Why I'm Long Uranium and Nuclear / Power Engineering

Macroeconomic themes play an essential role in my investment decisions. Global warming, whether you believe it or not, will play an increasing role in economics/politics in the coming decades.

In an article authored by Robertson Morrow of Clarium Capital Management, Morrow explains how there can be bull and bear markets in politics as well as financial markets.

For most of the past 25 years, the West generally, and the United States particularly, experienced a surprisingly apolitical interlude. The great perturbations of armed conflict, trade disputes, sweeping social reforms, petro-diplomacy, and their ilk were largely absent. For investors, this meant politics became a much less important variable in the economic calculus of interest rates, innovation, global integration, and so forth. But the apolitical climate of the recent past, at least in the US, is giving way to a much more politicized future, with profound implications for a wide range of asset classes. One way to help understand the shift is to conceive of bull and bear markets in politics. In bear markets, like that which recently prevailed in the West, ordinary life is mostly unaffected by politics; the lives of the economy and citizens progress without substantial overt interference by government. By contrast, in a political bull market, government influence–over trade policy, social programs, decisions of war and peace–becomes much more important. The US now finds itself shifting from a bear market in politics to a bull market.

It seems that the current bull market in politics has focal points around three fundamental areas: global warming, healthcare, and the economic system. This article is primarily interested in the topic of global warming.

Let me cut to the chase. Current policy prospects for solving global warming stand just about a zero percent chance of solving global warming. Let me rephrase that in case it didn’t come off clearly….it doesn’t stand a snowball’s chance in hell of solving global warming. This is for a whole host of reasons. But nobody in office is particularly interested in the science or economics behind tackling this issue. However, they do care about votes and let’s face it, taxing the refining industry into bankruptcy has significant short term political benefits for every liberal democrat taking advantage of people who Bill Maher would refer to as “stupid people.” (I am not so sure he should be excluded from this group when it comes to the topic of energy policy and global warming.)

In my opinion, the only economically feasible solution that stands any shot of tackling the global warming issue is nuclear power. No global warming policy should be taken seriously unless it includes significant outlays for nuclear energy. Yes it has tremendous up front costs, but it is the lowest marginal cost provider of energy with the lowest emissions. Quite frankly nothing else comes close to nuclear power with any sort of scale.

Here is how I see it playing out...

The current bull market in politics will keep on pace subsidizing corn ethanol production in an effort to earn the Iowa caucus votes and the subsequent political benefits regardless of the fact that this policy offers zero positives to society but it does provide tremendous costs for the world. Solar and other alternatives will once again re-emerge as an investment fad. Much like the tech bubble, these companies might soar up in value as the craze hits. This craze will end much like the tech bubble ended. Investors will unfortunately find out that most of these alternative energy companies are not profitable and not even economically feasible with enough scale to warrant support, thus it will end in tears. They will go bankrupt but not before billions in IPO’s and political payoffs to lobbyist groups and politicians in which everyone i.e. Al Gore make millions and millions of dollars promoting bad policy to gain votes in addition to personal financial wealth.

When this collapse occurs, nuclear will finally emerge as the “duh” solution to solving global warming while expanding power capacity, thereby maintaining economic growth, for the world as well as the United States. At this point, the newly made millionaire policy makers will finally switch to some decent policy and will expand nuclear power plants in the United States.

In an interesting research report by Salida Capital Management the long term thesis for investing in uranium is explored.

