Seeking Alpha
Profile| Send Message|
( followers)

The much anticipated climate bill — expected to be unveiled this Monday — has been delayed, again.

But that doesn't take away from its content, or the impact it will have on energy investors...

In order to get the 60 votes needed for passage, the bill has taken on a bipartisan form. And that means investors of all stripes will find something they like.

Most notably, the bill calls for the construction of 12 new nuclear plants. With a cost of between $5 billion and $10 billion apiece, we could be looking at the creation of a $120 billion market with the stroke of a pen.

A Profit Chain Reaction

Back in February, the Obama administration approved an $8.3 billion loan guarantee to help Southern Co. (NYSE: SO) build two nuclear reactors in Georgia. They would be the first nuclear reactors built in the United States in three decades.

But the important part of that announcement never made headlines; that Westinghouse would be providing the reactors.

The company that will own the reactors is irrelevant. The action is in the companies providing the reactors.

Take a look at how Toshiba (OTCPK:TOSBF) — owner of Westinghouse — has been performing:

Toshiba Corp. (PINK SHEETS: TOSBF)

As a nuclear renaissance unfolds around the globe, orders for Westinghouse's AP1000 reactor have propelled Toshiba much higher. And we're still in the early stages of this revival. Ground hasn't even been broken in the U.S. for new plants yet. That means there's still time to get ahead of the nuclear profit chain reaction about to go down.

And I've dug up a list of pending applications, complete with the type of reactor to be used...

Company

Type of Reactor

Site/Units

NRG Energy (NYSE: NRG)

ABWR

South Texas (2 Units)

NuStart Energy

AP1000

Bellefonte (2 Units)

UNISTAR

EPR

Calvert Cliffs (1 Unit)

Dominion(NYSE: D)

ESBWR

North Anna (1 Unit)

Duke (NYSE: DUK)

AP1000

William Lee (2 Units)

Progress Energy (NYSE: PGN)

AP1000

Harris (2 Units)

NuStart Energy

ESBWR

Grand Gulf (1 Unit)

Southern (NYSE: SO)

AP1000

Vogtle (2 Units)

South Carolina Electric & Gas

AP1000

Summer (2 Units)

Progress Energy (NYSE: PGN)

AP1000

Levy County (2 Units)

Detroit Edison

ESBWR

Fermi (1 Unit)

Luminant Power

US-APWR

Comanche Peak (2 Units)

Entergy (NYSE: ETR)

ESBWR

River Bend (1 Unit)

Ameren (NYSE: AEE)

EPR

Callaway (1 Unit)

UNISTAR

EPR

Nine Mile Point (1 Unit)

PPL Generation (NYSE: PPL)

EPR

Bell Bend (1 Unit

Since the middle of 2007, 16 applications have been filed to build nuclear plants with a total of 24 units. All these applications have been approved.

Here's how those orders break down:

  • Westinghouse AP1000 - 12 Units

  • Areva EPR - 4 Units

  • GE (ESBWR & ABWR) - 6 Units

  • Mitsubishi Heavy Industry US-APWR - 2 Units

With two times more orders than its nearest competitor in the U.S., it's not surprising that Toshiba's share value has nearly doubled in the past year.

I'd still be buying at this level, given the amount of proposed reactors popping up all over the globe.

The Strong Silent Type

One major player isn't listed at all in the table above. The company is already providing reactors in other countries, and my research shows they'll soon be importing reactors to the U.S.

The company is Korea Electric Power (NYSE: KEP). This is the same firm that recently won an order worth $40 billion from the United Arab Emirates.

Under that contract, KEP will get $20 billion to build four reactors and obtain an additional $20 billion to operate them for 60 years.

The stock has been on a tear. And it's not finished yet:

Korea Electric Power (NYSE: <a href='http://seekingalpha.com/symbol/kep' title='Korea Electric Power Corporation'>KEP</a>)

I've got word that a tiny American firm will be importing their reactors in the next few years

Source: Expecting a Profit Chain Reaction From Nuclear Energy