Just a few years ago, nuclear energy was considered a form of energy that seemed to have seen its best days. Numerous states had decided to decommission their existing nuclear power plants and opt for other energy sources instead of nuclear power. Germany was one of these countries. Today, it is the only industrialized nation still pursuing this path, as a shift in thinking has long since begun beyond its borders.
It is not only energy-hungry emerging and developing countries, such as India and China, that are increasingly relying on nuclear power and continuously expanding their capacities for generating nuclear electricity. A process of rethinking has also begun in Europe. While Germany has not yet embraced this shift, it does not alter the global trend clearly indicating a renaissance of nuclear energy.
While nuclear power was still considered too expensive, too risky, and too unpopular in the years immediately following the Fukushima disaster in 2011, today different priorities are being set, casting uranium and its civilian use in a completely new light. Consequently, nuclear power is once again regarded as a lifeline for national energy security in many countries. It is valued because it enables states to achieve their climate goals while simultaneously ensuring a high degree of geopolitical independence.
Nuclear Power’s Renaissance Outside Germany
Germany’s neighboring country, Belgium, for example, originally intended to completely phase out nuclear energy by 2025. This plan has since been abandoned, and the operating lives of the reactors have been extended by at least ten years. Poland, which has primarily relied on domestic coal for electricity generation until now, is also planning to use nuclear energy. Several large-scale projects are currently in planning. They are intended to help reduce dependence on coal and enable the achievement of EU emission targets.
Sweden has also abandoned its phase-out plans, and the Swedish parliament this year passed a new nuclear law that paves the way for re-entry into nuclear power and the use of modernized large reactors, as well as new smaller modular SMR new builds.
Italy could also take a similar path. Although the country voted against nuclear energy in a 1987 referendum and has been nuclear-free since then, Rome is already working on a re-entry. This is to be achieved by 2030, initially with smaller SMR reactors. Within the EU, Germany is thus the only country unwilling to give nuclear energy a second chance.
Increasing Electrification and New AI Applications
How long Germany intends to pursue this solitary path remains to be seen. According to the International Atomic Energy Agency (IAEA), 416 conventional nuclear power plants are currently in operation worldwide. They account for about ten percent of global electricity production, and each of these power plants typically has a capacity of one electrical gigawatt (GWe) or more.
Among the countries that rely particularly heavily on nuclear energy are France and the United States. Both are also among the states where awareness of the security of uranium supply is currently particularly pronounced. In the USA, the mistake was made in recent decades of allowing domestic uranium mines to languish. Production was no longer competitive after Fukushima due to massively falling uranium prices, and the large-scale development of new deposits was not even initiated.
For a long time, France relied primarily on its former colonies in West Africa for the supply of its numerous nuclear power plants. However, today, the old colonial power is no longer viewed as favorably there as it was a few years ago, and the governments in Mali, Senegal, and Niger now prefer to supply the uranium extracted in their countries to China and Russia rather than to France.
The Plight of Power Plant Operators is an Opportunity for Investors
Both developments have contributed to the supply of new uranium fuel rods to Western nuclear power plants being far less secure than at the beginning of the century. Alarmed by sanctions, export bans, and the war in Ukraine, a slow rethinking is only just beginning. Not only in the USA, but particularly there, significant funds are being invested at a breathtaking pace to develop new uranium deposits and secure the long-term supply of the country’s own nuclear reactors with the necessary fuel.
Two dangers necessitate urgency. The first danger lies in the limited nature of currently available uranium deposits. The amount of uranium contained in them is far too small to supply even the 416 nuclear power plants currently online with sufficient fuel in the long term. However, many more power plants are still in planning and under construction. They too will need to be supplied with uranium by the 2030s at the latest, and currently, no one really knows where it will come from. The failure to explore new deposits for years due to extremely low uranium prices is now taking a bitter toll.
Equally critical is the second danger: dependence on uranium supplies from Kazakhstan, Mali, Niger, or Russia is increasingly considered a risk. This must be avoided. This can only be achieved by reactivating decommissioned production sites in politically stable regions such as Canada, Australia, and the USA, and simultaneously vigorously advancing the exploration of new deposits.
However, the failures of the past and the resulting pressure on power plant operators and Western governments also present opportunities. These will be seized by investors who, without ideological blinkers, focus on those areas of the raw materials sector that will be characterized by massive supply-demand deficits for years to come. One does not have to like the uranium sector, but it is certainly one of them.
