Areva Snags $2 Billion in Loan Guarantees for Eagle Rock

This is a big deal for the nuclear renaissance in the United States, and even a bigger deal for Idaho – The U.S. Department of Energy today announced a $2 billion loan guarantee to help Areva, Inc., build its uranium enrichment plant at Idaho Falls.

In today’s announcement, U.S. Secretary of Energy Steven Chu said:

Increasing uranium enrichment in the United States is critical to the nation’s energy and national security. 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.

More information on Areva’s Eagle Rock Enrichment Facility can be found here.

This announcement, coupled with proposals in the American Power Act, could help Idaho and the Idaho National Laboratory further cements a role in the future of nuclear power in the United States, which is significant not only because of eastern Idaho’s nuclear heritage, but because of the expertise and facilities that exist here in handling and processing nuclear waste.

The award of the loan guarantees is conditional on Areva getting a combined construction and operating license from the U.S. Nuclear Regulatory Commission. That license is expected to be granted next year.

Areva, to use Dan Yurman’s word, is “ecstatic.” From his blog, a quote from Areva:

“Areva is elated by this decision which will enable us to continue development of our Eagle Rock facility in Idaho and contribute to rebuilding America’s energy infrastructure so we can produce more CO2-free electricity,” said Jacques Besnainou, CEO of Areva North America. “Areva has considerable experience building and operating enrichment facilities and is putting that experience to work with the Eagle Rock project.”

The news is good for current nuclear industry workers, both on the construction and operation sides, in Idaho. The Idaho Cleanup Project (where I work) is likely to resume workforce reductions as money provided for waste cleanup through the federal stimulus program dries up. Areva’s promised 1,000 construction and operational jobs will help soften the blow there.

Areva’s arrival in eastern Idaho is also significant as it adds another feather in the area’s small but growing alternative energy feathered cap. Hoku Materials, a major manufacturer of silicon solar panels, is building a manufacturing plant at Pocatello. The presence of both companies here could act as an attractor for other similar companies.

The $2 billion loan guarantee is just that -- a guarantee that $2 billion will be loaned to Areva as it builds the $3.3 billion plant. The money isn't a grant -- it'll have to be paid back. The guarantee, however, does make it that much easier for Areva to construct its plant and then sell the enriched uranium to pay back the loans it obtains.