The current discussion around nuclear energy in Australia is very polarised.
The left side says one thing; the right says the other.
And most people decide what they think based on that.
As an investor, you’ve got to avoid this trap and stay open to all possibilities.
The truth is that things are moving along on the nuclear front.
It’s an opportunity you should consider taking advantage of. It also has compelling environmental and economic benefits for the world at large.
Of course, nuclear is just one part of an energy system in flux.
It’s not the be-all and end-all, and there are risks to think of too.
It might not be the right option for Australia, though, as I’ll show you shortly, many other countries think it is the right option for them.
The world is attempting a once-in-a-lifetime transition from fossil fuels to a mixed bag of alternative energy sources.
There are a lot more complexities and nuances to this than most realise.
But as I’ll show you now, despite the political debate in Australia, the rest of the world is forging ahead with the nuclear option as an important part of a future energy grid.
In fact, some big-name investors are backing this future with cold, hard cash.
More on that shortly.
But first…
Nuclear is a popular choice
Nuclear isn’t such a dirty word in most other parts of the world.
Consider this…
France has been running its nuclear fleet since the 1960s, and today nuclear power makes up 70% of its energy production.
The power plants are dotted around the whole country.
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| Source: Stanford University |
Nuclear has looked like a very smart option from France, especially these past few years.
Right now, they export 3 billion euros worth of energy annually to European partners such as Germany, who desperately need cheaper energy in the wake of the Russia-Ukraine conflict.
France is actually the second biggest nuclear power generator behind the USA.
The world’s premier superpower is broadly supportive of plans for further nuclear expansion with Democrats getting behind the ‘clean’ benefits and Republicans backing the idea of ‘made in America’ power generation.
Elsewhere…
Post-Fukushima, Japan still has plans to re-activate 33 of its 54 nuclear power plants by 2030.
It goes to show that economic realities will trump all else, even in places you’d think more likely to embrace alternatives.
What about the big two up and coming economies?
China and India both have plans for more nuclear power.
China has 24 new plants under construction (55 already operating) and India has 8 on the go (22 already operating).
Interestingly, India is pioneering the use of thorium fuel (instead of uranium) in several facilities.
This is thought to be more efficient, produce less waste, and is less dangerous than uranium. It’s also more abundant and easier to find.
But thorium isn’t the only new development in nuclear energy…
Don’t ignore SMRs
Last week, a Bill Gates-backed company started construction of a small nuclear reactor (SMR) demonstration plant in Wyoming, USA.
The company is called TerraPower and also counts South Korean giants Hyundai and SK Inc. as investors.
Now, many critics scoff at the viability of SMRs; however, as an investor, I prefer to follow the money, not the opinions of others.
And the fact is, there’s quite a bit of money going into SMR technologies right now.
Another SMR-focused tech company called Nuscale ripped 50% higher over May on moves by the US government to support local nuclear energy.
As I said before, most other government around the world are backing nuclear right now.
But it’s still early days.
The TerraPower demonstration plant will cost US$4 billion and, funnily enough, is situated on a coal plant site owned by a Warren Buffett-owned energy company called PacifiCorp.
From coal to nuclear – an omen of things to come, perhaps?
In addition to being smaller and cheaper to construct, SMRs are experimenting with different technologies.
For example, this particular SMR uses sodium instead of the usual water as a coolant.
Because sodium can absorb a lot more heat than water, it’s more cost-effective.
While this all sounds good, remember that this project has been in the works since 2008.
And it’s not expected to be ready to operate until 2030.
The time-lag critique of nuclear power is probably a fair one, though a lot of that lag comes from regulatory processes rather than engineering issues.
However, once proven, this technology could spread very fast, especially in developing Asian economies looking for cheap, low-cost base load power sources.
SMRs are also the perfect partner for a raft of AI-intensive data centres planned or in construction that are set to put severe stress on energy grids.
In fact, as AI’s strategic capabilities ramp up over time, energy security becomes even more of an issue than it is today—a fact that supports SMRs and nuclear more broadly.
Speaking of which…
A new report out this week
Energy seems to be developing into one of the decade’s biggest stories.
As I said at the start, there’s a lot of political noise and no easy answers. You need to do your research and follow the clues.
But such research could be more important than ever.
You see, in a way, the flux in the energy world mirrors the 1970s, an era of similar tumultuous economic times.
Look out for a special report coming out later this week on this very interesting and important topic.
Regards,
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Ryan Dinse,
Editor, Crypto Capital and Alpha Tech Trader
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