Demand Side:

All uranium consumed today goes into electricity generation, much of it for base load capacity. Consequently, we should expect uranium demand to be utility–like in nature and only modestly impacted by economic weakness. At the same time, growth will be driven not only by global power needs, but also by market share gains, as expansion of nuclear should lead an industry increasingly focused on emissions control. Nuclear power is also competitive economically — high capital costs (2–3 times as high as coal–fired and 5–6 times as high as gas–fired) are offset by low ongoing fuel, operating, and maintenance costs. According to the Nuclear Energy Institute in the U.S. (2007 figures), an average cost of US$1.76/kWh for nuclear power compares to US$2.47/kWh for coal–fired and US$6.78/kWh for gas–fired. Importantly, unlike the alternatives, nuclear plants are fairly insensitive to feedstock pricing, as the cost of uranium accounts for less than 10% of the cost of producing electricity. Globally there are 436 reactors in operation today, annually consuming some 168 million lbs. of uranium to produce 16% of the world’s electricity. A further 151 new reactors are either under construction or planned, plus 266 more units proposed. Adding only those being built or planned would yield a dramatic 35% increase in the number of plants worldwide. If we simplistically assume the average new reactor consumes as much fuel as those currently operating, the industry must source an additional 59 million lbs. of uranium per year on an ongoing basis — and likely within the next decade. This represents a staggering 55% increase in mine output from today’s levels. Moreover, the startup of a new reactor causes a surge in demand as initial cores typically require 2–3 times annual requirements during the ramp–up phase.

In the Western world, nuclear is gaining support as a source of green power. In the U.S., a recent Gallup Poll showed a record 59% of respondents were either somewhat or strongly in favor of nuclear power. The stimulus package passed earlier this year includes $18.5 billion in loan guarantees to help fund five new reactors. These would be America’s first new nuclear power plants in the past 30 years.

Supply Side:

Despite a spike in uranium pricing in 2004–07, mine production grew only 13.5 million lbs. during the ten–year period to 2007 — a mere 1.4% annually. This reflects the industry’s challenges in both expanding existing operations and starting up new mines— challenges spanning geological, economic, operational, and regulatory. Today, the industry faces the additional challenge of funding.

Global mine output is about 107 million lbs. annually, far less than demand of some 168 million lbs., with the shortfall coming from secondary supplies (primarily government inventories). While the remaining life of these inventories is difficult to ascertain, they are a finite and diminishing resource. One of the key secondary sources is the U.S.–Russian HEU (Highly Enriched Uranium) Agreement, under which the U.S. buys Russian material recovered from dismantled nuclear warheads. Although the program expires in 2013, industry observers do expect sales to continue (albeit at higher prices). Even if the relationship ends, the Russian uranium should still enter the global market through sales to either other countries or to domestic plants. The bulk of future mine supply growth depends on three key regions: Kazakhstan, Saskatchewan, and Australia — each of which faces real challenges…

Price Side:

Meanwhile, today’s uranium price provides limited incentive to explore for and develop new mines, while existing operations and known deposits face a myriad of challenges. The marginal cash cost for the uranium industry is believed to be in the US$45–$50/lb range, higher than today’s spot price. Adding in a reasonable return on investment suggests a minimum US$60–$65/lb contract price to justify investment in a typical new project. Given that reactors are far more concerned with security of supply than the actual price of uranium, there would seem to be little resistance to higher prices should market conditions tighten.

The relevant stocks of interest for this theme:

Cameco Corporation (CCJ) is a Canada-based company. The Company, along with its subsidiaries, is engaged in the exploration, development, mining, refining, conversion and fabrication of uranium for sale as fuel for generating electricity in nuclear power reactors in Canada and other countries.

ABB Ltd (ABB) is a global provider of power and automation technologies to utility and industry customers. The Company’s focus on power transmission, distribution and power-plant automation serves electric, gas and water utilities, as well as industrial and commercial customers.

Disclosure: Author is not long either CCJ or ABB at the current time; however forsees a purchase in the not too distant future.Author remains long PCU, FCX, VALE, NUE, PSEC, & ETV and Short calls on most of these stocks.

Comments

[epeon:]

Your analysis is way too simple. First, the majority of existing power plants were built in the 70s and early 80s with 30 to 40 year old licenses. Under current law, they are supposed to be shutdown over the next decade. So, if new plants are built, it just means that they would replace existing plants.

