Nuclear Energy Stocks

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>>> China is building half of the world’s new nuclear power despite inland plants pause


Global Energy Monitor

by Joe Bernardi and Ye Huang

August 2024


https://globalenergymonitor.org/report/china-is-building-half-of-the-worlds-new-nuclear-power-despite-inland-plants-pause/


China has expanded its nuclear power capacity at the fastest rate of any country in the 21st century, according to new data from Global Energy Monitor. Despite a moratorium on inland nuclear plants imposed after the Fukushima disaster, China is building enough capacity to overtake France within the next few years and hold the world’s second-largest nuclear fleet. Nearly half of the world’s nuclear power under construction is located in China. Its government has promoted nuclear power to shore up baseload capacity in the electricity sector and to help achieve its targets for carbon peaking before 2030 and carbon neutrality by 2060. But not all of the proposed buildout may come to fruition. Less than one-third of China’s planned nuclear capacity has begun construction, and China already has more cancelled nuclear capacity than any other country as a result of its pivot away from inland nuclear plants. By contrast, China has about two-thirds of the world’s utility-scale solar and wind power under construction, which, along with promising advancements in utility-scale battery technology, may reduce the need for continued additions of nuclear power.

China is approaching France in operational nuclear power capacity

China is emerging as a world leader in nuclear power, according to research from GEM’s Global Nuclear Power Tracker, which includes over 1,405 gigawatts (GW) of nuclear capacity from over 1,540 units worldwide. China’s total operational capacity of 58.1 GW is a close third behind France’s at 64.0 GW. Those two countries, plus the United States with its 102.5 GW in operation, account for well over half of the world’s operational nuclear capacity.

China surpasses France by count of operational nuclear power units, with 58 to France’s 56. (However, the difference may be negligible as two of the 58 units in China are very small power-generating reactors whose purpose is primarily experimental.) China has consistently ranked above France in annual electricity generation from nuclear sources for four consecutive years.

Comparing the nuclear power fleets of China, France, and the United States — the top three countries by nuclear generation in 2023 — helps illustrate the different roles that nuclear plays in these countries’ energy profiles. The United States generated 775 terawatt hours (TWh) from nuclear, accounting for just over 18% of its 4,249 TWh total power generation. France’s 336 TWh of generation from nuclear made up 65%, or just under two-thirds, of its 514 TWh total generation. But China’s 435 TWh of nuclear generation made up only 5% of its 9,462 TWh of total generation. (The global average is 9% of electricity from nuclear power.)

China is the largest generator of electricity in the world by far, with more than double the generation of the second-ranked country, the United States. So despite nuclear’s growth within China, its percentage share of generation is still much smaller than the corresponding global average, in large part because the “denominator” in the equation, total Chinese electricity demand, is so substantial. In addition, coal-fired power still accounts for well over half of all Chinese power generation.

The United States still leads the world by a sizable margin in terms of total operating nuclear capacity. While China’s nuclear power growth is perhaps the most notable among the world leaders in nuclear power, it is not alone in expanding capacity in recent decades. Several of the other top ten countries by operating nuclear power have added capacity in the last ten to fifteen years, including Russia, South Korea, and India.

China's prospective nuclear capacity ambitions

GEM data on prospective facilities — that is, announced, pre-construction, and under construction — indicate which countries intend to continue expanding nuclear power in the coming years. Although the United States currently leads all countries with 94 operational nuclear power units and a total capacity of 102 GW, China's ongoing construction progress is positioning it to shrink the U.S.-China difference over the next decade. China has 118 GW of prospective capacity, which puts the country not only first worldwide for this metric, but also surpasses the second through eighth place countries combined. India, the country with the second-largest prospective nuclear capacity, has a substantial 31.7 GW of prospective nuclear power, but China’s current plans call for additions of over four times that amount.

