The heart of any nuclear power plant is the reactor in which nuclear fission takes place. It is as a result of this reaction that a significant amount of energy is released, which is then, through a series of stages consisting in the conversion of the generated thermal energy, eventually converted into electricity that is evacuated to the grid. For this process to take place, it is necessary to deliver nuclear fuel to the power plant, which may entail a number of legal challenges – write Wojciech Wrochna and Bartosz Brzyski from Kochański & Partners.
What drives nuclear power plants?
In order for the reactor to work, it is necessary to ensure the supply of adequate nuclear fuel. This fuel must have the appropriate characteristics and properties to be able to support the fission reaction (and thus the production of energy). Nuclear fuel can vary in composition depending on the type of reactor, but it is essentially uranium fuel.
Uranium as a chemical element occurs in nature in the form of various isotopes – including uranium U-238, which accounts for most of the world’s uranium, and U-235, which accounts for less than 1 percent of the world’s uranium resources but is essential for fission reactions. In order to be able to generate energy in a nuclear power plant, it is usually necessary to carry out a process called uranium enrichment , which aims to increase the content of uranium U-235 in uranium fuel.
In the context of reactors, the construction of which is planned in Poland, i.e. mainly PWR type reactors (pressurized water reactor) the required enrichment of uranium in the fuel is from 0.7 to 3-5 percent of U-235. As an example, the AP1000 reactor from Westinghouse, which is to be part of the first Polish nuclear power plant in Choczewo, requires enrichment at a level of approx. 2.3−4.8 percent.
Where does uranium come from?
Uranium deposits are found in many places around the world including in Australia, Canada, Kazakhstan, Russia and some African countries. Poland also has uranium resources – they are located in several large areas, primarily in the Sudetenland, the Świętokrzyskie Mountains, Podlasie and Warmia.
Many countries in the world get uranium for their nuclear plants by importing it from abroad. In this regard, it is worth mentioning the recent media reports related to the military coup in Niger, which may jeopardize the supply of uranium for the European Union . This is particularly important also for Poland, which is obliged to comply with the principles of EU law in the context of nuclear fuel imports, although it does not actually have a nuclear power plant yet.
Specific supply contracts
The specifics of the supply of nuclear fuel is by its nature very different from the import of other energy resources. First, the ratio of energy contained in nuclear fuel to its volume and mass is incomparably more favorable than for other fuels.
The supply of nuclear fuel can be smaller, allowing much more energy to be generated. Secondly, since (as already mentioned) uranium resources are located in different parts of the world, simultaneous imports from several independent sources are possible. Third, the cost of energy production does not increase significantly due to fluctuations in the price of reactor fuel. An increase in the price of nuclear fuel by 50 percent increases the cost of producing energy in a nuclear power plant by approx. six percent. Fourthly, issues relating to the safety of the transport of radioactive materials require particular attention.
Consequently, the design of contracts for the long-term supply of nuclear materials requires contractors to understand all of the above in order to propose appropriate safeguards for potential risks.
Legal aspects of the purchase of nuclear fuel in the European Union
The issue of ensuring access to fissile material ores has historically been present in the context of European Union law since the very beginning of the creation of the European Communities. It is worth recalling that the communities originally consisted of the European Coal and Steel Community, the European Economic Community and the European Atomic Energy Community (EURATOM). The latter is the only one that has remained to this day under the same name.
The treaty establishing the European Atomic Energy Community, which binds all EU member states, explicitly states that the community’s tasks include, inter alia, guaranteeing regular and fair supplies of ores and nuclear fuels to all users of the community . Among other things, the Euratom Supply Agency (ESA) was established for this purpose. In this context, it is also worth pointing out an interesting Polish fact – until recently, the Director General of ESA was a Polish woman, Mrs. Agnieszka Kaźmierczak.
EU procedure for purchasing uranium
The Euratom treaty refers to uranium, inter alia, by terms such as ‘ore’, ‘source material’ and ‘special fissile material’. To put it very simply, these are terms used collectively in the context of the various materials needed for the nuclear industry – i.e. uranium, but also plutonium and thorium.
The supply Agency shall have the right of pre-emption for ores, starting materials and special fissile materials produced in the territory of the Member States. In addition, and most importantly, the Agency has the exclusive right to conclude contracts for the supply of ores, source materials and special fissile materials originating in or outside the Community.
Consequently supply contracts are invalid if they have not been concluded by the Agency.
Simplified and centralised options
As a rule, the conclusion of fuel supply contracts through the Supply Agency can take place on the basis of two procedures: simplified or centralized.
As part of the former the buyers of materials are entitled to obtain offers directly from manufacturers, intermediaries or other users of their choice and are free to negotiate supply contracts. Such an agreement must then be submitted to ESA and, after meeting a number of requirements, is finally concluded by the Agency. Importantly, although the Agency appears in the contract as a signatory, it does not act as a commercial party to the contract. Therefore, ESA does not assume any obligation to comply with the provisions laid down in the contract submitted to it for conclusion. The powers and responsibilities of the agency shall lie primarily within the limits laid down in the Euratom Treaty and in secondary law.
The other procedure is the exceptional one. It is initiated after the Agency has decided that the regular supply of nuclear material is at risk. This applies, inter alia, to situations where nuclear material is not available to users within a reasonable time or is only available at excessively high prices. The decision suspends the application of the simplified procedure and defines the scope of new procedures.
In case of both procedures, the Agency shall have the right to refuse to conclude an agreement if this could jeopardize the achievement of the objectives of the Euratom Treaty. Special rules also apply to the transfer, import or export of small quantities of materials and ores.
Legal challenges of the Polish nuclear power industry
As can be seen from the above examples, for Poland to develop its nuclear energy it needs to already start preparing to meet the legal requirements related to this branch of the economy. In addition to the unique specificity of the nuclear power plant investment process, potential investors must take into account numerous, very strict operating standards, related to the subsequent operation of the completed facility and the associated supply chain.
These include, but are not limited to, requirements for the long-term supply and transport of nuclear fuel, spent fuel disposal, liability for nuclear damage, nuclear safety and radiological protection, including for the employed staff. Undoubtedly, lawyers involved in nuclear projects will have to demonstrate not only knowledge of the regulations, but also numerous standards, best practices and understanding of the technical and physical processes associated with these projects, based mainly on foreign experience in this area.
The complexity and multidimensionality of legal regulations (national, EU and international standards) means that future investors should start studying their obligations as soon as possible, because – like the construction of a nuclear power plant – it will most likely be a time-consuming process.