On August 3rd, President Obama made a historic announcement aimed at reducing air pollution and carbon emissions, taking real action to improve air quality and address climate change. The result was the Clean Power Plan, which includes support for the five nuclear reactors now under construction in the U.S. A week later came word that Japan finally restarted its first nuclear reactor nearly 4.5 years after the Fukushima-Daichi disaster. India announced this summer that it intends to build a large, strategic uranium reserve, and China continues its aggressive nuclear build-out. In short, there has been a lot of great news this summer in nuclear energy. Yet, in addition to these key events, there are even more reasons to support a bullish case for the nuclear sector. Let’s take a closer look.
As the CEO of Energy Fuels, a leading publicly-traded U.S. uranium miner, it is important for me to closely follow what is happening across the entire energy sector, as uranium of course is the fuel for nuclear energy. Therefore, I have been tracking some other really interesting developments from privately held entities that seem to have gone unnoticed, but greatly support the long-term positive view of the nuclear sector.
There was news on August 7th from the small modular reactor (SMR) world that didn’t get the press it truly deserved. Energy technology company Holtec International, based in Jupiter, Florida, announced a long-term partnership with Mitsubishi Electric Power Products, whereby Mitsubishi will develop instrumentation and control systems for Holtec’s 160 Megawatt SMR. Why is this so important? Back in March, President Obama announced his support of SMR’s, or nuclear power plants smaller than 300 megawatts in size, as a clean energy source by way of an executive order.
There’s also an under-the-radar buzz growing in anticipation of NuScale Power’s upcoming exposition in Oregon. This event will likely be another positive development for the nuclear industry. NuScale is developing an exciting modular SMR technology that can be scaled from 50 to 600 Megawatts. Indeed, there are already well over 250 people committed to tour NuScale’s facilities and learn more about the company’s plan for development and deployment. The anticipation for the event, to be held August 20th and 21st, is further evidence that there is a lot of interest in the future of nuclear energy and the executives that are guiding this new kind of nuclear plant. This may be why NuScale’s CEO John Hopkins was named Vice Chairman of the U.S. Chamber of Commerce last month. Clearly, Hopkins is on the leading-edge of bringing economic, scalable and carbon-free nuclear technology to market. In addition, TerraPower, which is backed by Bill Gates, is making organizational changes to potentially move toward commercialization of their traveling wave reactor, which could use both depleted and natural uranium as fuel. By adding Lee McIntire, former Chairman and CEO of CH2M Hill, one of the World’s leading engineering firms, there is growing excitement that the company may be moving beyond the R&D stage.
In short, there is a lot of innovation happening in the World of nuclear energy.
Turning to the commodity markets and looking at spot uranium prices, it’s hard not to notice how much better uranium prices have held up versus much of the commodity space this summer. While uranium is largely unchanged since June and trading at roughly $36 per pound, crude oil prices have dropped over 31%, gasoline and natural gas are off 16%, gold is off 9% and copper is off 20% during the same period according to Nasdaq. While uranium prices have been steady, I expect to see prices increase as utilities begin coming into the market to fill their large, currently uncovered, nuclear fuel needs.
Finally, I would be remiss not to reiterate my view that if the U.S. truly expects to come remotely close to meeting its new pledge to cut carbon emissions by up to 28% by 2025, U.S. policy-makers must embrace all forms of nuclear power – SMR’s AND large nuclear generating stations, new AND existing units. They are all sources of clean electricity, considering that the country’s current fleet of nuclear power plants generates about 63% of all low-carbon/low-emission energy in the U.S. and avoids billions of tons of air emissions. It is encouraging to see grassroots political efforts in the U.S. support our existing fleet of reactors.
With Japan taking its first step to returning to the nuclear energy family, President Obama moving forward with the Clean Power Plan, growing recognition of the important role of nuclear power in providing clean, carbon-free electricity, and this summer’s under-the-radar news in nuclear innovation, it is hard not to get excited about the nuclear and uranium sectors these days.
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