Notice

HALEU deconversion competition: clarification questions

Updated 21 August 2024

Clarification questions (added 21 August 2024)

Will the Grant be subject to the terms of the Subsidy Control Act?

All subsidies given by the UK Government are required to adhere to the Subsidy Control Act 2022. HMG will ensure this grant is adherent. Details on this can be found in the assessment guidance published on GOV.UK under ‘Assessment Criteria – Subsidy Control Assessment’.

Which sections of the portal will be evaluated and what proportion of the overall score are these worth?

The sections we will be assessing are:

• Technical and deliverability, worth 40%
• Strategic, worth 25%
• Economic, worth 25%
• Social Value, worth 10%

Further details can be found on the application guidance on the GOV.UK page.

When can we discuss with HMG the standard Terms & Conditions shared on the competition page? And is there scope to make changes to these if successful in being awarded grant funding?

Any specific questions about HMG grant terms and conditions will be picked up with the successful applicant once they are confirmed. Clarification and definitions can be offered on the terms and conditions supplied with the grant award. The terms and conditions provided on the competition website are standard and provided to give clarity over what to expect from the grant terms and conditions which will be put in place for the deconversion competition.

There may be scope for minor changes to be made in specific scenarios where considered appropriate but we cannot guarantee any or all changes will be accommodated.

Clarification questions (added 8 August 2024)

Can the deadline for submissions be extended?

Following feedback, we have decided to extend the deadline for applications to 30 September at 5pm. Due to DESNZ governance requirements and due diligence processes, we are unable to extend this deadline further.

Could you please provide a copy of the Code of Conduct for Recipients of Government General Grants?

We have uploaded a copy of this to the GOV.UK HALEU page.

Could you please provide a copy of the Independent Accountant’s Report form referenced in paragraph 8.1 of the Terms and Conditions?

This template is currently being reviewed and we will provide a copy once it has been finalised.

Could you please define ‘Pre-Payment Conditions’ referenced in paragraph 4.5 of the Terms and Conditions?

Pre-Conditions are generally determined during Due Diligence and listed in the Final Grant Offer Letter (FGOL). Such conditions are set on a case-by-case basis and so may vary between Applicants. While Pre-Acceptance Conditions must be met prior to a signed FGOL being accepted by the Department, Pre-Payment Conditions must be met prior to the first payment of the grant instalment. Applicants who progress to FGOL are advised to review their FGOL to check for the inclusion of any Pre-Conditions.

Could you please define ‘Exit Plan’ referenced in paragraph 27 of the Terms and Conditions?

An ‘Exit Plan’ is detailed plan on how the company would go about the process of ‘the cessation or seamless transfer of the Funded Activities’, to provide confidence to the Department that this can be completed in an orderly manner. In the event of an ‘Exit Plan’ being required of an Applicant, further discussions can be organised to outline the level of detail expected.

Has the economic assessment spreadsheet been updated?

We have now updated the economic assessment spreadsheet. If you downloaded a copy of the spreadsheet prior to the publication of this update, please download the latest version.

How do I apply?

You must submit your application through the portal. You can get access to the portal by emailing HALEU@energysecurity.gov.uk.

Is submission of a risk register, and a Master Data and Assumptions List (MDAL) acceptable to demonstrate the project risks and governance and if not, what is the preferred format for this information?

Applicants must provide supporting documentation on project risks and governance arrangements. We would expect the response to include:

• A project risk register, with risk analysis and quantification carried out on the key risks, including mitigations and the planned response. This should also include details of your project assumptions, dependencies and constraints.
• Details of your risk management process and escalation mechanisms

This can take whatever format you deem most appropriate but cannot exceed the page limit of 1 page plus one accompanying spreadsheet (which could be a risk register, for example).

What information is required for the project plan and project schedule and what is the difference between these?

Below is what is expected within the project plan and project schedule, as set out in the application guidance. We expect you to use your best judgement on which information should be included within each section, but we would expect the project schedule to include a more detailed breakdown of the proposed delivery of the project.

