Nuclear power fell out of favour worldwide after the Fukushima nuclear disaster in 2011. However, interest in nuclear energy seems to be rebounding as countries try to meet their ambitious climate goals. Also, the expanding global energy crisis is increasing the need to reconsider the potential of nuclear power.
Nuclear energy is increasingly being embraced and could be on the brink of a renaissance because nuclear power plants produce almost no greenhouse gas emissions during operation.
With rising energy prices and global emissions, the need to rely on the nuclear economy seems more important than ever. Moreover, the pandemic-led supply chain issues, aggravated by the war in Ukraine, have highlighted the importance of energy security and independence.
According to the International Energy Agency (IEA), nuclear power generating capacity will need to more than double to achieve net-zero emissions by 2050. The IEA had announced clean electrification as a top investment priority for reaching this goal, and nuclear power is a carbon-free energy source that can operate at scale and deliver power anytime.
Nuclear power is clean, more dependable and resilient, and space-efficient. It could easily be the dominant source of clean energy in the future. In fact, with the technological advancements in this space over the past decade, nuclear power is becoming smaller, safer, and faster.
Therefore, nuclear energy is at an inflection point, getting a second chance to solidify its position in the global energy grid. However, the momentum depends on international cooperation around safety and best practices.
The changing sentiments around the industry could bolster growth, and early investors may reap rewards.
Nuclear Power in the United Kingdom
Earlier this year, a £75 million Nuclear Fuel Fund was opened to boost domestic production of fuel for reactors while encouraging investment and expansion in new nuclear infrastructure and protecting jobs in the sector.
“We’ve got big plans to boost British nuclear power, so it makes perfect sense to ensure we have a strong, resilient, domestic fuel supply chain to match,” Business and Energy Secretary Kwasi Kwarteng said. “This funding will kickstart projects in the UK and generate private investment in facilities that will fuel the nuclear reactors of today and tomorrow, shoring up our energy security while creating jobs,” Kwarteng added.
The government had also introduced the British Energy Security Strategy, setting an ambition to approve up to 8 new reactors by 2030, helping further boost energy independence.
In addition, the government issued £3.30 million in funding through the Advanced Modular Reactor Research, Development and Demonstration (AMR RD&D) programme to help develop the next generation of nuclear reactors. It will back the early-stage innovation for six winning projects, aiming to revolutionise how the UK gets its energy.
Also, a £120 million Future Nuclear Enabling Fund was opened this year to support the development of new nuclear energy projects, stimulate competition and encourage investments.
As part of its new energy security strategy, the government has set a target of 24GW of nuclear capacity by 2050. This represents up to 25% of the UK’s projected electricity demand. The nation is investing heavily to move away from imported fossil fuels towards secure, sustainable, and affordable alternatives.
As decarbonization of energy systems gets emphasised, investment in new nuclear capacity is increasing, boosting the prospects of prominent nuclear players Exelon Corporation, Cameco Corporation, Yellow Cake plc, and Denison Mines Corp.
The UK has privatised power generation and liberalised its electricity market to promote capital investments.
Nuclear Power Gaining Traction Worldwide
The Biden administration in the United States is pushing for nuclear power to be a key part of the sustainable energy future. The government is pumping money into nuclear energy and expects it to be a worthwhile investment to meet Biden’s pledge to reduce greenhouse gas emissions by 50% by 2030.
Last month, international leaders discussed nuclear power as the potential way forward in weathering the evolving energy supply crisis and meeting climate change goals. The three-day International Atomic Energy Agency’s nuclear power ministerial meeting, convened in Washington, featured heads of government agencies, nuclear companies and utilities, and international NGOs.
The ministerial meeting came as countries worldwide are struggling with the ballooning energy prices this year because of the war and the consequences of associated policy actions, including sanctions and Russian retaliation on energy markets. This is encouraging countries to consider nuclear energy more aggressively.
The argument that has restrained the large-scale deployment of nuclear power involves safety and cost. The nuclear catastrophe of the past has caused widespread fear. Moreover, the safety aspect of disposing of nuclear waste needs to be considered.
According to the IAEA’s Power Reactor Information System (PRIS), 437 nuclear power reactors currently operate in 32 countries supplying about 10% of the world’s electricity and around a quarter of all low-carbon electricity. Moreover, there are 57 reactors under construction in 18 countries.
The agency recently revised its annual projections of the potential growth of nuclear power capacity to 2050, increasing its high-case scenario by 10% compared to the 2021 report. It now projects world nuclear-generating capacity to more than double to 873GWe by 2050.
Key Takeaway for Investors
The key takeaway for investors as nuclear becomes key to achieving net zero for many countries, is monitoring the demand for uranium. As demand exceeds supply, Uranium stocks could see a skip in their step at the centre of the transition. Because regardless of nuclears controversial past, it is currently poised as one of the most affordable low carbon energy options we have.
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