Investors are turning bullish on nuclear

After years of disinterest, energy security concerns and the push for net zero are leading investors to bet on nuclear power. The fact that the world has not managed to meaningfully reduce emissions—despite commitments from most every country and billions spent on renewables—has made it clear that more dramatic action is needed.

Many of those trying to gauge investor interest look at spot Uranium prices, believing that these are a barometer for investor interest in nuclear. The fact that the spot price rose 55% between January and October speak loudly about the shifting sentiments and prospects for nuclear power.

According to Cameco's website, the world's largest publicly traded uranium company, “Ongoing geopolitical events coupled with the global focus on the climate crisis have created what we believe are transformative tailwinds for the nuclear power industry, from both a demand and supply perspective.” Not surprisingly, Uranium spot prices stood at $74.38 per pound at the end of October, based on month-end prices published by nuclear research companies UxC and TradeTech, up from just $18 in October 2016 and $47.68 at the end of 2022. According to Morningstar, nuclear related exchange traded funds were the best performing ETFs, with Sprott Uraniaum Miners ETF (URNM) gaining 13% over the summer.

Back in May, Bank of America’s Research Investment Committee (RIC) forecast a 20 to 40% upside on uranium and nuclear power after a decade of underinvestment. Bank of America published its research findings in a report called "The Nuclear Necessity" and pointed out that global demand for nuclear had grown with 60 new reactors being built, 100 more approved and plans for old reactors to be refurbished, adding to the positive investor sentiment.

The entire global economy is, in fact, poised to move into a new period of increased interest in building nuclear, premised upon macroeconomic forces that include "resource nationalism, energy security, war and inflation." According to Jared Woodard, Bank of America's Investment and ETF Strategist, "Every analyst I spoke to was bullish on prospects for nuclear power as a technology that's clean and meets the kinds of goals that so many policymakers are eager to hit in terms of reducing emissions."

Both sides of the political spectrum see the beneifts of nuclear, progressives like the low emissions and highly reliable capacity of nuclear for addressing climate change and conservatives like the national and energy security aspects. [Aside: What's been working in the U.S. Congress is that both Democrats and Republicans vote in support of bills that both protect existing and help next-generation nuclear power using voice votes. Pronuclear bills have been passed with bipartisan majorities in every administration since Barack Obama's, with the Biden Administration doing the most good to level the playing field for nuclear. Virtually every elected official supports nuclear but progressives still find it harder to explain their support to their constituents. Less so with Republicans.]

Read more at Reuters Investors are turning bullish on nuclear, by Paul Day, November 16, 2023.

Reuters, Best and Worst Performing ETFs in August, by Valerio Baselli, September 15, 2023.

Published by Nucleation Capital in Asset manager support, Capital reallocation, Carbon emissions, Climate policy, Corporate decarbonization, Energy abundance, International support for nuclear, Investor activity, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear innovation, Private companies, Public companies, Solving climate, Zero emission energy

November 3, 2023

Spain’s business lobby seeks nuclear extension

Spain's top business lobby groups called for extending the use of the country's nuclear plants, a move that was first proposed by the conservative People's Party (PP) and which became a hot issue during the recent electoral campaign. Spain's current government, led by acting Prime Minister Pedro Sanchez, nevertheless plans to start closing Spain's nuclear reactor fleet starting in 2027.

"Ideological positions should not prevent us from recognising the need to extend the useful life of power plants already installed, which guarantee the stability of the system," said Manuel Perez-Sala, chairman of business lobby Circulo de Empresarios, which says its members include 230 business leaders and top managers.

Nevertheless, the coalition deal between centre-left parties seeking to form a government confirmed "the orderly and progressive dismantling" of nuclear reactors starting in 2027. Teresa Riberta, Acting Energy Minister, has apparnetly subscribed to the false narratives spread by renewable advocates like Mark Z. Jacobson, and mistakenly accept the faulty and unsubstantiated notion that advanced economies can replace fossil fuel power plants with intermittent sources wind and solar.

This situation is much like the one faced by California Governor Newsom, in which energy experts from academia, industry and the state, called for the continuation of power from Diablo Canyon but the progressive left, comprising environmental groups and ideologic advocates for fossil fuels and renewables, called for the closure of Diablo Canyon. Governor Newsom was able to understand how ideologic concepts based on false assumptions will not keep California's lights on make the right call to save Diablo Canyon's 24x7 always on power. Newsom was able to get the majority Democratic California legislature to pass legislation to extend the life of Diablo Canyon.

Facts do matter and the erroneous assumptions spread about renewables' capabilities are apparent by virtue of the failure of the world to reduce emissions at all, despite enormous growth of wind and solar. We will be watching this situation develop in light of the world's failure to meaningfully reduce global emissions.

Read more at Reuters Spain's business lobby calls for extension of nuclear power, November 3, 2023.