Secondly, in the US there are no real plants under construction. Rather, you have plants that have a permit to be designed. This is a big difference. They are going for permits to construct but that is four to five years away if they are successful.

Thirdly, your analysis only works if current plants get an extension on their current life (possible, some have gotten that in the past and some have not) and the plants being designed are actually converted into construction. But, construction is five years away and having one built is, at least, four years after that (assuming some judge doesn't issue an injunction as they have in the past).

My bottomline, Uranium is way too early now.

Aug 17 12:30 PM

[1jforrest:]

I'm sure your referring to the U.S. The rest of the world is moving forward. China has increased it buying of Uranium by 10% and has 10 power plants unders construction. India is doing the same. Many other countries are moving forward also. If the U.S. doesn't snap out of its "Political Correctness" mode, they'll be able to add one more item to their "We Screwed Up List"


On Aug 17 12:30 PM epeon wrote:

> Your analysis is way too simple. First, the majority of existing
> power plants were built in the 70s and early 80s with 30 to 40 year
> old licenses. Under current law, they are supposed to be shutdown
> over the next decade. So, if new plants are built, it just means
> that they would replace existing plants.
>
> Secondly, in the US there are no real plants under construction.
> Rather, you have plants that have a permit to be designed. This is
> a big difference. They are going for permits to construct but that
> is four to five years away if they are successful.
>
> Thirdly, your analysis only works if current plants get an extension
> on their current life (possible, some have gotten that in the past
> and some have not) and the plants being designed are actually converted
> into construction. But, construction is five years away and having
> one built is, at least, four years after that (assuming some judge
> doesn't issue an injunction as they have in the past).
>
> My bottomline, Uranium is way too early now.

Aug 17 01:30 PM

[Daniel Moser:]

First off, I can't write a book online...so each post has to be a reasonable size. Secondly nothing you have said is particularly crucial to my underlying thesis being correct: which is that nuclear will eventually become the "duh" solution to solving global warming while keeping costs relatively cheap. Right now the environmentalist lobby is not rationally allowing policy makers (particularly left wing policy makers) the ability to pursue nuclear as the viable option hence your points about nuclear capacity actually declining...however that will change as it becomes abundently clear that there is no other currently viable option to produce energy at a reasonable cost that simultaneously helps reduce global climate change. Third, the rest of the world waking up/expanding nuclear (as the other commentor points out) will still lead to an increase in demand for uranium - which in and of itself promotes uranium prices and simultaneously puts the United States at a competitive disadvantage which will ultimately have to be corrected by some decent policy (we hope so anyways).

My bottomline, my analysis works it is just a matter of timing. You incorrectly focus on the present situation in which nuclear is not seen (as it should be) as the viable option - which actually feeds my argument that in the future this will change after a serious "alternative energy bubble" that mis-allocates capital to the incorrect resources-which will end in tears for most investors playing bad solar companies and what not. Good luck and I geniunly appreciate the feedback.

Aug 17 01:59 PM

[EDYF:]

Epeon:

The present "nuclear rennaisance" is not really about events taking place in the nuclear industry in the U.S. at all. In fact, the growth drivers are coming predominantly from Asia, particularly China and India.

At least on third of the new reactors that will be added over the next 20 years will be constructed in Asia. In Cameco's public press conference last week, they revealed that China now constituted 50% of current uranium spot purchases. With the nuclear treaty now almost complete, India has also announced similarly lofty targets. Unlike the U.S., China possesses the financial capacity to pay for these reactors and has already laid out hard cash for its first batch of 8 new reactor builds (@$8 bill. a pop). So these are not pie-in-the-sky projections. It's happening now and it's happening fast. As well, China is starting to make investments upstream through the supply chain to include even exploring for uranium in Canada (see CanAlaska Uranium).

