing, costs would range from $2,300/kgHM for the low estimate up to some $4,000/kgHM for the high estimate. Costs for privately financed facilities would drive per-kilogram prices still higher. Per-kilogram costs of reprocessing are discussed in Chapter 5.

Even with assumptions on fuel cycle costs quite favorable to reprocessing, reprocessing at a $1400/kgHM cost and recycling the plutonium in existing LWRs would increase the cost of the nuclear fuel cycle by roughly two-thirds. The impact on the overall cost of nuclear energy would be more modest, however, as that cost is dominated by the capital cost of the reactors.

China does not plan to recycle plutonium in LWRs, however, but in fast-neutron reactors. Most analysts expect such reactors to have capital costs 20–50 percent higher than those of LWRs, along with higher fuel cycle and operations and maintenance costs. Overall, a shift to such reactors, with reprocessing, might increase the cost of nuclear energy by 20–50 percent. These estimates of full fuel cycle costs are discussed in Chapter 6.

The planned 200 tHM/yr reprocessing plant and the proposed 800 tHM/yr plant may not be the best facilities for supporting China’s near-term and long-term fuel cycle plans. Fast reactors could be started up with enriched uranium or with plutonium imported from other countries which have large excess stocks available, at far lower cost than building these proposed reprocessing plants. To demonstrate the potential of a closed fuel cycle, China would ultimately need reprocessing plants and plutonium fuel fabrication plants designed to handle fast reactor fuel, rather than LWR fuel. Over the longer term, establishing a leadership role for China in fuel processing technology might be better accomplished at lower cost by building a flexible R&D facility to explore a variety of new concepts than by investing in commercial-scale facilities based on decades-old technologies.

China should also consider the non-economic costs of near-term investment in reprocessing plants. Such facilities will focus the efforts of a substantial number of nuclear experts, for design, construction, operation, and regulation, at a time when providing qualified personnel for the rapid growth of nuclear energy in China is posing major challenges. Chinese nuclear regulatory agencies face particular challenges, and would have to acquire a wide range of expertise in areas quite different from those needed for nuclear reactor regulation to effectively regulate large reprocessing and plutonium fuel fabrication facilities. These issues are addressed in Chapter 7.

Fundamentally, we conclude that investing in large reprocessing facilities in the near term would be much more expensive for China than the alternatives. China has the luxury of time, as it has access to plenty of uranium to fuel its nuclear growth for decades to come, and dry casks can provide a safe, secure, and cost-effective way of managing spent fuel for many decades, leaving all options open for the future.

We recommend that China take the following steps:

Undertake a comprehensive review of the economic, safety, security, nonproliferation, and waste-management benefits and risks of near-term construction of reprocessing plants and breeder reactors versus those of continuing to store spent nuclear fuel for several decades. Ultimately, China should choose the option that brings the best balance of costs, risks, and benefits. 

Invest in both at-reactor and centralized dry cask storage facilities, which offer important flexibility for any fuel cycle option chosen. 

Set aside funds for spent fuel management in risk-free accounts, ensuring that funds will be available in the future to implement whatever spent fuel management approaches are ultimately chosen. 

Keep in mind, in making decisions, that early cost estimates are likely to grow, and approve major reprocessing and breeder reactor projects only if they would still be worthwhile if the cost were 2–3 times higher than the early estimates (and the schedules substantially longer). 

Avoid technological and institutional lock-in on one approach to the extent practicable, maintaining flexibility to adapt to future developments. 

Pursue R&D on fuel-cycle technologies, intended to put China in a leadership role in these technologies. 

Ensure that the potential nuclear proliferation impacts of China’s choices—and in particular how China’s choices may effect the spread of reprocessing technologies in non-nuclear-weapon states—are fully considered in choosing the best option for China. 

Ensure that the chosen approach is implemented in a way that meets the highest standards of safety, security, safeguards, and waste management (specifics of this and other recommendations are discussed in Chapter 8). 

China has the world’s largest nuclear construction program, and within a couple of decades, China is likely to have the largest number of nuclear power plants in the world. China is already becoming one of the world leaders in nuclear energy technology, and has every reason to seek to maintain and strengthen that leadership role. Pursuing the safest, most secure, and most cost-effective approaches available today—while pursuing a vigorous R&D program on new approaches for the future—is likely to be the best way to promote China’s nuclear energy leadership.

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