For decades, nuclear power has been the largest source of clean energy in the US. In 2023, nuclear power accounted for 19% of total energy produced. Because nuclear is such a large sector in the US, it’s also a good source of jobs directly employing nearly 60,000 workers.
However, over the past 10-plus years, nuclear developments in the US have been few and far between.
In fact, the US only recently completed units 3 and 4 of the Vogtle nuclear power plant located in Georgia. And these were the first new reactors built in the US in over 30 years!
The good news for uranium investors is that nuclear power development in the US is about to enter the next phase…
The next phase of nuclear generation is about to kick off
On 29 May 2024, the Biden-Harris Administration hosted a White House Summit on “Domestic Nuclear Deployment”. It included several leading experts on nuclear and megaproject construction.
The goal of the summit is to drive reactor deployment in a timely and cost-effective manner. You see, building a nuclear power plant doesn’t take months…It can take years!
And usually, there are cost overruns and delays. So, it’s great that the US government is leaning on experts to make sure developments are built on time and in budget.
After all, the quicker new reactors come online, the quicker the US can achieve its goal of carbon free electricity by 2035.
Some of the actions the US will take…
• Restart and upgrade the Palisades nuclear plant in Michigan to produce clean, baseload power through at least 2050.
• Extend the life of the Diablo Canyon Nuclear Plant in California
• Extend the life of any other existing nuclear plants
The US will also deploy new nuclear technologies such as two Gen III+ Small Modular Reactor (SMR) demonstration projects…
And develop an action plan to convert 300 coal plants into nuclear plants…
There are also investments to secure critical uranium supplies. As I’ve mentioned in the past, supply of uranium is under threat.
And the recent Russian ban on uranium makes it even scarcer.
Interestingly, the US government isn’t the only one keen on new nuclear developments. The US Army wants to deploy SMR reactors and microreactors to protect its defence installations against physical attacks, cyberattacks, extreme weather, pandemic biothreats and any other threat that can disrupt energy networks.
In short, this a massive win for the nuclear industry and a massive win for uranium investors. It just reinforces that we’re still in the early innings of a uranium bull market and prices could reach $150 levels, as some uranium experts predict.
The opportunities to profit?
There are several different companies set to benefit from Biden’s nuclear blueprint…
1) Uranium miners such as Duke Energy, Exelon, Entergy, Vistra and Cameco…
2) Designer of SMR’s such as Brookfield Renewables, Cameco and NuScale
3) Component and fuel suppliers such as BWX technologies
4) Uranium enrichment such a Centrus Energy
A firm favourite that’s already in our South African Investor portfolio is, Centrus Energy. The company marked an incredible achievement this year…
For the first time in more than 70 years, Centrus produced (100kgs) high-assay low-enriched uranium or HALEU for short.
HALEU is a crucial material required by many advanced reactor designs.
Centrus’ future potential is massive and definitely a uranium play to keep an eye on.
Not a subscriber to Money Morning?
You can get free daily recommendations like these with Money Morning eletter. Just sign up here.
