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Ignoring Germany's Nuclear U-Turn

Jun. 03, 2011 12:42 PM ETPALAF, CCJ, URPTF11 Comments
Lou Basenese profile picture
Lou Basenese

On Monday, Germany announced that it’s going to shut all its nuclear power plants by 2022. What a difference a year makes. Because only a year ago, the country announced plans to extend the life of its nuclear power plants.

So what’s up? According to German Chancellor Angela Merkel, “We want the electricity of the future to be safe, reliable and economically viable.” And in her mind, nuclear power doesn’t fit the bill anymore.

She’s wrong. The truth is, nuclear power is safe, reliable, clean and cheap. And that’s precisely why global nuclear capacity is going to keep increasing, by as much as 50% between now and 2020.

It’s also the reason why the long-term investment thesis for uranium stocks remains compelling.

Don’t Let Recent Events Mislead You

As humans, we have a tendency toward recency bias. In other words, we give recent events extra importance when making decisions. The recent radiation crisis in Japan is an example. I’m certainly not going to downplay the issue; the fallout from the earthquake and tsunami has been terrible and the loss of life is tragic.

However, believing that nuclear power is now suddenly unsafe is patently wrong. As the following chart shows, nuclear power is actually the safest form of energy production available. And if anything, the crisis at Japan’s 40-year-old Fukushima Daiichi plant is only going to increase the safety precautions at existing and new nuclear power plants.

Not only is nuclear power safest, it also happens to be extremely clean. Nuclear power generation produces virtually no greenhouse gases. It’s one of the most economical energy sources, too; it only costs about $0.04 per kilowatt hour (kWh) to produce electricity with nuclear power, compared to $0.08 per kWh for wind and more than $0.18 per kWh for solar.

Add it all

This article was written by

Lou Basenese profile picture
Founder of Disruptive Tech Research – a technology research and advisory firm serving the investment management community. We provide registered investment professionals and qualified firms with independent, targeted research to support the generation of investment ideas. We focus on patent-filing activity to identify the most promising disruptive technology trends early. Then, we employ an original, bottom-up fundamental research approach to uncover micro- and small-cap ideas that are underfollowed, underappreciated and undervalued. Our mission is to provide clients with differentiated, actionable and thorough fundamental research at a cost effective price. We’re 100% independent. That means absolutely no pay-to-play arrangements, no hidden agendas and no hype. Just solid research. And yes, we eat our own cooking.

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Comments (11)

24brooksj profile picture
A follow up to this very interesting article... I am going longer and longer into CCJ as its share price approaches $21.00, and am looking hard at starting a position in URA at current levels (between $10.00 and $11.00). Everything that I am reading points to a big shortfall in the supply of uranium (somewhere in the neighborhood of 57Mlb per year) starting in 2013 and beyond, with continuing growth despite Germany and Japan. Further, u308 is currently trading at $51.50/lb, with analyst forecasts that it should return to and stabilize above $70/lb.

Are you still bullish on uranium (and CCJ, in particular)? Any additional thoughts or insight?

Thanks for your time.
Check out "Liquid Flouride Thorium Reactors" - the future of energy?
Nicely put... I fully agree. There seems to be this over arching fear with nuclear energy because it is linked to nuclear bombs. A casing point to what you said is that fact that there will still be off shore drilling despite what happened in the gulf. This is because oil doesn't carry the inherent fear that nuclear does. We need to look at this with realistic economical logic, and not emotional fears.
SidSilver profile picture
Building a nuclear plant that will never have a disaster is like building a plane that will never crash. It can't be done.

We tolerate planes is because:
A. They are still much safer than other means of transport
B. A plane crash, when it happens, affects a limited number of people, not a whole region, and does not float in the air to other countries as nuclear does.

Both these reasons do not apply to nuclear plants (though the author will desperately try to argue that they do).

The author seems to be part of the nuclear lobby and if so, this whole article should be reported as abuse. The article is a promotional ad, not an editorial.
When a plane crashes it can affect a lot of people and even a whole country lifestyle like today in America.

The number of people and regions affected by nuclear accidents in more than 50 years of using nuclear energy, including all the old and less safe technologies is way lower than the number affected by accidents with other types of energy generation like coal, oil, wind and solar, the last two being used for much less time.

The consequences of a major accident at a big dam anywhere and the tsunami that would follow can be more devastating than any nuclear accident has been. So no dams neither?

Thousands have been killed by knives, cars, planes, the list goes on and on, however it makes no sense to "discontinue" those devices because they are very helpful if used properly.

And don't count Fukushima as a "nuclear" accident. The decision of building nuclear plants in areas subjected to natural disasters like earthquakes, tsunamis, tornados, hurricanes etc... is plainly stupid. It is like giving loaded guns for kids to play with. Don't blame the guns when someone dies.

And by the way, I don't belong to any kind of lobby.
This guy is a greedy nerd who cannot think for himself....Nukes are very expensive as you have to dig up the crap and repackage it every few hundred years for 100,000 years...stupidity..The Germans once again show us who is smart and who has brains,,The Germany economy is booming while americas economy sucks
jca0248 profile picture
Nuclear in not cheap, it is not safe, it is not reliable and it is not clean. If the nuclear power producers had to insure themselves for the risks they take, prices of nuclear generated electricity would go through the roof. If a plane crashes onto a nuclear power plant electrical system, the consequences would be worse than Fukushima. Since this is unacceptable, the event is not studied. Reliable, Three Mile Island, Chernobyl, Fukushima, all of them in high tech countries.... Clean, what about the waste, we still don't know what to do with it and we shall never know.

Like Angela Merkel (which by the way is the only stateswoman who knows what she is talking about), I am a nuclear physicist with more than 30 years experience in the field. Unfortunately, we have to wait for the next catastrophe to wake up and do something for real.
Ben Gee profile picture
What will Germany use to replace nuclear power plants?
SidSilver profile picture
Duh! Other means of power production: Coal, solar (they are keen on that), hydel, etc... Each has its advantages and disadvantages -- but then so does everything else in life.
Gazprom's natural gas at TRIPLE the price !!!
dieuwer profile picture
It seems people in the nuclear industry are getting more exited about Thorium as nuclear fuel instead of Uranium. Any thoughts about that?
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