All of this should not come as a big surprise to those who understand the strategic nature of nuclear power in the global energy balance. Neither China or India possess a secure global link to oil and gas and neither country wishes to fall under the U.S./Arab or Russian-controlled spheres of strategic influence as to these commodities (unlike Japan and Korea, for instance). Hence, nuclear power offers a viable alternative to attain national energy security to support their continued economic growth and expansion . When viewed in these macro terms, the potential for "alpha" in this industry is enormous. The trick for the investor is to make suitable investments into emerging companies in an industry that has such a small public investment footprint.

Aug 17 02:18 PM

[fran:]

expand your thinking to the worldwide situation; get the USA out of prominance in your mind. also, remember, like oil, uranium is somewhat fungible in the commodity market.


On Aug 17 12:30 PM epeon wrote:

> Your analysis is way too simple. First, the majority of existing
> power plants were built in the 70s and early 80s with 30 to 40 year
> old licenses. Under current law, they are supposed to be shutdown
> over the next decade. So, if new plants are built, it just means
> that they would replace existing plants.
>
> Secondly, in the US there are no real plants under construction.
> Rather, you have plants that have a permit to be designed. This is
> a big difference. They are going for permits to construct but that
> is four to five years away if they are successful.
>
> Thirdly, your analysis only works if current plants get an extension
> on their current life (possible, some have gotten that in the past
> and some have not) and the plants being designed are actually converted
> into construction. But, construction is five years away and having
> one built is, at least, four years after that (assuming some judge
> doesn't issue an injunction as they have in the past).
>
> My bottomline, Uranium is way too early now.

Aug 17 08:08 PM

[Mad Hedge F...:]

vbn. There is absolutely no way we can deal with our energy crunch without a huge expansion of our nuclear capacity, which sits at a lowly 20% of our power generation. France has already achieved this, getting 85% of its electric power from nuclear, followed by Sweden at 60%, and Belgium at 54%. Unless you’re a nuclear engineer, you are probably unaware that the technology has moved ahead four generations. The first one produced the aging behemoths we now see on coasts and rivers, which used high grade fuel that would melt down if someone forgot to flip a switch. Generations two, three, and four never got off the drawing board. Generation five is not your father’s nuclear power plant, relying on a new form of fuel embedded in graphite tennis balls that is just strong enough to generate electricity, but too weak to risk a disaster. This eliminates the need for four foot thick reinforced concrete containment structures, which accounted for 50% of the old design’s cost. Low grade waste can be stored on site, not shipped to Nevada or France. The permitting process is being shortened from 15 years to four by confining new construction to existing facilities instead of green fields, urged on by a less fearful public and even some CO2 conscious environmentalists. At least 30 new reactors are expected to start construction in the US over the next five years, and over 90 in China. There has got to be an equity play here. The Market Vectors Nuclear Energy ETF (NLR), which has jumped an impressive 78% to $25 since March, is the easiest way in. You can also buy its largest components, like Cameco (CCJ), the world’s largest uranium producer, or Électricté de France (EDF SA) which has the monopoly in France and is developing a major export business.

Aug 18 12:52 AM

[bigeasy8:]

What about the notion of peak uranium? I've read that there is only a small amount of additional mineable uranium which limits how many nuclear plants that can be built around the world. Anyone care to comment on this question?

Aug 18 03:35 AM

[Amvet:]

Moser, After reading your right-wing political rantings, I have no interest in your equally skewed nuclear opinions. Amvet

Aug 18 06:58 AM

[jerrydd:]

I agree Moser is biased by his political views as little he says makes sense.

First he says correctly that nukes cost 3-6x's as much as other fossil fueled plants do, then tries to say they are lower cost.

His statement that China is paying $8B/nuke means even overseas they pay way too much.

Nor does he mention every nuke in the last 20 yrs was over budget by 50-100% including the French recent plants which are suppose to be inexpensive because they are standardized!!

