Published on October 15, 2021

When you hear the words “clean energy,” what comes to mind?

Most people immediately think of solar panels or wind turbines, but how many of you think of nuclear energy? Nuclear is often left out of the “clean energy” conversation despite it being the second-largest source of low-carbon electricity in the world behind hydropower.

So, just how clean and sustainable is nuclear?

  1. Nuclear energy protects air quality: Nuclear is a zero-emission clean energy source. It generates power through fission, which is the process of splitting uranium atoms to produce energy. The heat released by fission is used to create steam that spins a turbine to generate electricity without the harmful byproducts emitted by fossil fuels.
  2. Nuclear energy’s land footprint is small: Despite producing massive amounts of carbon-free power, nuclear energy produces more electricity on less land than any other clean-air source.
  3. Nuclear energy produces minimal waste: Nuclear fuel is extremely dense. It’s about 1 million times greater than that of other traditional energy sources and because of this, the amount of used nuclear fuel is not as large as you might think. All the used nuclear fuel produced by the U.S. nuclear energy industry over the last 60 years could fit on a football field at a depth of fewer than 10 yards!

Nuclear power is, in many ways, the most promising source of zero-carbon electricity. Unlike solar, wind, and water power, electricity from nuclear plants is predictable; generators run when the sun is not shining, the wind is not blowing, and water levels are low.

This is because nuclear energy is capable of providing what is called “baseload” power. The US Energy Information Administration defines baseload as “The minimum amount of electric power delivered or required over a given period of time at a steady rate.” While solar and wind power are desirable sources of power, they cannot be relied upon to be “steady” due to the unpredictability of weather. Other forms of energy are as reliable and predictable as nuclear power plants, such as coal and gas, but these are fossil fuels and emit carbon.

Life-cycle carbon emissions from selected electricity supply technologies

Future of Uranium and Nuclear Power Investments: Nuclear Provides Scalable Baseload Power

Source: Uranium Energy Corp

Yet, fossil fuels provide 63% of the world’s electricity. Nuclear accounts for roughly 10%, and renewables for the remaining 27%.

The industry has a dicey reputation.

The most prominent risks that come to mind when discussing nuclear power investments are the cost overruns in building plants, meltdowns of operating plants, and the unpopularity of nuclear plants.

  1. Cost overruns in building plants: Reuters reported that just two plants had cost overruns of $13 billion before sending their parent company, Westinghouse, into bankruptcy.

    Of course, Alternatives investors also see bankruptcy as an opportunity. Brookfield snapped up Westinghouse out of bankruptcy. But with the UN advocating for more nuclear power investments, this is a risk that will present itself to investors who will need to feel comfortable moving forward on new projects.

  2. Meltdowns of operating plants: The most visceral risk is meltdowns.
  3. Unpopularity of nuclear energy: Meltdowns also happen to lead to our third risk, which is really a political one, the unpopularity of nuclear energy.

One of the likely problems is a misunderstanding of risks. Humans are constantly exposed to radiation — from the sun, from the cosmos, from the very ground we walk on. Even the most fearsome and publicized nuclear reactor accidents have added relatively little to background levels.

These risks should now also be placed in the context of climate change. Fossil fuels in power generation must end, and the stable and continuous operation of nuclear power plants is a useful complement to the varying output of renewable sources such as wind and solar.

On the UN’s website, there is a list of 17 Sustainable Development Goals.

Goal 7 is to “Ensure access to affordable, reliable, sustainable and modern energy.”

Goal 13 is to “Take urgent action to combat climate change and its impacts.”

The UN includes the word urgent because “Carbon dioxide (CO2) levels and other greenhouse gases in the atmosphere rose to new records in 2019.”

Taking action on climate while seeking access to affordable, sustainable, and reliable energy does not have to be at odds with each other. And according to the UN, one of the necessary ways that we can achieve these goals for sustainable energy is through the use of nuclear power plants.

Office of Nuclear Energy, March 2021. “3 Reasons Why Nuclear is Clean and Sustainable.”
The Washington Post, September 2021. “To solve the carbon crisis, we need to talk nuclear power.”
USEIA, October 2021.
The Conversation, October 2021. “How nuclear energy can help make all UK electricity green by 2035.”
Our World in Data, February 2020. “What are the safest and cleanest sources of energy?”
Wired, April 2016. “Nuclear Power Is Too Safe to Save the World From Climate Change.”
Reuters, May 2017. “How two cutting edge U.S. nuclear projects bankrupted Westinghouse.”
Reuters, January 2018. “Brookfield Business Partners to buy Westinghouse for $4.6 billion.”
United Nations. Sustainable Development Goals
United Nations. Sustainable Development Goals

Houston, We Have a Problem: Why are Nuclear Power Investments Lagging in the US?

