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Nuclear Power Profits

Nuclear's Worldwide Expansion

Written by Brianna Panzica
Posted August 13, 2012

It was with peaceful intent that the first uranium atom was split in a European lab while the world was on the brink of World War II.

Otto Hahn, working with several other scientists, discovered nuclear fission in 1938 after years of research into how to harness energy from radioactive elements. The vision was a powerful energy source like nothing ever seen before.

But then global war broke out, and the world's focus shifted. Intentions became nefarious, and in the U.S. the Manhattan Project developed nuclear reactions from uranium and plutonium. A darker side of the power was shown when in August of 1945 Hiroshima and Nagasaki were hit with the first atomic bombs.

No, nuclear weapons are not gone for good. Right now eight nations have nuclear weapons capability. But the world saw what sort of responsibility came with such a powerful energy source, and so Hahn's peaceful vision returned.

Today, 31 nations have nuclear power reactors. 13.5% of the world's power comes from nuclear. And 56 nations have research reactors.

Nuclear power hasn't even begun to peak. Right now, under-construction reactors have the capability to add 17% to existing capacity, and planned reactors could add an additional 48%.

This is enhanced by the climate change crisis that is plaguing the world. The United Nations recently declared that in order to avoid disastrous results, the climate cannot rise more than two degrees Celsius in this century.

To ensure this, the UN set a target for minimizing greenhouse gas (GHG) emissions. By 2050, in order to avoid a temperature increase above two degrees Celsius, GHG emissions must be reduced by 70%.

Nuclear can get us there.

Fossil fuels have high emissions. Natural gas emissions are lower than some, but there are still emissions. But some renewable sources are too expensive to match the cost-efficiency of conventional sources.

Nuclear power is cheaper than conventional power. And it has zero emissions.

A Worldwide Phenomenon

As I said before, 31 nations across the globe have nuclear reactors.

In those 31 nations, there are a total of 434 nuclear reactors and a total capacity of 372,000 MWe. But plenty more nations have either planned or proposed reactors expected to be online by 2030.

As of August 2012, 65 reactors were under construction with a combined capacity of 64,979 MWe. 158 were planned for a total capacity of 175,115 MWe. And 329 were proposed, with a total expected capacity of 369,915 MWe.

That would bring total global nuclear capacity to 982,009 by 2030. That's a nearly tripled capacity in just 18 years.

Even now, though only 31 nations have operating nuclear power reactors, many more actually use that power through imports.

Last summer, Italians overwhelmingly opposed an administrative plan to build nuclear reactors in the country. Yet the nation still gets 10% of its power from nuclear.

And officials in Denmark have long opposed bringing reactors to their nation. But the country imports enough nuclear power to satisfy 8% of its needs.

Plus, electricity isn't the only thing benefited by nuclear. There are also research reactors in 56 nations, used for research and production of isotopes for the medical and industrial fields. A number of marine vessels are propelled by nuclear power, and Russia has a fleet of icebreakers that are powered by nuclear.

Your Chance to Profit

After all that, this may sound painfully obvious, but I'll say it anyway: This is a profitable industry.

Nuclear has only been around for about 74 years. It's really young. And that means it hasn't even begun to reach its full potential.

With climate change on the line, we need to find a faster way than solar or wind to generate power and cut down on emissions.

We can't risk much more damage from pollution. Once it's done, it's done.

Besides, nuclear power prices average $15 per megwatt-hour. That's less than half the total average power prices.

And all you need to do is look at the numbers to see how high demand really is. This could be the next big industry.

So here are some of the major companies involved in nuclear power production. This includes uranium companies (the element that enables nuclear reactions), utilities, and companies that build nuclear reactors.

AREVA SA (EPA: AREVA)

In 2011, there were eight companies that mined 85% of the world's uranium, according to the World Nuclear Association. AREVA was one of these companies, mining 16% of the world's uranium last year. The company focuses on reducing the level of carbon involved in power generation, focusing on nuclear but also starting a move into the renewable energy sector.

The company's main mines are in Canada, Kazakhstan, and Niger, with a number of projects under development in Africa. And though it's one of the biggest companies in nuclear mining, its nuclear activities don't stop there.

AREVA also designs and constructs nuclear reactors, a sector which brought in 37% of the company's revenue last year, and its subsidiary AREVA Med, based in the U.S., is involved in nuclear medicine research.

Cameco Corporation (TSE: CCO, NYSE: CCJ)

Canada-based Cameco also mined 16% of the world's uranium last year, with operations in Kazakhstan and Australia and a heavy focus in Saskatchewan, Canada. The company has developed technology enabling it to safely extract the high-grade ore in the Canadian mines and control radiation exposure.

It also operates six nuclear power plants in Ontario, two of which are leased from Ontario Power Generation (OPG), in a partnership called Bruce Power.

Exelon Corporation (NYSE: EXC)

Exelon is the biggest nuclear power plant utility in the United States. The company owns and operates ten plants and 17 reactors in Illinois, Pennsylvania, and New Jersey, generating 20% of the nation's total nuclear power.

It has between 1,175 and 1,300 megawatts of updates planned for the next five years, and it boasts that 1,300 megawatts of nuclear could eliminate 6 million metric tons of annual GHG emissions. Roughly 93% of its capacity comes from nuclear.

The company also recently began a merger with Constellation Energy, which will add resale and wholesale capabilities to the company in addition to five nuclear reactors.

Entergy Corporation (NYSE: ETR)

Entergy Corporation sector Entergy Nuclear Operations, Inc. owns 12 nuclear reactors across the U.S. It is the second-largest nuclear utility in the nation. 60% of Entergy Corporation's profit margin comes from its nuclear sector, and it has 10,000 megawatts of nuclear capacity.

The company isn't currently constructing new plants, but it is working on improvements to its Grand Gulf Nuclear Station in 2012 to increase output by 13%.

And these are just the major players. There are plenty more companies involved in uranium mining, nuclear construction, reactor operations, power sales, and endless other operations that contribute to nuclear power production. And after last year's Fukushima disaster in Japan, safety has become a top priority, leading to even more updates and technology breakthroughs that could change the face of nuclear and turn it into the future of energy.

Good Investing,

Brianna Panzica

follow basic@brianna_panzica on Twitter

Energy & Capital's modern energy guru, Brianna digs deep into the industry with accurate and insightful updates into the biggest energy companies and events. She stays up to date with the latest market moves and industry finds, bringing readers a unique view of current energy trends. For more on Brianna, see her editor's page.

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