This growth reflects a targeted effort by the Chinese government to rapidly expand nuclear capacity. The 14th Five-Year Plan (2021-2025) aims to increase the size of the country’s total operational fleet to 70 GW by 2025. In each of the first three completed years of this plan, there have been between four and six nuclear units starting construction, and two to three units entering commercial operation. China had 50 GW of active capacity at the beginning of 2021, meaning that additions of 20 GW would be needed in five years’ time. Currently, it is a little under half of the way there, with 58.1 GW as of early Q3 2024.

China may fall just short of its goal. Currently, the expected start date data would translate to China having 63 GW online by the end of 2025. But 2026 would then see a further 8 GW added, putting China at 71 GW — not only above the 70 GW mark from the 14th Five Year Plan, but also overtaking France’s 66 GW for the second-largest nation by operating nuclear capacity.

China would need more than 100 GW of operational capacity to surpass the U.S. as the country with the largest nuclear power fleet. Some predictions have this happening as early as the end of the decade, but GEM data at the project level do not currently show this rapid of a change. GEM data only show start years for Chinese nuclear units through 2029, meaning that projections for 2030 or beyond are still indistinct. Only about 25% of China’s 118 GW of prospective capacity has a target start year, which would bring the country to a total of 88 GW in operation. Most of the rest of this prospective capacity represents facilities that are not yet under construction, having only been announced or entering pre-construction stages.

In a scenario where all prospective capacity enters operation, and assuming no retirements before that point, China would easily surpass the United States for the world’s largest operational nuclear fleet, 177 GW to 110 GW. Of course, not all prospective facilities will actualize, and real-world scenarios may include retirements or other temporary but prolonged shutdowns. But at face value, current GEM start year data would also suggest that no further additions to the Chinese nuclear fleet will occur after 2029, which should not be expected either.

Drivers for these changes include the Chinese government’s goals of meeting continued increases in energy demand while also decreasing reliance on coal, a key contributor to emissions and air pollution. The “Action Plan for Carbon Dioxide Peaking Before 2030,” a pivotal policy document, discusses these objectives and the overarching strategy to ensure that the country reaches peak carbon emissions before 2030 and achieves carbon neutrality by 2060. Nuclear is not the only power sector undergoing a Chinese buildout. As detailed in a recent GEM briefing, China is home to almost two-thirds of the world’s utility-scale solar and wind power under construction.

Although Chinese provincial governments are involved in site selection and local approvals, the central government ultimately plays a critical role in the strategic direction of China’s nuclear power program. It has had the effect of both promoting and restraining nuclear power development across different parts of the country. As discussed further below, the central government slowed the pace of overall Chinese nuclear capacity additions with a moratorium on new projects and tighter safety regulations that deprioritized new inland nuclear plants.

China's nuclear buildout shows a shift to a new generations and technological advancements

China is playing a significant role in the development and deployment of new technologies in nuclear power, specifically Generation III and Generation IV reactors. There are four generations of nuclear power plants, categorizations determined by the time of their development and by specific groupings of technological design. Generation II plants account for the majority of operational capacity worldwide. The nuclear fleets of the United States and France fit this pattern, with most of their reactors classified as Generation II. In addition, some Generation III reactors are operational in these and other countries. Generation III reactors generally have modifications on Generation II reactors, including additional safety design elements that are intended to reduce the need for active controls or operational intervention to prevent accidents in the event of a malfunction.

Like that of the United States and France, China’s operational nuclear fleet is still majority Generation II in terms of total capacities, but this balance is shifting as more Generation III reactors come online. In 2006, China initially announced plans for the AP1000 to serve a foundational role in its fleet — a Generation III reactor designed by the U.S.-based company Westinghouse. The AP1000 has since entered operation at four Chinese nuclear units, the first of which was Unit 1 of the Sanmen nuclear power plant in September 2018. However, China has since also designed and implemented its own Generation III reactors: One notable example is the HPR1000, also named the Hualong One. This design is operational at four Chinese nuclear units and under construction at an additional thirteen, with its increasing use promoted in the 14th Five-Year Plan. China is also deploying the Hualong One internationally, with two operational units in Pakistan and a prospective unit in Argentina. With this reactor design and others, China is not only aiming to meet more of its domestic nuclear energy needs with its own technology, but is also seeking to establish itself as a technological leader and supplier for the international nuclear power market.

