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The options for a Ugandan Nuclear Energy Programme

According to the National Development Plan 2010-2015 and Vision 2040, Uganda intends to use its uranium reserves to generate electricity using nuclear power stations. With this goal in mind there are a number of options available to Uganda that we discuss in this third part of our nuclear industry series.  

Export only (Note – according to current plans the government will not be pursuing this option)

Like the oil and gas sector, uranium is subject to large fluctuations in price. As you can see the price has fallen significantly over the last 7 or 8 years.

Like the oil and gas sector, uranium is subject to large fluctuations in price. As you can see the price has fallen significantly over the last 7 or 8 years.

Like in the case of Namibia the Government of Uganda ‘could’ decide to mine, mill and export uranium concentrate (or yellowcake) that would ultimately be processed and used for power generation in other countries. This option would generate significant revenues for the country (dependent on varying international uranium prices) and would create a large number of mining, milling and associated jobs. However, it would not support electrification of the country and would be contrary to President Museveni’s thinking around value addition in the mining sector.

Process overseas  

Once the uranium ore is mined and milled, the government could decide to send it overseas for processing into finished fuel and then bring it back for power generation in Uganda. Although this would mean Uganda losing out on some of the value addition it would avoid the need for financing significant upfront investment in expensive and highly technical processing facilities and skills development while allowing the government to focus on mining/milling and power generation only. A key component of this option would be the need for complex, long-term commercial contracts with established foreign uranium processing companies. Furthermore, it would require transportation of large amounts of uranium in and out of the country on a regular basis creating a number of health, safety and environment, but perhaps more importantly, security risks.

Process in Uganda

In line with the push for value addition in the mining sector the government may even decide to invest in the construction of one or more, and perhaps even all, of the required processing facilities, creating further jobs and bringing money into the economy. However, this would require huge amounts of investment and would inevitably push the government further into debt. Also, it would take many years of planning and preparation before the first electricity is produced and would mean the government taking on all the risk.

Furthermore, assuming that foreign companies are contracted to build and operate these facilities, there will be the same issues of local content and skills development that we have seen in the oil sector. Even if the government invested heavily in the development of nuclear-related skills and institutions, it is difficult to see foreign companies utilising large numbers of newly trained Ugandans who will be in competition with experienced operators with years of industry experience in other countries. To add to this problem, Ugandans trained in nuclear related courses will be competitive in the global market and may decide to seek better paid jobs overseas.

Briefly, here are the different stages of uranium processing that the government could decide to invest in (see ‘The Nuclear Industry Explained’ for more detail):

  • Conversion – a relatively simple process that converts uranium oxide (yellowcake) into uranium dioxide. This can then be converted into fuel rods for use in some ‘heavy water’ type reactors. However, the vast majority of reactors in the world use enriched uranium, a much more likely choice for Uganda.
  • Enrichment – both the most profitable/expensive and controversial stage of the whole nuclear fuel cycle. This would require a massive amount of investment in infrastructure and skills. It would also significantly increase the required level of environment, health, safety and security regulation as enriched uranium is very dangerous if not managed correctly. Enrichment is also the process by which weapons grade uranium can be produced and would therefore open Uganda up to intense international scrutiny.
  • Fuel fabrication – converting the now enriched uranium into pellets, fuel rods and fuel assemblies ready for a reactor is a highly technical process subject to advanced methods of process/quality control and a high degree of management and regulation.

Power generation

As power generation looks to be an inevitability in Uganda,perhaps the most important decision will be choosing the type of reactor that is most appropriate for the country. As you can see from the table below, most reactors required enriched uranium fuel and over half (277 out of 438 in the world) are of the Pressurised Water Reactor (PWR) design.