The Gallup Poll pictured below shows that 73% and 66% of Americans in the most recent survey think the US energy production needs to increase the use of Solar and Wind Power, with only 39% of Americans stating that nuclear uptake should increase.

Future of Uranium and Nuclear Power Investments: US Gallup Poll

Source: Gallup, March 2021. Polls

But experts believe that many different sources of energy will be needed to support future generations, which includes nuclear energy. In fact, the UN Economic Commission for Europe (“UNECE”), published an article in August 2021 stating that “International climate objectives will not be met if nuclear power is excluded.”

So why is nuclear energy lagging in the US? There are likely many reasons that can be polarizing in America, but the results show that nuclear power has not grown its share of the energy mix since 1991. New York retired a nuclear plant early in April of this year and California is scheduled to shut down its Diablo Canyon plant within the next five years.

Journalist and author Michael Shellenberger has been writing about the issues associated with shutting down clean nuclear power plants for years. In 2018, he wrote about how, while Sun and Wind power are capable of intermittently providing power, consistent power generation when it is needed most means that these green sources of energy need to be supplemented by more predictable energy sources. The problem is nuclear power plants cannot be flipped back on like a light switch. Making matters worse, dirty forms of energy like coal are easier to flip on and off, meaning that eliminating nuclear power means burning more fossil fuels. This is not speculation. German media outlet DW reported:

“In the first half of 2021, coal shot up as the biggest contributor to Germany's electric grid, while wind power dropped to its lowest level since 2018. Officials say the weather is partly to blame.”

Gallup, March 2021. Polls.
United Nations Economic Commission for Europe, August 2021. “International Climate objectives will not be met if nuclear power is excluded, according to UNECE report.”
Nuclear Energy Institute, May 2021. “US Nuclear Generating Statistics.”
Energy Information Agency, April 2021. “New York’s Indian Point nuclear power plant closes after 59 years of operation.”
LA Times, January 2018. “Regulators vote to shut down Diablo Canyon, California’s last nuclear power plant.”
Forbes, June 2018. “With Pollution On The Rise, Will Europe Resist Germany's Dirty War On Nuclear Power?”
Clean Energy Wire, August 2021. “Nuclear exit to bring Germany “enormous difficulties” by increasing fossil power use - EDF head.”
DW, September 2021. “Germany: Coal tops wind as primary electricity source.”

Regions Stepping Up Nuclear Power Investments

An increased uptake of nuclear energy could go a long way towards helping economies around the globe carve a path to affordable, clean, and reliable energy systems. While the powerhouse nation of Germany and some of the largest states in America are seemingly taking steps backward in increasing their use of nuclear power as an energy source, the good news is that this trend has reportedly slowed.

Luckily, there are some regions of the United States where the lives of nuclear power plants are being extended. Illinois and Florida are both examples of regions taking action to keep nuclear plants as a part of their energy mixes.

Another example is Wyoming, which is due to introduce a new modular reactor in the State. This could be a big step forward for nuclear power in the US because, if successfully implemented, modular reactors can be mass-produced rather than constructed on a case-by-case basis as has historically been done in the US.

While in Japan, a candidate for Prime Minister said nuclear power was needed for the archipelago to reach its climate goals.

Bloomberg reports, “Japan has been slow to restart nuclear reactors shuttered in the aftermath of the 2011 Fukushima meltdowns.”

The aforementioned Fukushima meltdowns were a result of a tsunami that caused damage to the nuclear power plant.

The World Nuclear Association notes that “[t]here have been no deaths or cases of radiation sickness from the nuclear accident.”

From the same article referenced above, Bloomberg writes, “Utilities immediately benefit from restarting idled nuclear reactors, as it boosts profits by lowering imports of more expensive fossil fuels.”

Bloomberg also noted that restarting reactors is more economic than purchasing more fossil fuels.

Utility Dive, December 2019. “FPL's Turkey Point first US nuclear plant to get license out to 80 years.”
Bloomberg, September 2021. “Japan Utility Stocks Jump After PM Candidate Backs Nuclear Power.”
World Nuclear Association, April 2021. “Fukushima Daiichi Accident.”
World Nuclear Association, September 2021. “Plans For New Reactors Worldwide.”
Associated Press, June 2021. “Bill Gates company to build reactor at Wyoming coal plant.”

A Brutal Bear Market for Uranium

The Fukushima disaster was the beginning of a brutal downturn in the price of uranium.

Japan has been slow to restart nuclear reactors shuttered in the aftermath of the 2011 Fukushima meltdowns. Most of its 33 operable reactors remain offline as widespread local opposition to atomic energy has made it challenging.

Future of Uranium and Nuclear Power Investments: Uranium Prices Over Time

Source: Visual Capitalist, September 2021. “The future of uranium: A story of supply and demand.”

