The Nuclear Energy Alliance outlines their vision for the EU’s energy transition path forward

Jael Gless

The “Nuclear Energy Alliance” was initiated earlier this year by France, with the mission to bring together the European countries who see nuclear energy as an important part of managing their energy transition. On the 16th of May, during the third meeting of the fourteen member states, which the UK joined as an observer and the European Commissioner for Energy, Kadri Simson, took part, discussed strategies on building an independent European nuclear supply chain, as well as the needs implied by the revival of the European nuclear industry. At the end of the meeting the Members signed a joint statement, which included the assertion that “Nuclear power may provide up to 150 GW of electricity capacity by 2050 to the European Union (vs roughly 100 GW today)” and called for a European action plan around nuclear power. To reach this set goal, up to “30 to 45 new-build large reactors and small modular reactors” would need to be built, which the Members stress would also “ensure that the current share of 25% electricity production be maintained in the EU for nuclear energy." Currently, nuclear energy generates electricity in fourteen European Union (EU) Member States, and provides 50% of the EU’s low carbon electricity.

France

The meeting was organised on the same day as the French National Assembly’s vote on the country’s nuclear energy acceleration bill, which passed – giving the green light for preparatory work to begin at a power plant site in northern France. This development is part of a bigger movement taking place in France, where nuclear energy is seen as crucial in the energy transition, and thus as worthy of investment. France’s takeover of EDF, which is to be finalised later this month, had been struggling with debt and conflicting shareholder demands, in light of their construction of new reactors, is aligned with that same strategy. 

It remains to be seen if France and the Nuclear Energy Alliance as a whole can push their interests through the considerable block of EU countries that are against including nuclear energy in the EU's green energy transition strategy. If, however, the ambitions of the Nuclear Energy Alliance is adopted by the EU as policy, the difficult task of building robust supply chains to gain the necessary mineral fuels, whilst navigating difficult geopolitical tensions, will remain. 

Supply Chain Risks

Nuclear reactors use uranium for nuclear fuel. The biggest providers of raw uranium are Kazahkstan, Australia and Canada, whilst Russia owns some 40% of total uranium conversion infrastructure in the world, and 46% of the total uranium enrichment capacity. The EU, as of 2021, sources almost 70% of the Uranium needed for their nuclear power plants from Niger, Kazakhstan and Russia, all countries with significant geopolitical risks. 

Origins of uranium delivered to EU utilities in 2021 (tU). Source: Euroatom.

As noted in the Nuclear Energy Alliance’s statement, Europe is aiming to continue reducing its dependency on Russian suppliers whilst trying to strengthen cooperation with like minded international partners. As the chart above shows, in terms of sourcing fuel from international partners, currently only Canada and Australia can be described as like minded partners. Therefore, Europe will likely try to increase the share of uranium imported from those two countries, whilst also finding new partners, like the US. The US is an especially attractive supplier for EU countries, due to its similar stance on current geopolitical issues (Russia, China) as well as being the leading supplier for small modular reactors, in which the Nuclear Energy Alliance wants to invest. Increasing uranium supply from these countries does not necessarily mean completely cutting out Russia, as many utility companies purchase enriched uranium from Russian companies. The disentanglement of Russia from the nuclear fuel sector will be an onerous process for the EU. As a recent London Politica report highlights, many European countries have a long history of dependence on the state-owned enterprise Rosatom. France’s EDF, for example, maintains its very close ties with Rosatom, which includes collaboration at “all levels from the production chain, to the exploitation of uranium and treatment of waste, to the construction of power plants and their operation”. Avoiding dependency on Russian supplies also proves difficult for eastern European countries, considering Russia’s state nuclear company being the only supplier option for soviet-designed nuclear plants.

