Is This the Start of the Nuclear Renaissance?

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Large-scale disasters like Fukushima and Chernobyl have given the nuclear power industry an image problem. However, there are signs that key nations aren't giving up on nuclear with industry developments setting the stage for a potentially bright future.

The perfect example
Fukushima is the perfect example of nuclear's image problem. The reactors at this site were designed by General Electric (NYSE: GE  ) and put in place in the late sixties and early seventies. They've been running without major problems for around 40 years. However, like the airline industry, when something goes wrong at a nuclear plant it usually goes wrong in a big way.

Japan shut all of its reactors after the Fukushima meltdown to help ensure that nothing like this ever happens again. That, of course, is a good call, since it is better to be safe than sorry—especially when nuclear disasters are such large-scale events. However, GE is still working in the nuclear space and, well, it's learned a lot over the last 40 years.

(Source: US EPA)

A new partnership
For example, GE was involved in the first commercially funded nuclear plant. Today, it has design options that are three and four generations removed from that plant on the technology front. The most recent designs, PRISM reactors, actually use spent nuclear fuel to generate electricity. And it isn't the only one working on such fourth-generation technology.

For example, Babcock & Wilcox (NYSE: BWXT  ) has just teamed up with Bill Gates backed TerraPower on its "Generation IV traveling wave reactor (TWR)." That's a feather in Babcock & Wilcox's hat, and the TerraPower reactor just happens to use depleted uranium as a fuel, too.

(Source: World Economic Forum, via Wikimedia Commons)

Carbon is today's hot buzzword, but nuclear plants also help avoid all of the other pollutants that come from burning carbon-based fuels, too. And this commitment to helping Southern build the first nuclear plants in the U.S. in 30 years shows that, despite the disaster in Japan, the United States continues to see a role for nuclear. Energy Department Secretary Ernest Moniz noted the deal as a part of the government's efforts to "jump-start the U.S. nuclear power industry."

That technology, however, is the future -- so what about the present? Southern Company (NYSE: SO  ) just received $6.5 billion in government loan guarantees for, "the construction of two new nuclear reactors at the Alvin W. Vogtle Electric Generating Plant." According to The U.S. Department of Energy, "The nuclear facility is eligible for loan guarantees since it is expected to avoid nearly 10 million metric tons of carbon dioxide emissions annually."

Giving nuclear a second chance
Even Japan has decided it should revisit its total shutdown. For example, Grant Isaac, CFO of pure-play uranium miner Cameco (NYSE: CCJ  ) , noted late last year that "There are six utilities representing 16 reactors that are currently in the restart process" in Japan. Although no decisions have been made, it's highly likely that Japan will eventually go nuclear again.

As new technologies from the likes of GE, Babcock & Wilcox, and TerraPower continue to improve the safety and reliability of nuclear power, look for more support to build for nuclear. In the meantime, watch developing nations like China and India. While the U.S. is looking to "jump-start" its nuclear industry, Cameco expects there to be three times as many reactors operating in China in 2022 (59) as there were in 2013 (19). It projects that India will go from 21 reactors to 36.

(Source: U.S. Government Resource Committee)

That should make Cameco a good investment option for investors seeking nuclear exposure today. GE and Babcock & Wilcox are far more diversified, but a nuclear renaissance would boost this pair's long-term fortunes, as well. That's good news for Cameco and the entire nuclear industry.

Even better for the uranium miner, however, is that demand for uranium has outstripped mining output for years. The difference was made up by outside sources that are starting to go away. According to Cameco's Isaac that should help turn the uranium market from supply driven to demand driven—and boost prices.

Here's another trend that should help GE...
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Read/Post Comments (6) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 10, 2014, at 12:14 AM, Pallas89 wrote:

    There is no such thing as a nuclear renaissance. All fallout, including from Thorium reactors have 94 long lived daughter products, radionuclides of fission. There is no need for this. Nuclear not only does not replace petrol in any way, check out the energy and carbon footprint of bringing online and operating any nuclear power plant of any type, it produces waste that cannot be stored and must be cared for through time for not less than 250,000 years. Please see the documentary on the effects of one of 94 long lived radionuclides in fallout, this example Cesium-137..the documentary is easily found online, is 40 minutes long and is made by Pediatricians, "Chernobyl Heart".

  • Report this Comment On March 10, 2014, at 12:17 AM, Pallas89 wrote:

    General Electric created the Mark 1 design of Fukushima Dai Ichi and then helped load mixed oxide fuels (MOX fuels) in reactor four, which were loaded into the spent fuel pool of Fukushima Dai Ichi reactor 4 just the summer before the March 2011, Great East Japan Earthquake, which earthquake (not tsunami) caused the triple reactor core meltdown and explosions at Fukushima Dai Ichi.

    There are 23 Mark I nuclear reactors in the U.S., most are decrepitating and all should be immediately decommissioned. Remember that no nuclear power plant reactor will be covered by private insurance coverage. Why is that one might ask oneself.

  • Report this Comment On March 10, 2014, at 3:19 AM, Palwasha wrote:

    Yes, of course it is the start of nuclear renaissance. Japan who have suffered in Fukushima disaster have shown concern at the start but later on now it is again tilting itself towards nuclear power. It is estimated to be 31 states which have already been or still are eager to opt for nuclear power because it is a safe, clean and environment friendly mode of generating power. Its initial costs are high but operation is quite less than the energy produced by other alternate energy sources.

  • Report this Comment On March 13, 2014, at 10:42 AM, Modiin2008 wrote:

    Because of the latest developments in Crimean peninsula I believe no one would voluntary give up their nuclear status.

    And more nations, especially Eastern European would happy to adopt nuclear energy in order to secure themselves from energy disrupts.

  • Report this Comment On March 13, 2014, at 10:57 PM, fireofenergy1 wrote:

    The light water reactor is not perfectly safe because its coolant, water, will turn into hydrogen and explode if something goes wrong. It's wastes are almost completely "unburnt".

    In contrast, the high temp molten fuels (and MELTDOWN PROOF) designs need to be developed and deployed on the global scale.

    I ask the anti-nuke crowd the following: What is better, coal, renewables and NG... or load following perfectly safe closed cycle meltdown proof nuclear (and renewables)? Hint, coal kills people and animals EVERY year.

  • Report this Comment On March 13, 2014, at 11:03 PM, fireofenergy1 wrote:

    Think about this the next time you might want to bash advanced nuclear...

    The wastes from the closed cycle are basically radioactive free in 1,000ths the time of ordinary nuclear wastes which are still better than that from coal which LAST FOREVER and are on the order of a MILLION times the volume...

    Advanced nuclear's wastes are confinable (they MUST be isolated from the environment) but coal's wastes are not even close to being isolated (but they MUST be, also)!

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Reuben Brewer

Reuben Gregg Brewer believes dividends are a window into a company's soul. He tries to invest in good souls.

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