China is also involved in advancing nuclear technology with Generation IV designs, the next evolutionary stage in reactor design. In December 2023, the world’s first Generation IV nuclear unit officially entered commercial operation at the Huaneng Shandong Shidao Bay nuclear power plant. Called the HTR-PM (High-Temperature Reactor Pebble-bed Module), it relies on two small reactors that drive one steam turbine with an overall output capacity of 211 MW. This capacity is less than one-fifth of the average capacity of currently operational Generation III reactors in China, which is around 1150 MW according to GEM data. As an example of a small modular reactor (SMR) — a classification often discussed as part of the future of the nuclear power industry — this reactor is designed with intentions of more flexible deployment and quicker construction. China has also proposed a scaled-up version of this design which would yield a larger nameplate capacity of 650 MW.

Frosty outlook: China's inland plant ice persists

As ambitious as China’s nuclear buildout has been and may continue to be, capacities would have been even higher if not for the indefinite suspension of all plans for inland nuclear power plant construction following the Fukushima nuclear accident in 2011. After Fukushima, the Chinese government imposed a moratorium on the approval process for inland nuclear power plants, and development has continued to stagnate for over a decade, prompted by concerns about safety and environmental impacts. Nuclear power plants need sufficient water sources for cooling purposes, and they discharge trace amounts of radioactive wastewater. Coastal nuclear power plants benefit from access to seawater for cooling, facilitating absorption of trace amounts of pollution by the ocean. But inland nuclear plants must rely on nearby rivers or lakes for cooling water, a fact which, alongside general safety reviews, has been cited as a central concern leading to the moratorium.

China’s 14th Five-Year Plan, covering the years 2021 to 2025, omitted any mention of inland nuclear power, instead emphasizing the deployment of nuclear facilities in coastal regions. GEM data corroborate the lack of construction or pre-construction activities at any inland Chinese nuclear power plants. The Global Nuclear Power Tracker reveals that China had 185 inland nuclear units cancelled. With a combined capacity of 201 GW, this cohort of cancelled Chinese units is larger than either the currently operational U.S. fleet (102 GW) or the total amount of nuclear capacity ever cancelled in the United States (172 GW). The Chinese units affected by the moratorium are shown with a GEM-assigned status of “cancelled - inferred 4 y” as consistent with GEM’s Methodology, because after their initial announcement, they fell out of more recent planning documents, and no progress has been observed for over four years.

However, the classification of “cancelled” for these plants carries some nuance. In the abstract, any of these facilities could re-enter official plans and progress forward to completion. While it appears extremely unlikely that all of them will do so, the idea of lifting the moratorium has been a subject of discussion in light of China’s ambitious goals of carbon peaking by 2030 and carbon neutrality by 2060. For example, the topic of initiating construction on inland nuclear power plants was proposed during the 14th Chinese People's Political Consultative Conference (CPPCC) National Committee First Session in spring 2023.

Among the projects affected by the moratorium, some may be more likely candidates to eventually move forward than others. The following three projects may have a relatively smoother pathway toward eventual construction and operation: the Taohuajiang nuclear power plant in Hunan province, the Xianning Dafan nuclear power plant in Hubei Province, and the Jiangxi Pengze nuclear power plant in Jiangxi province. These three had already commenced pre-construction preparations with initial investments.

Owners of cancelled inland nuclear projects were encouraged to preserve the site for energy generation purposes. For instance, Jiangxi Nuclear Power CO LTD, the owner of the Jiangxi Pengze facility, has used the site for developing wind and solar renewable energy projects. This approach has resulted in the commissioning of a solar farm in 2020 and a wind farm in 2021.