• Project summary – No more than 2 pages

Applicants must provide a summary of their proposal which includes the overall approach to technology, siting, infrastructure plans, major milestones with costings, and the Applicant’s suitability to deliver the project.

• Project Execution Plan – No page limit

Applicants must provide a narrative return detailing the approach to delivery of the proposed project. We would expect the response to include:

1. A credible project plan detailing how the two project objectives will be delivered. This should include a Gantt chart to be provided as a separate Word, PDF, Excel, MS Project or other file, not subject to page limits, with the file name ‘Section X: project plan [Applicant or consortium name]’.
2. A project schedule, with workstreams and high-level milestones clearly identifiable and a more detailed task breakdown, which outlines the resource and costs of these activities. This should distinguish between the metal and oxide components of the project but also highlight interactions and describe where cross-benefits can be obtained between the two. It should also detail how auxiliary requirements such as analytical and storage facilities will be provided, and include all site planning requirements including those specifically relating to a nuclear site licence.

If the application is to deliver the project with other organisations such as a consortium or through subcontracting specific requirements, we expect the response to include a matrix showing named parties, detailing the distribution of responsibilities and deliverables.

We also expect this to include an assessment of the activities the Applicant will undertake to determine if any of the items (including technology) they will use to deliver the proposed work require an export licence, or the permission of another Government, along with details about the items the Applicant thinks might be subject to such requirements and their understanding of the processes required to apply for and secure such licences or permissions.

Can diagrams/ images/ charts be used as part of the submission? If so, can these be submitted in addition to the allocated page limit?

Yes, you may use diagrams/ images/ charts in your submission, but these must be embedded into your upload and be within the allocated page limit.

Are there limits to either the number of attachments or the file size that the portal will allow?

Each file is limited to 15 MB. You must follow the page limit when uploading documents. Any information in excess of the page limit will not be considered when assessing your application.

Would it be acceptable to cross-reference responses (e.g. ‘Further detail on the delivery timeline is set out in our response to the Project Execution Plan’)?

Within the Technical and Deliverability section, where we have requested multiple documents, you may cross reference documents to avoid duplication of information. However, assessors will not necessarily assess your application in whole, and will only have access to the information in the section they are marking, so please do not cross reference between sections.

Would it be possible to say that additional evidence is ‘available on request’?

Assessors will be able to request additional information from Applicants where it is deemed necessary to accurately judge an application. You are welcome to offer additional information on request, but this does not guarantee that an assessor will request such information. You should aim to provide as detailed and complete answers as possible within the permitted page limits.

Why is the Section C workbook classified as OS- Commercial, rather than a lower level of classification?

As per Government Security Classifications policy, we have determined that the economic assessment spreadsheet must be classified as Official Sensitive Commercial. This is due to the level of commercially sensitive information which you will submit within this template, which should remain confidential.

Can you please confirm the level of co-funding required?

There will be a 70/30 split of co-funding. The economic spreadsheet has been updated to show this.

Can the funding be used for non-GBP costs incurred in the delivery of the project?

Yes, where it is necessary to make non-GBP purchases, these costs will be allowed (providing they meet the other requirements). If converting values from another currency, Applicants must provide evidence of the price/cost estimate in the original currency and supply the exchange rate used to convert the values to GBP. We will only pay costs in GBP.

Which types of costs can be paid for using the grant?

Costs must be capable of being capitalised and/or treated as capital expenditure in line with the Consolidated Budgeting Guidance. If you wish to use the grant for any Research and Development costs, the costs must be capable of meeting R&D capital requirements set out in the Consolidated Budgeting Guidance.

Will any IP developed prior to the project commencement date remain owned by the Applicant?

Yes, all IP will remain owned by the Applicant.

Will the provision of Transport Cylinder washing, inspection and recertification, prior to their return to the enricher, need to be included within the Applicant’s proposal?