Published by Nucleation Capital in Asset manager support, Carbon emissions, Climate policy, Corporate decarbonization, Energy abundance, Government support, International support for nuclear, LINKS, Politicians supporting nuclear, Private companies, Public companies, Solving climate, Zero emission energy

May 30, 2023

Bank of America: “The Nuclear Necessity”

Bank of America's Research Investment Committee issued a landmark report on May 9th to its securities clients entitled "The Nuclear Necessity," finding evidence of increasing demand and giving a bold "BUY" recommendation for nuclear and uranium. (Note: Initially, only a summary image of the top-line take-aways was shared on Twitter. More recently, BofA has chosen to share the report online.)

This report gave a bullish assessment of the nuclear power industry and its new growth prospects. (Note: Initially, a summary image of the top-line take-aways was shared on Twitter. More recently, BofA has chosen to share the report online.) The entire report is worth reviewing but there were two bullish catalysts not priced into the market in the analysts' opinion: 1) a potential G7 sanction on Russian uranium and 2) policy shifts towards nuclear "as the best climate solution."
We are very excited to see this analysis by a big bank and expect that many others will follow, as it has become clear that nuclear has hit an inflection point. We also believe there are several other very important catalysts not included in the BofA analysis. Reach out to us if you'd like to learn more about what we are seeing happening in the public markets and especially if you are intrigued to participate in the growing private markets. Nucleation provides investors with several unique vehicles which enable affordable access to the nascent but growing areas of deep tech innovation, expansion and improvement of collateral support, supply and integration services through our venture fund offerings.

(Click image to access the full report)

References

Bank of America Securities/BofA Global Research: The RIC Report, The Nuclear Necessity, published May 8,2023.

Updated: October 2023

Published by Nucleation Capital in Asset manager support, Capital reallocation, Carbon emissions, Climate policy, Corporate decarbonization, Energy abundance, International support for nuclear, Investor activity, LINKS, Nuclear competitiveness, Nuclear financing, Nuclear innovation, Private companies, Public companies, Solving climate, Zero emission energy

September 13, 2022

DOE finds that 80% of US coal plants could be converted to nuclear

According to a new DOE report, hundreds of coal plant sites could be suitable for conversion from coal to nuclear energy in an economically-viable way. In fact, as much as 80% of qualifying retired and operating coal plants appear to have the capacity to undergo what the report calls the "Coal-to-Nuclear" (C2N) transition. (Note: we have previously reported on efforts to develop standardized and efficient processes for this conversion to happen quickly.)

Amy Roma, an attorney with Logan Hovells writes:

"The 127-page DOE report concludes that hundreds of United States coal power plant sites could be converted to nuclear power plant sites, adding new jobs, increasing economic benefit, and significantly improving environmental conditions. As part of the study contained in the report, the research team examined over 400 retired and operating coal plants based on a set of ten screening parameters, including population density, distance from seismic fault lines, flooding potential, and nearby wetlands, to determine if the sites could safely host a nuclear power plant. After screening, the research team identified 157 retired coal plants and 237 operating plants as potential candidates for a coal-to-nuclear transition. The report determined that 80% of those potential sites, with over 250 GW of generating capacity, are suitable for hosting advanced nuclear power plants, and that while these nuclear power plants vary in size and type, they could be deployed to match the size of the site being converted. See DOE Report at pp. 2, 22, 71."

According to the DOE's Investigating Benefits and Challenges of Converting Retiring Coal Plants into Nuclear Plants report, a coal-to-nuclear transition could increase nuke capacity in the U.S. to more than 350 GW.

Power Magazine reports that, depending on the technology used, nuclear overnight costs of capital could decrease by 15% to 35% when compared to a greenfield construction project, through the reuse of infrastructure from the coal facility.

In a case study replacing a large 1200 MW coal plant with NuScale’s 924 MWe of nuclear capacity, the study teams found regional economic activity could increase by as much as $275 million and add 650 new, permanent jobs to the region analyzed. Nuclear can have a lower capacity size because it runs at a higher capacity factors than coal power plants.

In general, DOE says the occupations that would see the largest gains from a coal-to-nuclear transition include nuclear engineers, security guards, and nuclear technicians. Nuke plants could also benefit from preserving the existing experienced workforce in communities around retiring coal plants sites.

Read more at Reuters: About 80% of U.S. coal plant sites suitable to host nuclear reactors -U.S. DOE report, published September 13, 2022. Power Magazine, "DOE study finds hundreds of U.S. coal plants could convert to nuclear," by Kevin Clark, published September 14, 2022. And Hogan Lovell's Engage, with analysis by Amy Roma, entitled "New DOE Report shows former coal plants can support new nuclear plants and a just energy transition," published September 20, 2022.

Published by Nucleation Capital in Advanced Nuclear, Carbon emissions, Climate change, Construction costs, Energy abundance, Fossil fuels, Future of Energy, Government support, History Timeline, History-making, Land Use by Energy, LINKS, Nuclear innovation, Reduced ecosystem impacts, Solving climate, Zero emission energy