The facts are NG and RE in most cases are far cheaper than nuke, coal, both to build and run. His bias against RE show just how out of touch he is. Competitive now are solar CSP, wind, kinetic hydro river and tidal, geo thermal now beat coal and beat nuke by several times.

The canards of being not steady production, expensive, not viable, can't put out the power needed are easily engineered around or just not true.

Nor does he mention the rapid rise in fossil and nuke fuel's cost
both of which are going up with a bullet.

I doubt new hot water nukes will be built or at most just a few. The only reason they are being bid here in Fla is our great gov is forcing the utility customers pay for the building of them with 30% rate increases for 10 yrs before they produce any power. For the same money you could get 3-6x's the CSP, wind, tidal units here and they would start producing power this yr and paid off in 5 yrs or less!!

His only good point is nuke fuel could be a good investment as it is rising in price. But anyone investing in nuke builders are in for large losses.

Aug 18 07:41 AM

[Rick Krementz:]

The author makes a comment: "Quite frankly nothing else comes close to nuclear power with any sort of scale."

Sorry, you are totally out of touch. Certainly there are some fads, like retro-fitted rooftop PV solar that do not make sense. There are several technologies that each can realistically supply 100% of the US electrical demand:

Thermal solar: 10,000 square miles of the Southwest (owned by the Federal government) can readily produce 100% electrical demand. Thermal has tremendous energy enertia, and can provide baseload power, even at night.

Ocean thermal energy conversion: utilizing the difference in water temperature from the surface to the bottom. The energy can be transported via NH3 synthesis, and used as motor fuel as well as boiler fuel for shoreside power plants

High altitude wind: Kites can fly at 20,000+ feet and run int he jetstream. The area above a traditional nuclear reactor (1000 acres) can produce several gigawatts of power, 24/7.

Dry geothermal: In the western half of the country deep geothermal resources can provide baseload power.

Offshore wind: floating wind turbines can produce huge amounts of power. With NH3 (ammonia) production, the power can be used as transportation fuel or transmitted to the grid as electricity.

The point is that EACH of these renewable sources could supply 100% of the US electrical demand. I have not run the numbers yet for other parts of the world.

Should nuclear be part of the solution? Absolutely. But don't be ignorant of other technologies that have the potential to be game changing.

Aug 18 08:56 AM

[Alan Young:]

Good comments above.

The author brings so much political baggage into the analysis that there is no credibility to any of his conclusions.

Aug 18 09:07 AM

[Random Number:]

Well, the "research report by Salida Capital Management" is interesting, but everything else is just hot air.

Aug 18 09:08 AM

[seahawk:]

I think he was talking PRICE! Let's get back to reality.


On Aug 18 08:56 AM ricardoRI wrote:

> The author makes a comment: "Quite frankly nothing else comes close
> to nuclear power with any sort of scale."
>
> Sorry, you are totally out of touch. Certainly there are some fads,
> like retro-fitted rooftop PV solar that do not make sense. There
> are several technologies that each can realistically supply 100%
> of the US electrical demand:
>
> Thermal solar: 10,000 square miles of the Southwest (owned by the
> Federal government) can readily produce 100% electrical demand. Thermal
> has tremendous energy enertia, and can provide baseload power, even
> at night.
>
> Ocean thermal energy conversion: utilizing the difference in water
> temperature from the surface to the bottom. The energy can be transported
> via NH3 synthesis, and used as motor fuel as well as boiler fuel
> for shoreside power plants
>
> High altitude wind: Kites can fly at 20,000+ feet and run int he
> jetstream. The area above a traditional nuclear reactor (1000 acres)
> can produce several gigawatts of power, 24/7.
>
> Dry geothermal: In the western half of the country deep geothermal
> resources can provide baseload power.
>
> Offshore wind: floating wind turbines can produce huge amounts of
> power. With NH3 (ammonia) production, the power can be used as transportation
> fuel or transmitted to the grid as electricity.
>
> The point is that EACH of these renewable sources could supply 100%
> of the US electrical demand. I have not run the numbers yet for
> other parts of the world.
>
> Should nuclear be part of the solution? Absolutely. But don't be
> ignorant of other technologies that have the potential to be game
> changing.