Niger, the EU’s main source-country for uranium, is contending with its own share of political risks. The exploitation of the country's natural resources has led to local protests and pollution. It is also to be seen if Niger is willing to supply the necessary amount of fuel for France's national ambitions. Historically, Niger has been the main country from which France sourced their fuel, but tensions between the two states have been building. The French nuclear energy company Areva, who’s subsidiary Orano owns the operating licence for the large Imouraren mine, negotiated a deal in 2014 that would improve conditions for Niger through operations at the mine. However, with Imouraren being closed since 2014 and Orano not looking to begin operations until 2024, the benefits negotiated for Niger have not yet and will not be felt soon. One French expert speaking to AFP concluded, “there is a future for Uranium in Niger, but not necessarily with France”.

Kazakhstan, another main source-country for the EU, as well as the main provider of Uranium worldwide, is also in a difficult geo-political situation due to its close ties with the EU, Russia and China as well as internal tensions. Moreover, the country is dealing with falling production levels due to “wellfield development, procurement and supply chain issues” caused by the pandemic as well as the war in Ukraine. Nonetheless, the state-owned Kazatomprom took mitigating measures, which indicated a willingness and dedication to serve its western customers, by transporting the goods through the Caspian Sea.

State of supply: uranium in Europe

Despite being a strategic commodity, uranium has maintained a relatively low profile in the news even as the war in Ukraine continues and Europe’s energy crisis unfolds. This is surprising considering nuclear power, which depends on uranium, contributes roughly 25% of the EU’s total electricity generation. Russia itself has long been a key supplier of uranium and nuclear fuel to the EU, but the future of this relationship is now far from certain. For the moment, Rosatom, Russia’s state-owned and primary vendor of nuclear products, has managed to skirt EU sanctions and continue operating, but how long can this last and what does it mean for nuclear energy in Europe?

In terms of unenriched Uranium ore, Russia is the third largest supplier to the EU. In 2021 it accounted for 19.69% of supply, just behind Kazakhstan at 22.99% and Nigeria at 24.26%. This equates to 2,358 tU (tons of raw Uranium) and roughly €210 million paid to Russian vendors in 2021. However, Russia’s position in third place can be somewhat misleading, according to the World Nuclear Association and other sources, Rosatom owns significant stakes in uranium mining and processing in Kazakhstan. Nigeria has been ramping up its supply of uranium ore in recent years with an increase of 13.7% between 2020 and 2021. Considering the ongoing expansion of mining operations in the country, Nigeria may emerge as a leading supplier for Europe, if output can be maintained. 

Unenriched uranium ore is only half of the equation when it comes to generating nuclear energy. The other key ingredient is refined or enriched uranium, suitable for nuclear fuel production. Europe is dependent on foreign enrichment services. While Europe itself manages some 62% of its enrichment needs, as of 2021, 31% is still sourced from Russian providers. The two primary Russian providers, according to Euratom, are Tenex and TVEL, which are both subsidiaries of Rosatom. Over the past few years, EU domestic enrichment rates have decreased, between 2019 and 2020 alone Euratom marked a 9% decrease in its share. In order to ensure security of supply in this sector, Europe must reverse this trend and look for third country partners. The current non-Russian and non-EU supply of enrichment services amounts to an astonishingly low 7%, a critical failure in market diversification.

The other side to the issue with enriched Uranium supply is the specific fuel configuration for reactors. Of the 103 active nuclear reactors in the EU, 18 are of the Russian designed VVER-440 or VVER-1000 models and depend greatly on fuel supply from TVEL. While many of these reactors are holdovers from original Soviet construction and are set to be phased out in the long term, they still represent an imminent threat. Mitigating this however, the US’s Westinghouse, a leading provider of nuclear infrastructure, is currently expanding its capacity to produce fuel at least for the VVER-1000 models; this has already been successful in Ukraine. 

The situation for Europe’s uranium supply is precarious and the fact Russia’s supply has not yet collapsed, is of little consolation. Nonetheless, there are options on the table and unlike other commodities, uranium has the potential for a diverse supply chain with multiple partners. Two key questions are how long will it take to reorganise these highly complex, infrastructure heavy supply chains and how long will the EU continue its economic relationship with Russia?