Nuclear Outlook Thru 2017
It's Time to Let the Stigma Die
I was baffled last week by a comment I saw online. Perhaps some of you can explain it to me. It went something like this:
“Why would you invest in lithium batteries? They explode! Invest in safer oil and gas instead.”
My first thought: Gee, it's a good thing oil and gas don't explode. I couldn't tell if the poster was being sarcastic, but I sincerely hope so.
There is an overabundance of cluelessness in the world, and the energy market seems to have its own special brand. People pick favorites and deny that any other energy source — or energy storage tech, as the case may be — has any benefits at all.
It's all about playing to stigmas, which is dangerous in an investment situation. Investors need to be aware of all the aspects of what they're putting their money into, the good and the bad, to make a truly informed decision.
No investment is perfect. But when the good far outweighs the bad, it may be time to reconsider your bias.
Which is why I was once again baffled when I realized exactly how little attention nuclear energy is getting these days. In a world of emissions caps and clean power plans, why is one of the most useful energy sources in the world being practically ignored?
It's not because it explodes, is it?
Nuclear Outlook for 2017
It's time to face the facts: we're going to need nuclear power as we transition away from fossil fuels. And the sooner people overcome the stigma attached to nuclear, the sooner we'll see real progress.
I can't blame them too much, especially considering what happened at Pennsylvania's Three Mile Island plant.
In 1979, the plant had a partial meltdown, due as much to human error as to problems with the technology. The public panicked. My own grandma moved my mom and aunts out of Dauphin County for a few days to keep them out of harm's way.
And did this, the worst nuclear incident in the country, stop all nuclear development for good? Nope!
Nor did the much more dramatic Chernobyl disaster a few years later.
Even the more recent 2011 Fukushima disaster in Japan didn't stop the installment of more nuclear plants — it just delayed them a bit.
So what's keeping people interested despite the danger?
To keep it short, there are two main factors that should make you question any bias against nuclear power:
- It's clean
- It's reliable
Nuclear energy is the only completely emissions-free production method that can hold as high a capacity as 99%, meaning it's producing power nearly 24-7. No matter how efficient the technology is becoming, solar and wind will never be able achieve that, simply because they are intermittent energy sources.
The Energy Information Administration (EIA) estimates that nuclear energy production will continue to grow by 2.3% per year worldwide, reaching 4.5 trillion kilowatt-hours by 2040.
New plants are being planned and brought online in the U.S., India, the UK, Russia, and even Saudi Arabia, which is working to reduce its dependency on oil. But the country with the biggest growth potential for nuclear power, by a landslide, is China.
In the next few years, China is expected to more than double its nuclear capacity. The country is also supporting Britain's Hinkley Point project in southwest England and will have the majority share of another planned reactor project north of London. If you'll notice, even Japan is expected to bring some of its nuclear capacity back online. Granted, it'll be a slow, cautious recovery, but the benefits are just too good to pass up!
As of April 2016, there were more than 60 plants being constructed worldwide. Right in line with the EIA's predictions, 20 of these are being built in China. Russia has only a handful under construction, but another 25 being planned. Japan is behind with just two plants under construction, but remember, this is just the beginning...
To make sure everything goes smoothly, new safety precautions are being implemented all the time. In 2015, the International Atomic Energy Agency (IAEA) reported 2,118 in-field inspections on nuclear plants, 1,416 security cameras installed, and nearly 1,000 separate samples collected for analysis of nuclear content.
Those accidents weren't for nothing. Nuclear power regulations have become a lot more stringent, making new and added nuclear capacity that much safer. And that means it's time for nuclear's stellar progress to resume.
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The Explosion You'll Want to See
However, much like Keith Kohl will tell you not to invest in Tesla to get in on the lithium boom, I'm telling you not to invest in nuclear power companies to take advantage of the industry's growth.
The biggest chance for profits isn't in the electricity... it's in the commodity that makes that electricity possible: uranium.
All the pieces are in place to make uranium a win: flat demand over the past few years has prompted lower prices, producers have cut output accordingly, and now demand is about to make a serious jump.
Forget waiting for oil to recover, or even for a good deal on gold. Uranium prices are expected to double by 2018, and we'll start to see the benefits of that throughout 2017 for sure.
Despite being confused as to why no one is paying attention to this, I think that can definitely work to our advantage. After all, if we're the only ones getting in on the ground floor of uranium's comeback, we'll be getting the best deals on the market and raking in the biggest gains.
Until next time,
Energy and Capital