Aug 18 09:15 AM

[Daniel Moser:]

On the cost front, you might read the piece again...the upfront costs of nuclear are substantially higher, however the MARGINAL COST is remarkably lower. Which is to say once the nuclear plants are built, they are by far cheaper than everything but hydro (as far as I know).

Next, the vast majority of alternative forms of energy have extremely low scalability. I am not saying that wind, solar, etc are bad ideas in all cases. I am just suggesting that in the scheme of things, these technologies will not solve the problem without leading to a severe energy shortage in the U.S. and quite frankly the world.

In terms of generating capacity in the U.S., Wind Power makes up about 1%, Solar makes much less than 1%, Geothermal makes up well less than 1%, Hydroelectric makes up about 9%. So....lets just say for argument sake it is not exactly feasible to dam up every river accross the United States (of course I could be wrong, but nonetheless). If you quadrouple each of the other forms of renewable resources you are still under 10% of generating capacity. My point is that is that these forms of alternative energy are not a viable option to handle a major transition away from our reliance on "dirty" power without creating a major power shortfall.

Third point, on a marginal basis....natural gas is not cheaper than nuclear power. That point is 100% inaccurate. Hence, nuclear power is used as a "base load" power which means they switch those puppies on ramp 'em up to 90% (or whatever normal operating capacity is) and rarely switch them off. Nat Gas is most typically used for what is referred to as peak power...which is to say when demand suddenly gets ramped up (in the busy mornings for instance) the prices for power typically lead to Nat Gas turbines kicking on to take advantage...but when the peaking power demand subsides the Nat Gas turbines are turned off because the economics suggest to stop producing power.

Lastly, on my political views...I wouldn't consider offering up nuclear as the viable option to handle global warming while expanding power capacity in the U.S., and the rest of the world, a bias right wing rant. To be entirely honest, I have no idea if the "right wing" even supports nuclear power as an alternative. My initial thoughts would be that they probably do not given the artificial security risks with terrorists. So, I am not exactly sure which group I should attribute my political bias to.

In my opinion good policy is good policy and bad policy is bad policy whether it comes from the left or the right. I am sorry to let you in on this little secret...but corn based ethonal is not economic and on top of the poor economics it doesn't even help the environment. In fact, the only thing corn based ethonal does...is burn food. Food that could be used to feed the hungry (hardly a lunatic right wing position, wouldn't you say). I also apologize that other alternatives are not currently feasible or scalable to effectively tackle global warming at the current time (that doesn't mean they won't ever be). Clean coal technology at the present time doesn't exist. Someday maybe the technology will be there and it will be the save all solution but currently it doesn't exist.

So, while I don't personally think I am unfairly presenting a portion of the bullish case for nuclear power, I guess not respecting Bill Maher's opinion on any issue that is remotely important is a crazy right wing view. Heaven forbid being skeptical of a comedian's political view. I guess that does incorporate way to much independent thought for the likes of some.

Aug 18 09:34 AM

[jerrydd:]

Dan,
Home size wind generators are now being sold for $1k/kw.

Home CSP can be made once in mass production for under $3k/kw and supplies a large amount of heat as a bonus. And since it's basically a solar powered steam/heat engine can be fired by any other fuel or the heat stored for generation when the sun doesn't shine so making it a peaking plant, far more valuable that nuke that you have to give about 1/2 it's power away at night from no demand.

Plus solar happens at peak power needs usually so far better than nuke at 1/4 the price. Vs Nuke is coming in at $12-20k/kw.

Facts are probably 50% of homes, building could make their own power very profitably on just a small part of their property, just 1/4 of the roof area in most cases. Payback is in 2-4 yrs on wind, CSP and almost free for 50 yrs after. In 3 yrs a nuke plant isn't even started.