This situation also highlights some central questions regarding nuclear’s place in the energy transition, including how it compares to wind and solar in terms of nameplate capacity and risks for delays or cancellations. While the original project plans called for a total nuclear capacity of 4000 MW, less than 5% of that capacity is now operational via wind and solar facilities on the same site. But country-wide, the relationship is essentially inverted, as China has added significantly more wind and large utility-scale solar capacity than nuclear capacity. China’s currently operational nuclear capacity is only about 14% that of its wind capacity and 16% of its large utility-scale solar capacity, according to GEM data.

Nuclear has historically performed differently than wind and solar within the generation stack, serving a baseload role with a much higher capacity factor while wind and solar are intermittent. However, the roles of wind and solar are expected to shift with continued advancements in utility-scale battery technology. China’s once-envisioned inland nuclear fleet also underscores risks for nuclear power which are not nearly as prevalent for wind and solar: postponements and cancellations. GEM data show that China’s total cancelled nuclear capacity of 201 GW is more than 30 times that of its cancelled wind facilities, and more than 40 times that of its cancelled large-scale utility solar facilities. With China’s ambitious nuclear buildout ongoing, it will be important to continue to monitor the rate of cancellations compared to additions.

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Rickards - >>> Uranium Wars


By James Rickards

December 14, 2024


https://dailyreckoning.com/uranium-wars/


Uranium Wars

Uranium production is best understood as an industry played out on a geopolitical chessboard.

Enriched uranium is used to fuel nuclear reactors. The degree of enrichment is not high. Natural uranium (sometimes called yellowcake) has about 0.7% U-235 isotope. This is enriched to 3% to 5% for use in most reactors (called low-enriched uranium or LEU). Some specialized reactors require uranium enriched to 20% U-235 isotope, but those are rare.

Uranium is also used in nuclear weapons, especially fusion thermonuclear bombs. Those are enriched to a minimum of 20% U-235 and more often are enriched to 90% U-235 (highly enriched uranium, HEU) for the most powerful weapons.

Uranium itself is not rare, but its mining and production are controlled by only a few countries working with source countries. The real stranglehold on HEU is the enrichment process itself, which is highly technical and, again, controlled by a handful of countries.

Countries with large or expanding nuclear arsenals (U.S., Russia, China and North Korea) will do what they have to do to obtain HEU. They are not price sensitive, but they are not large drivers of the world price either. The main driver is the demand for LEU for use in nuclear reactors. The two leading builders of nuclear reactors, both for domestic use and for export, are Russia and France. (The U.S. has good nuclear reactor technology and building capacity, but it is highly constrained by regulations as part of the green new scam).

France’s yellowcake comes almost exclusively from Niger. Russia has diverse sources including Russia itself, Kazakhstan, Uzbekistan and now Ukraine. China gets uranium from inside China and Namibia and South Africa. India sources uranium from mainly inside India.

A recent coup d’état in Niger has thrown France’s supply situation into turmoil. There is no evidence yet that Russia planned the coup; it was most likely indigenous. When I traveled in West Africa and Central Africa in the early 1980s, I was accustomed to staying in hotels with artillery shells and machine gun bullet holes in the facades from the last coup.

Still, it is clear that Russia is fanning the flames among the revolutionary forces and helping to keep the coup forces alive. The U.S. and UK conducted a clandestine coup in Ukraine in 2014 that deposed a pro-Russian president. One can almost hear Putin saying to himself, “Two can play.”

Meanwhile, France failed in its efforts to organize a multilateral force around the Economic Community of West African States (ECOWAS). France proposed to supply well-trained French Foreign Legion and other special forces to the effort. U.S. efforts to intervene have also failed.

Russia’s reaction was to deploy Wagner Group mercenaries to support the coup. What is likely at this point is more chaos and at least a temporary cut-off of exports of uranium from Niger.

