The First Nuclear Reactor Since the 1970s
The U.S. Department of Energy is planning to build the first nuclear reactor in America since the 1970s. And it has the uranium investment community buzzing with excitement.
Is this the beginning of a new dawn for nuclear energy?
Or just another dead end?
Two weeks ago, Energy Secretary Rick Perry announced the DOE would officially launch the Versatile Test Reactor (VTR) program.
The project will be overseen by the Idaho National Laboratory and use GE Hitachi (GEH) Nuclear Energy's PRISM technology.
GEH said its PRISM technology uses principles proven by a prototype it has been developing for over 30 years. According to the company, its PRISM technology can produce up to 100 times more power compared to current reactors using the same amount of fuel.
GEH also says PRISM can recycle used nuclear fuel, thereby reducing waste.
But this nuclear plant won't be producing any electricity.
Instead, the VTR program was created to accelerate the development of fuels and materials used for future nuclear power plants.
It's a “test” reactor.
Peggy McCullough, senior vice president and general manager of Bechtel’s Nuclear, Security, and Operations, says:
Advanced reactors hold great promise but their fuels and materials need the proper testing before they can be licensed and used in energy-producing reactors. The U.S. currently has no capability to test these components. That testing capability is what the [VTR] will provide. It’s extremely important for the science community, industry, regulators, and the future of nuclear energy research.
What McCullough is talking about is generally referred to as generation IV nuclear reactors.
These types of reactors are cooled with substances other than water. Those substances include liquid sodium, molten salt, gases, and molten lead.
Using these substances to cool reactors is believed to be much safer because they can cool without backup power and are said to produce less waste.
The work being done by the DOE and GEH is the start of a new era for nuclear power. But it's going to take quite a while for the sun to rise.
Fact is, nuclear energy has been a political dead-end over the past several years.
During his initial campaign, Obama spoke often about the future of green energy in the United States and included nuclear power.
But after the Fukushima disaster in 2011, the administration quietly backed away from talking about nuclear energy.
It's important to note, though, that the Obama administration did, in fact, continue to support the development of nuclear energy after Fukushima. But they did it quietly.
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When Trump took office, he was vocal in his support of nuclear energy... although he was more vocal about other issues. And in 2017, Trump signed the Nuclear Energy Innovation Capabilities Act — which brings us full circle.
The Nuclear Energy Innovation Capabilities Act of 2017 specifies the development of the Department of Energy’s Versatile Fast Neutron Source, a.k.a. the Versatile Test Reactor.
Politicians on both sides seemingly want to support nuclear energy. But the Fukushima disaster still might be a bit fresh in people's minds to gain a lot of public support.
This may hold back the popularity of nuclear power for a few years and could continue to hold back development.
So while the DOE's Versatile Test Reactor looks to be a step in the right direction for the development of nuclear energy, I think it's really a non-event for uranium investors. At best, it draws a bit of attention to the sector.
Until next time,
As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bubble and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.
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