Areva Secures $2 Billion Loan Guarantee from the DOE

Washington, DC – As part of a broad effort to expand the use of nuclear power in the United States and reduce carbon pollution, U.S. Secretary of Energy Steven Chu announced today the Department’s first conditional commitment for a front-end nuclear facility. The $2 billion loan guarantee will support AREVA’s Eagle Rock Enrichment Facility near Idaho Falls, Idaho, which will supply uranium enrichment services for the U.S. nuclear power industry.

“Increasing uranium enrichment in the United States is critical to the nation’s energy and national security,” said Secretary Chu. “Existing reactors will need additional sources of enriched uranium soon. New nuclear plants that could start to come on line as early as 2016 will also need a steady, reliable source of uranium enrichment services. AREVA’s project will help to meet that demand.”

The Idaho Falls facility will use advanced centrifuge technology instead of the more energy-intensive gaseous diffusion process. Although Eagle Rock will be only the second plant to use this technology in the US, it has been employed in Europe for about 30 years to enrich uranium for the commercial power market. The project’s technology uses 95 percent less electricity than the gaseous diffusion technology it replaces, reducing both energy use and environmental effects.

Areva estimates construction of the Eagle Rock facility will create 1,000 jobs. The total project is expected to cost approximately $3.3 billion.

The light-water reactors that comprise the US fleet are fueled by low-enriched uranium, in which the concentration of the easily-split U-235 isotope is raised from less than one percent found in natural uranium to between three and five percent by weight. (Natural uranium is largely comprised of the U-238 isotope.)

Currently, the United States obtains half of its enriched uranium from Russia under the Megatons-to-Megawatts program, in which nuclear materials that were once pointed at the United States are converted to civilian nuclear fuel to power America’s economy. The program expires in 2013, after which alternate sources of enrichment services will be required to support the continued and expanded use of nuclear power in the United States

The project must obtain a Combined Construction and Operating License (COL) from the Nuclear Regulatory Commission before the loan guarantee can be finalized. In addition to the $2 billion in loan guarantee authority under the 2009 Omnibus Bill, the Department has made available an additional $2 billion to support uranium enrichment technology from loan authority provided in 2007.

This is the ninth project to be offered a conditional commitment by the Department of Energy since March, 2009. For more information on the loan guarantee program, please visit http://www.lgprogram.energy.gov/