Table: Nuclear power plants in commercial operation, IAEA data, end of 2014

Reactor type Main Countries Number GWe Fuel

Pressurised Water Reactor (PWR)

US, France, Japan, Russia, China

277

257

enriched UO2

Boiling Water Reactor (BWR)

US, Japan, Sweden

80

75

enriched UO2

Pressurised Heavy Water Reactor ‘CANDU’ (PHWR)

Canada

49

25

natural UO2

Gas-cooled Reactor (AGR & Magnox)

UK

15

8

natural U (metal),
enriched UO2

Light Water Graphite Reactor (RBMK & EGP)

Russia

11 + 4

10.2

enriched UO2

Fast Neutron Reactor (FBR)

Russia

2

0.6

PuO2 and UO2

TOTAL 438 376

 

A typical Pressurised Water Reactor (PWR)

A typical Pressurised Water Reactor (PWR)

The process of assessing designs for nuclear power stations is complex. This decision is made by the regulators of the nuclear industry in a country (in Uganda’s case the Atomic Energy Authority) together with other key stakeholders for example, NEMA. This ensures that any nuclear power station built meets the high standards of safety, security, environmental protection and waste management that are required. Clearly this process must be balanced with other considerations, not least of which is the cost. Power station designs must be scrutinised before they are built so that any potential design or technical issues can be identified early and the reactor designer can address them.

 Potential companies that Uganda could partner with

Whatever Uganda decides to do in terms of securing a regular supply of nuclear fuel and generating electricity from nuclear power, they will need to work with experienced (foreign) nuclear companies. There are numerous companies across the globe active along the nuclear chain, from uranium mining, processing and enrichment, to the operation of nuclear power plants and waste processing.

Perhaps the most aggressive in terms of their efforts to penetrate the African market to date is the French multinational Areva. They are the world’s largest nuclear company, active in 43 countries including Niger, Namibia, Gabon and Libya. It is very likely that Areva will be looking to expand their business into Uganda (and East Africa). However, there will no doubt be competition from emerging economies with nuclear capability such as China and India.

To give an example of the types of reactor currently on the market and the companies/countries involved we can look at the UK who is currently going through a process of selecting what technology to use for their new generation of nuclear power stations. The UK government has implemented a very thorough assessment process for new reactor designs and their siting as they plan to build 16 GWe of new nuclear capacity by 2030, requiring a total investment of at least £60 billion!

The three designs under consideration are:

  • Westinghouse’s AP1000 Reactor
  • Hitachi-GE’s ABWR (Advanced Boiling Water Reactor)
  • Areva’s EPR (originally European Pressurised Reactor)

Interestingly China’s State Nuclear Power Technology Corp. (general contractor of the first four AP1000 units being built in China) and China Power Investment Corp. recently announced a merger in a move to reinforce the country’s plans to eventually export their new flagship reactor, the CAP1400, based on AP1000 technology. This is something the Ugandan government could be interested in, particularly if cheaper than US or European equivalents.

The economics of nuclear power

Health, safety, environment and security aside, perhaps the most important factor for Uganda to consider is the cost. Nuclear power is generally considered cost competitive with other forms of electricity generation, except where there is direct access to low-cost fossil fuels. Having said this, International Energy Agency studies have shown that in terms of economic competitiveness, no single power generation technology has a clear overall advantage and it depends on national or even regional circumstances.

The undeniably high cost of nuclear power plants mean that its overall economics depend greatly on the cost of capital or financing cost (i.e. interest rates). Potential investors are particularly aware of these high capital costs and the technical complexity of nuclear power, which present risk during construction and operation. Nuclear power plant construction is typical of any large infrastructure project around the world, whose costs and delivery challenges tend to be under-estimated.

Nuclear fuel costs are only a minor proportion of the total generating costs for nuclear power. However, decommissioning and waste disposal must also be fully taken into account. For Uganda the most important thing will be whether nuclear can be cost competitive with other available energy options while balancing the health, safety, environment and security considerations. Government must make the decision-making process, especially contract negotiations, open and transparent to ensure accountability and value for money.

In the fourth and last part of this series, Luke Williams will analyse the potential risks and benefits of Uganda pursuing a nuclear power programme, including implications for the economy and development. He will talk about improved energy access, benefits of a reliable energy base load, energy security, the potential for job and wealth creation, and health, safety and environment.

Luke Williams is an Environment, Health and Safety professional with five years experience in the UK civil nuclear industry, working for Westinghouse Electric UK.

editor@oilinuganda.org