Even under the International Atomic Energy Agency's most conservative projection, global nuclear power capacity will grow 26.8 percent by 2050. This assumes a complete shutdown of Japan's 50 reactors, which currently contribute 12.4 percent of global capacity.
The bull case, on the other hand, forecasts a tripling of nuclear output.
Projects underway in China, Turkey and the United Arab Emirates account for most of the projected new capacity. The biggest wildcard is the US.
Despite immense financial, legal and regulatory hurdles, four new reactors are currently under construction in the US, two in Georgia by Southern Company (NYSE: SO) and two in South Carolina by SCANA Corp (NYSE: SCG). Both use Toshiba Westinghouse's AP 1000 design and are being built on sites already housing plants.
Both projects enjoy the full support of state regulators, who are allowing the companies to recover some costs as incurred. Both have all needed permits from the US Nuclear Regulatory Commission (NYSE:NRC), and they're on budget as well as on track for startup in 2017-18.
They're also unlikely to be followed any time soon by other new plants.
One reason is the abundance of natural gas in North America, which currently undercuts on price every fuel source but big hydropower. In late August, Exelon Corp (NYSE: EXC)--by far the largest producer from nuclear in the US-withdrew its application with the NRC to build a plant in Texas, citing low gas prices. See Profit from the Shale Gas Revolution, for more on the impact that shale deposits are having on energy markets.
Another challenge is a ruling by the NRC under new Chairwoman Allison MacFarlane that could delay for up to two years licenses for new nuclear plants--and possibly re-licensing existing reactors--pending a full review of waste storage policy. That's in response to a recent decision by the US Court of Appeals for the District of Columbia.
The decision won't force the shutdown of any operating nuclear plants. That includes Entergy Corp's (NYSE: ETR) Indian Point station in New York, which can remain open until the NRC makes a definitive ruling.
It does, however, ensure natural gas will be the fuel of choice to generate power for some time to come. See How to Play the New, New Gas Story for more on how I'm playing this theme.
Disclosure: I am long SO, ETR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.