RE is the low cost energy source of the future because the fuel is free, stabilizing energy costs. How is nukes going to beat that?

PS Fla has large uranium deposits in it's phosphate reserves few know about. Once the price comes up a little more they will extract it. As Russian nuke fuel stockpiles have been used up, nuke fuel is about to go much higher.

Aug 18 10:08 AM

[Road Runner:]

I second bigeasy8's question about "peak uranium". Are we going to reach "peak uranium" in the next 50 years or not? I heard that if the world went fully ahead with nuclear power that there would only be about 30 years of Uranium left in the world. Is this accurate?

Aug 18 11:01 AM

[EDYF:]

The concept of "peak uranium" has only come into play because uranium exploration was non-existent from the mid-80's to 2005, when the price of the mineral recovered sufficiently to justify further exploitation.

The world's largest-richest uranium deposits are found in the Athabasca Basin in Saskatchewan, Canada, where 25% of the world's urainum is presently mined. In the last exploration cycle, which took place between the mid-70's to the mid-80's, there were several big discoveries that have now become producing mines. The expectation is that many more uranium mines will be found in this very rich basin, which remains tremendously under-explored and can be compared to the Saudi Arabian Oil Basin in strategic importance. The grade of ore mined in the Athabasca Basin is 10-%-25%, which compares with dwarfs the ).05%-0.5% grades of other uranium mines worldwide by several orders of magnitude.

There will obviously be a time lag between the time new discoveries take place to when these uranium deposits start producing. Hence, there will be a peak, but not a permanent one. As, unlike oil, the discovery potential for uranium remains vast.


On Aug 18 11:01 AM Road Runner wrote:

> I second bigeasy8's question about "peak uranium". Are we going to
> reach "peak uranium" in the next 50 years or not? I heard that if
> the world went fully ahead with nuclear power that there would only
> be about 30 years of Uranium left in the world. Is this accurate?

Aug 18 01:31 PM

[Road Runner:]

Thanks EDYF for the informative response.

Aug 18 02:10 PM

[Road Runner:]

Seems to me that if a friendly country like Canada has such good reserves of Uranium, that the US should be pursuing some growth in nuclear power.

I don't want to see a huge push for nuclear because of the huge upfront cost (about $10 billion per plant) and large lead time (about 10 years) for nuclear power. Though, new types of nuclear reactors in development may change these numbers which would be very positive for the industry.

Some places with a very high population density and poor profile for solar, like the Northeast US, should pursue nuclear at a modest rate. I would not want to see a utility be aggressive in developing nuclear because the high up-front cost and long lead time could lead to another financial crisis like the Bonneville Power debacle of 1983.

Also, in places where the solar profile is very good, like the Southwest, there is the potential for a disruptive drop electricity generating requirements due to solar. In 10 years, solar will be at or below grid cost, without government subsidies, for the Southwest. Battery technology will also be such by then that solar could be used for base load. Solar will become popular not from government sponsorship, which almost always leads to slow development, but at the “grass roots” by individuals and businesses adding solar for economic reasons.

I’m not saying solar will replace everything in a short period. It will take decades to make a large impact. I’m just saying that aggressive pursuit of nuclear in the Southwest could lead to a financial crisis for utilities and/or governments.

Aug 18 02:45 PM

[William Taylor:]

UNOFF, Unor corporation. That is all I have to say.

Aug 18 07:45 PM

[Kashyap_Swamy:]

I guess this means that investors have plenty of time to buy nuclear stocks. Until politicans are obsessed with solar energy, biofuels - clearly stocks like Cameco will languish. In the meantime, buy the solar and biofuel stocks!! :-)
I'm only half-joking here. Stock performance will depend on where the money is in the credible near future rather than a possible faraway scenario.

Aug 21 04:09 AM