Collinson Grant analysed the market potential of the U-Battery.
Urenco is an international supplier of enrichment services for the civil nuclear market. It has operations in four countries and serves utility customers worldwide engaged in supplying low carbon electricity through nuclear generation.
The majority of these customers source uranium hexafluoride (UF6), which URENCO subsequently enriches to international specifications. This enables the customers to continue to the next stage of the nuclear fuel supply chain.
The U-Battery is a modular power unit developed by URENCO and partners that uses enriched uranium and generates electricity and heat for local consumption. Each unit can generate up to 4MW of electricity and requires refuelling only once every five years. It is aimed at:
- large industrial consumers who would benefit from on-site generating capacity for heat and electricity (<50MW equivalent)
- balancing the energy mix on a network that has a contribution from renewable powers sources such as wind and photovoltaic.
Its potential benefits include a secure and continuous supply of energy, the flexibility to locate a plant in close proximity to the energy user, access to a carbon-free source of base load electricity, a stable energy price, as well as a low initial capital outlay and a competitive cost of energy. Collinson Grant was requested to analyse the market potential of the U-Battery.
- gathering relevant data for analysis and discussion with relevant URENCO personnel
- defining the potential market segments for the U-Battery
- assessing its value proposition relative to that of the potential competition
- estimating the U-Battery’s market potential in the UK based on levelised costs issued by DECC (more recently BEIS)
- assessing its prospects in various other geographical markets.
We concluded that:
- the U-Battery could potentially serve three distinct market sectors in which the priorities of the respective customers varied and for which the business models would thus differ
- the U-Battery had an inherently strong value proposition and its attractiveness would depend on the ability to achieve a competitive cost structure through product standardisation and mass production
- an appropriate regulatory environment would be the most essential prerequisite for the U-Battery’s commercial success as it would influence (among other aspects):
- the length of the product development cycle
- the level of external engagement in the planning and regulatory processes
- ongoing operational costs
- the timing of international market development
- the ease of disposing of (or removing) a plant at the end of its useful economic life.
Dominic Kieran, Executive Director, commented:
‘Collinson Grant undertook analysis, drawing on many sources, to give us and our partners confidence that there was a potential market. This underpinned our decision to continue investing in the project.’