These conditions led to the price of uranium to trade below replacement cost. Due to the cost of uranium trading below the cost to produce, Cameco, a leading uranium miner, disclosed in its Q1 filings “we are actively purchasing material on the spot market to meet our sales commitments.”

In other words, uranium was trading so cheaply Cameco thought it better to utilize cash to obtain uranium in order to meet their contracted commitments rather than mining. This is an extraordinary set of circumstances.

The imbalance in the market formed after the Fukushima disruption. As can be seen in the chart above, uranium prices were starting to move higher in 2010, but continuously drifted lower starting in 2011.

Sources:, October 2019. “Uranium Price Trades Below Cost of Production.”
Cameco, Q1 2021. “Management’s discussion and analysis for the quarter ended March 31, 2021.”
Visual Capitalist, September 2021. “The future of uranium: A story of supply and demand.”

Surging Energy Prices Shine a Light on the Increasing Use of Nuclear Energy

Across the world energy markets are in disarray. In Europe, natural gas prices are surging, with Bloomberg headlines calling it a “Crisis-Led Rally.”

MarketWatch quotes a commodities strategist who states the reason for skyrocketing natural gas prices in Europe is coal shortages in Asia.

Meanwhile, the chart below shows US gas prices recently hit their highest level since 2014 and are still far below all-time highs.

Generic 1st ‘NG’ Future

Future of Uranium and Nuclear Power Investments: US Gas Prices

Source: Bloomberg, October 2021

Uranium prices have spiked recently as well. But there is a critical difference between uranium and other sources of baseload energy such as coal and gas. Uranium as a percent of the cost to run a reactor is extremely low. This is partially due to the sophistication of nuclear power plants. Coal and natural gas have lower capital investment and thus the fuels are a higher percent cost towards the end product, energy.

World Nuclear Association, March 2020. “Economics of Nuclear Power.”
Bloomberg. September 2021. “European Energy Prices Pare Record Gains in Crisis-Led Rally.”
MarketWatch, September 2021. “The surge in European gas prices is tied to the Asian shortfall in coal supply, strategist says.”

An Emerging Bull Market in Uranium?

When you add all the pieces together there is a compelling narrative for a bull market in uranium. This has not even taken into account the fact that ESG investing is exploding, which in theory would lower the cost of capital for greener industries. ESG funds now command $2.3 trillion of assets and have seen positive inflows for five consecutive quarters.

Future of Uranium and Nuclear Power Investments: ESG Funds’ Asset Size

Source: Reuters, July 2021. “Global sustainable fund assets hit record $2.3 tln in Q2, says Morningstar.”

Industry players state that there is more demand at current levels than new supply, meaning inventory needs to be drawn down to feed nuclear reactors today.

Govind Bhutada of the Visual Capitalist writes, “In addition, low prices have also blocked new supplies from entering the market. Around 46% of the world’s identified uranium resources, 8 million tonnes, have an extraction cost higher than $59 per lb. However, uranium prices have hovered close to $30 per lb since 2011, making these resources uneconomic.

As a result, the supply of uranium has been tightening, and in 2020, mine production of uranium covered only 74% of global reactor requirements.”

Visual Capitalist, September 22, 2021. “The future of uranium: A story of supply and demand.”
BNN Bloomberg, September 2021. “As Uranium Soars, Top Trust Sees Hedge Funds Fueling Demand Lift.”
Bloomberg, September 2021. “Uranium Giant in talks to supply sprott as investor demand soars.”


Taking action on Climate Change and supplying clean, reliable, and affordable energy are two of the UN’s main sustainability goals. And according to the UN, nuclear energy is a part of those goals.

According to Industry experts, nuclear energy provides the cleanest and most reliable baseload energy.

Despite the fact that some regions have not moved quickly towards adopting nuclear energy, places like Japan, Wyoming, Illinois, and Florida, among others, are deciding to either increase or maintain their reliance on nuclear energy into the future.

While it is encouraging for the UN’s climate goals that numerous regions recognize the importance of nuclear energy going forward, the UNECE still felt compelled to iterate this importance in August 2021.

The uranium price has languished since Fukushima caused Japan to shut down its entire nuclear energy in 2011. So much so that miners in the market were purchasing the commodity rather than extracting it in order to meet their contractual agreements with utilities. But as research shows the increasing need for nuclear power to help provide sustainable energy to the world, a potential bull market for uranium may be emerging.

Still, there are risks to nuclear power investments. Cost overruns, plant meltdowns, and public sentiment shifts have all occurred within recent memory.

Nevertheless, it seems that nuclear will be a necessary global energy source in order to reach UN climate goals.

Source: World Nuclear News, September 2021. “Investment funds change the shape of uranium market.”

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