Nuclear Fuel Cycle Economics and Tax Impacts in Spain

by Cameron Bernhardt

The long-term treatment of nuclear waste is often considered one of the most significant issues to address when developing nuclear energy generation. There are currently two fuel cycles and respective waste disposal options available to industrial scale nuclear generation: open cycle and closed cycle. The open cycle strategy functions as a “one time use” cycle where nuclear fuel elements are considered as high level waste and ought to be disposed of in a deep geological repository. The closed cycle strategy recycles uranium oxide elements for additional use, but the final waste products are still comparable to open cycle processes in the long term. Soria et al. (2015) used a comparative trend analysis model to quantify the costs of two taxes on used nuclear fuel in Spain for each waste disposal strategy. One tax applied to the production of used fuel when it was extracted from the reactor while the other applied to fuel after storage. While it was clear that these taxes would have significant impacts on the costs of back-end nuclear fuel management, Soria et al. sought to analyze the difference in management costs between open cycle and closed cycle disposal processes.

Their results indicated that, under a scenario in which no credit was earned for reprocessing materials in the closed cycle, the closed cycle was 12 percent more expensive than the open cycle. While management costs for the closed cycle process were demonstrated to be higher, the cost of the taxes on the closed cycle was found to be 2.6 percent higher, thus reducing the difference in total costs between technologies. The tax burden, however, was found to be greater than the management cost burden, reducing the difference in total costs to just 6.6 percent, with lower costs for the open cycle process. Results from the study conclusively demonstrated that the open cycle disposal process was cheaper in terms of management costs and tax compliance, but it is important to recognize that these costs were estimated under a model that assumed a “worst-case scenario” for the closed cycle process, “where Spain does not receive any credits for the reprocessed material.” Furthermore, the authors suggest that such a small estimation in cost differences may not be relevant due to variability in their model. They also highlight advantages between the different disposal methods.

Soria, B., Ruiz-Sánchez, R., Estadieu, M., Belda-Sánchez, B., 2015. Impact of the Taxes on Used Nuclear Fuel on the Fuel Cycle Economics in Spain. Energies 8, 1426-1439

http://www.mdpi.com/1996-1073/8/2/1426/htm

 

 

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