The Department’s requirement for the HALEU Programme is to deliver a fully functional front-end fuel cycle for HALEU. There is no specific requirement to provide this detail however we recommend suppliers engage with Urenco (the grant recipient for the HALEU enrichment facility) about preferred arrangements for UF6 transport between the enrichment and deconversion facilities. We are supportive of discussions taking place at an early stage between those interested in delivering HALEU capabilities.

Can you clarify the requirements for capacity and throughput of the deconversion facility?

The initial oxide plant must meet or exceed 10,000 kgU of annual capacity. This refers to kilograms on a uranium basis, (i.e. kgU, not kgUF6 or kgUO2).

The design of the facility must allow for future expansion up to at least 30,000 kgU per year. There is no specific date or requirement for future expansion of the facility, but we would anticipate the facility would expand in line with the UK’s enrichment capacity and future market demand for HALEU.

Similarly, there is no specific date or requirement for the deployment of the additional 5,000 kgU line for metal production. We anticipate that the successful deconverter would choose to deploy this line when market conditions are favourable.

The successful recipient of the grant will be expected to engage with HALEU delivery partners to align delivery timelines and establish more specific output and offtake requirements.

Does the Department have any additional product performance requirements?

The Department has no additional product requirements or specifications beyond annual capacity. We would anticipate suppliers would contact potential customers to ensure their deconverted product is suitable for use.

Can you clarify the meaning of the RFP Section A in the Technological Approach section?

The Department confirms that Section A, Point 5 ‘Scalability’ in the Technological Approach section of the application form refers to scaling of the initial plant from 10T to 30T. However, information on further scalability, either the same or new facilities, would be beneficial to include.

Clarification questions (added 19 July 2024)

Could the deadline for clarification questions be extended?

The date for clarification questions has been extended until 5 September 5pm. Questions received after this date may not be responded to.

Additionally, we have extended the deadline for Expressions of Interest until 5 September 5pm.

Is it possible to extend the deadline for submissions?

The submission date remains the 9 September 12pm. If an applicant feels there is sufficient justification to request an extension they can email HALEU@energysecurity.gov.uk with this request. Any request should detail why this is necessary and the benefits it could bring to the competition. There are no guarantees that an extension will be granted and any extension that is granted will apply to all applicants.

Any changes to the dates of the competition will be published on the official GOV.UK page.

Is it possible to extend the page limits for submissions?

The Department intends to keep page limits as currently set out in the guidance. The available page limit will be factored into the scoring of each section.

When will the economic assessment workshop take place?

We will be running a workshop on completing the economic spreadsheet template on Monday 22 July 11am to 12pm. If you would like to attend this, please email HALEU@energysecurity.gov.uk with the names and email addresses of those who would like to attend.

When are the bid results expected?

We are aiming to assess the bids in the autumn. This will then be followed by due diligence. We expect to be able to formally announce the winner towards the end of this year to early next year, depending on how long the due diligence process takes. We will provide more specific dates nearer the time.

Will it be possible to change the grant terms and conditions?

The terms and conditions published are standard for all government grant awards, and we are not looking to make any changes to these. Changes can be made in exceptional circumstances, if required. We would expect you to notify us of any issues with the terms and conditions as early as possible.

Will applications be made public? Do we need to sign NDAs?

Applications will not be made public but could be subject to Freedom of Information requests (FOIs). If an FOI request is received the Department will need to consider what information is disclosed or what needs to be withheld under an exemption. Any FOI request received is considered on a case-by-case basis and any third party subject to the disclosure of information will be consulted.

Only the necessary people within DESNZ will see any commercially sensitive information to assess bids and conduct due diligence. If you think your company will require an NDA to be put in place, please let us know.

What are the expected delivery dates and is there any room for these dates to change?

The deliverables attached to the grant offer will need to be completed by the 31 March 2030 as this aligns with the end of the funding period. However, the plant is only required to be operational by 2031 to align with the enrichment capability. There is no specific expectation about operations that will be completed during this period – this would be a decision for the recipient.

