French Nuclear Investment Opportunities
Breaking News: French Nuclear Power Plant Bombed!
It didn't take much to bomb the Bugey nuclear power plant in France...
Just a motorized paraglider and an anti-nuclear activist with a serious set of stones.
It all went down a couple of weeks ago, when an unnamed activist flew over the 3 GW power station, threw a smoke bomb, and landed safely inside the facility.
He said he wanted to illustrate the external dangers of nuclear power. He accomplished much more.
You see, the timing couldn't have been better for the anti-nuclear crowd in France. Because just four days after security flaws were exposed at the Bugey nuclear power station, Francois Hollande of France's socialist party won the French presidential election.
My friends, Hollande may end up doing more damage to France's nuclear industry than an actual meltdown...
Au Revoir, Nuclear?
It doesn't take a rocket scientist to figure this one out.
France, a country that's more than 75% powered by nuclear, just elected a new president who has clearly stated his intentions of reducing the nation's dependence on nuclear to 50%.
And while there are opponents to his agenda, they are a vocal minority in a country that happily elected this anti-nuclear socialist to initiate some major energy policy changes.
Now, whether or not you agree with this guy's agenda or his politics doesn't change the fact that France's nuclear industry is under attack.
Hollande's nuclear reduction plan calls for a transition to be completed in about 13 years. In terms of energy transitions, this is a very aggressive goal.
Is it possible? Absolutely.
Is it going to happen? I'm doubtful.
Despite the fact that the French seem to be showing signs of interest in moving away from nuclear and towards renewables, the French economy is directly tied to its nuclear power dominance — particularly today, when the Germans, the Swiss, and the Italians are giving nuclear the cold shoulder.
It should also be noted that France is the world's largest exporter of electricity, an accomplishment that can be traced to its 63 gigawatts of nuclear power.
All this being said, the last place I'd pony up a few bucks for nuclear in the near term is France...
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Make a Dent, Make Some Money
I'm not saying nuclear is dead in France. Strictly from an economic stance, the country simply cannot survive without its robust supply of nuclear power.
However, over the next few years, this new government is going to go full force on its attempt to integrate more solar and wind into its energy mix.
In fact, over the course of the next five years, I expect to see France at least double its solar and wind capacity.
From an energy transition standpoint, it's not quite as big of a deal as you might think.
Today France's installed wind power capacity is around 6.8 gigawatts; its installed solar capacity is at around 2.5 gigawatts.
Combined, this contributes about 3.8% of the electricity consumed by the nation.
If solar and wind capacity do double within five years, this will still contribute less than 8% of the nation's electricity needs — barely making a noticeable dent in nuclear's dominance.
But from an investment standpoint, a doubling of installed capacity inside of five years is actually pretty enticing.
In fact, the wheels on France's new energy transition actually started to turn last month after the country approved bids for 3 gigawatts' worth of offshore wind projects.
State-owned utility EDF, in partnership with Alstom (PINK SHEETS: AOMFF), won three of the deals — and a fourth was picked up by Iberdrola (PINK SHEETS: IBDRY) of Spain.
My friends, these bid approvals alone represent $13.3 billion in wind energy investments.
Profits, Not Progress
Now I don't know how successful Hollande will be during his five-year term. Certainly his inability to understand how a real free market works makes me believe that France could be in for a not-so-pleasant ride in the very near future...
Last week, a senior advisor told reporters Hollande aims to make it financially painful for healthy firms to fire workers and will “arm wrestle” big employers like General Motors to force them to take a more “moral” approach.
The French president-elect told reporters he would seek to impose financial penalties on profitable companies that announce layoffs only in order to improve their share price.
Not surprisingly, GM announced it is now considering closing its factory in eastern France, and PSA Peugeot Citroen is expected to shut down a production site just north of Paris later this year.
Of course, my criticisms of this administration (while accurate) are irrelevant. Because they're not going to make us any money...
But if Hollande does get his way on energy policy, I won't think twice about capitalizing on a rush of solar and wind projects coming into France.
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.
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