Is This the Start of the Nuclear Renaissance?

Nuclear power has gotten a bad name, but there are signs that the industry could be ready to take off.

Mar 9, 2014 at 2:08PM

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:BWC) 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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Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Southern Company. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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