It will be crucial for any potential grant recipient to work closely with all HALEU delivery partners to ensure delivery timelines remain aligned.

Will DESNZ consider any offtake agreements?

DESNZ will not be considering any offtake agreements.

Do all bids need to be submitted through a UK-based company?

No, bids do not need to be submitted through a UK-based company however grant awards can only be made to a UK registered company and you will need to provide a UK company registration number as part of the application process.

In the event that the bid is compiled by a company registered outside of the UK the application should make it clear this has been done on behalf of the UK registered company.

What evidence will be required on siting and licensing?

Applicants must provide evidence of access to a UK site which has a license that covers the deconversion of HALEU and associated processes or provide a detailed plan for securing a UK site and/or obtaining the relevant planning permissions and site license, with specific timelines and qualified resource requirements identified for each step.

Evidence could include a signed lease agreement for a licensed nuclear site, a memorandum of understanding or letter of intent to acquire a site, alongside clear timescales and plans for site acquisition and licensing.

Following submission of a bid, is the company committed to delivering what has been outlined in their application?

No, a commitment is only made on the signing of the Final Grant Offer Letter after an offer has been made.

Will negotiations take place following bid submission?

No, however HMG reserves the right to request additional information if this is deemed necessary to effectively judge applications.

Can the technology used originate from outside of the UK?

If the Grant Recipient owns the Intellectual Property, we are happy for the technology to have originated in a country outside of the UK. The IP will remain the property of the Grant Recipient.

Can you confirm the approach which DESNZ will take towards the funding of risk/ contingency for the project?

The total amount of grant funding available for this scheme is £70m.

The exact value of the grant awarded will depend on the application presented by the successful recipient and the completion of financial due diligence, to consider the minimum level of funding required, which will be conducted by the Departments Central Grants & Loans team.

The due diligence process ensures that costs are accounted for and reasonable. Applicants are advised to make sure that any estimates are explained and includes assumptions made which consider risk and inflationary pressures.

This will then be considered as part of the due diligence process to determine if these costs are reasonable and allowable. This is a standard process for all government grants.

We are not sure what FRS 1024 is, please can you confirm if you mean FRS 102?

We can confirm that the application guidance should say FRS 102. We have amended the guidance to reflect the change. Costs must be as detailed by UK FRS 102 and/or international accounting and financial reporting standards.

What will be the role of NNL?

The National Nuclear Laboratory (NNL) is being considered for a grant from the HALEU Programme which will fund skills and capability development and a subsequent programme of research and development work. They will not be charging for this support.

Collaboration with NNL will look different depending on the applicant, so we encourage you to speak directly to NNL regarding your plans.

It is our expectation that if successful NNL will collaborate and align their R&D to the needs of the deconverter to enable the successful development of the commercial deconversion facility. However, if there is support requested that goes beyond the scope of NNL’s R&D work that you identify and would like to pursue, we anticipate NNL would charge for this.

For any further information, please speak to NNL directly, who have been advised to work with all prospective bidders.

What does the throughput of the facility need to be?

The facility should be capable of processing at least 10,000 kgU per year of HALEU by 31 March 2030. The actual amount processed by the plant will become clearer when we are more certain of market demand. We anticipate that Urenco’s HALEU enrichment plant will have an initial production capacity of approximately 10,000kgU, rising to up to 30,000kgU with future facility expansions. We would expect the HALEU deconversion facility to have similar scope for expansion of capacity.

What will the other HALEU funding be used for?

We have already made an award of £196m to Urenco for HALEU enrichment capabilities as well as to the Office of Nuclear Regulation (ONR) and the Environment Agency (EA) to develop the appropriate regulatory and oversight package for the programme.

The remaining HALEU funding will be used for transport and skills and capability development.

We are not able to provide details of the exact distribution of the funding.

Will there be any role for the Dalton Institute?

The Dalton Institute will not be receiving any direct funding under the HALEU programme but we expect there to be a role for universities in undertaking research and development and providing graduates and PhD students into industry.