Without the Usec American Centrifuge plant, which is planned for Piketon, Ohio, "buyers will face increased risks of higher enrichment prices and less favourable enrichment contract terms," a new independent market analysis warns.

The study, conducted by NERA Economic Consulting on behalf of Usec, found that if ACP is not deployed "US utilities will be dependent on foreign-owned sources of enrichment, including a greater dependency on Russian enrichment."

In 2012, US nuclear plants spent around $2.3 billion on enrichment services, purchasing 16 million SWU at an average price of $141.36 per SWU, according to the US Energy Information Administration. Some 38% of enrichment services were of foreign origin.

The report also said that without the ACP "There will be a higher risk of coordination and anti-competitive behaviour amongst enrichment suppliers."

In 2012, 90% of world enrichment services came from just four suppliers – AREVA, Tenex, Urenco, and Usec. Due to the tight linkage of Urenco and AREVA by their ETC joint venture that manufactures centrifuges for both companies the two firms "might well be considered a single European enrichment supplier with a very large share of the world market, making the enrichment market even more concentrated," the report said.

In this context, NERA compared the loss of American Centrifuge Plant to a merger that would similarly reduce the number of competitors in a market. NERA found that the market concentration increase that would result from the loss of the ACP would be so high that world competition authorities would likely conclude that a merger causing the same change in concentration with no offsetting benefits would result in "significant harm" to competition and should not be approved.

"Without the American Centrifuge Plant, the enrichment market faces a similar and equally unacceptable situation," the report said.

Commenting on the study, Usec president and chief executive officer said:"NERA’s report makes it clear that the entire nuclear industry has a stake in the success of the American Centrifuge."

The full report can be found on: http://www.usec.com/nera


Photo: Demonstration cascade at the ACP (Source: USEC)