My first visit to the Niger capital of Niamey was memorable. It happened in 1981, over forty years ago. Niamey is completely surrounded by the Sahara Desert. It’s not near the desert; it’s in the desert. When it was built, it was more of an oasis on the Niger River but the Sahara is highly dynamic. It moves, sometimes hundreds of miles in any direction, creating more desert and even leaving green areas behind that become more fertile. Niamey was a place that was swallowed by the Sahara.

I was there as a senior officer of Citibank from the head office in New York checking in on the Niamey branch. (I covered francophone Africa at the time including Côte D’Ivoire, Senegal, and the Congo, formerly Zaire). My hotel room was interesting. The shower was a marked-off area of the bedroom with a drain and a small fringe to keep water from spreading. There was no shower curtain. The shower itself was a hose with a garden-type nozzle. It worked fine.

I looked out the window in the morning and saw something I had only seen in movies and never expected to see in real life – a caravan. It was a real one with camels tied together in a line laden with goods and camel drivers riding a few, and some herders walking alongside. They wore turbans and robes and were headed out into the desert. I’m not sure where they were going. Timbuktu is not far in case you’re in the neighborhood.

Finally, I made it to the office and sat across from the Chief Country Officer. Before we got down to business, I told the Chief I had a question.

“I understand what I’m doing here, but what are we doing here? Why on earth does Citibank have an office in such a primitive and deserted place?”

The Chief looked at me like I was the new kid on the block. (I was). He answered my question with one word: “Uranium.”

He went on, “We’re here to keep an eye on the uranium and keep an eye on the French. We use finance as needed as a tool to maintain economic control.”

At that time, it wasn’t unusual for the CIA to use bank and energy company officials as sources working under non-official cover. I quickly understood what I had walked into.

I suppose the hotels are nicer today and the caravans are mostly gone. What has not changed is the importance of uranium and the competition among the U.S., Russia and France for access. Now that the French presence has been ejected and the U.S. presence has been stymied, we’ll see how things play out.

More chaos and possibly war are next on the agenda. That creates its own uncertainties. What is certain is that Russia will be the winner. The chaos alone will result in a higher price for uranium. If Russia prevails, they will tighten their stranglehold on global supply and leave the French in desperate straits.

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>>> Iran plans new uranium-enrichment expansion, IAEA report says


Reuters

by Francois Murphy

11-29-24


https://www.msn.com/en-gb/news/world/exclusive-iran-plans-new-uranium-enrichment-expansion-iaea-report-says/ar-AA1uWEzc?ocid=TobArticle


VIENNA (Reuters) -Iran has informed the U.N. nuclear watchdog that it plans to install more than 6,000 extra uranium-enriching centrifuges at its enrichment plants and bring more of those already in place online, a confidential report by the watchdog said on Thursday.

The International Atomic Energy Agency report seen by Reuters details what Iran meant when it said it would add thousands of centrifuges in response to a resolution against it that the IAEA's 35-nation Board of Governors passed last week at the request of Britain, France, Germany and the United States.

More enrichment capacity means Iran can enrich uranium more quickly, potentially increasing the nuclear proliferation risk. Iran denies seeking nuclear weapons but Western powers say there is no civil explanation for enriching uranium to up to 60% purity, close to the roughly 90% that is weapons grade, which no other country has done without producing a nuclear bomb.

The only enrichment level specified for new centrifuges was 5% purity, far from the 60% Iran is already producing. The lower purity, particularly at its Fordow site, could be seen as a conciliatory move by Iran as it seeks common ground with European powers before the return of U.S. President-elect Donald Trump, though enrichment levels can be changed easily later.

Iran already has well over 10,000 centrifuges operating at two underground plants at Natanz and Fordow and an above-ground pilot plant at Natanz. The report outlined plans to install 32 more cascades, or clusters, of more than 160 machines each and a massive cascade of up to 1,152 advanced IR-6 machines.

At the same time, the number of cascades Iran plans to install vastly outnumbers those that are already installed and that Iran said it would now bring online by feeding them with uranium feedstock, which the IAEA verified it had yet to do.

"The Agency has determined and shared with Iran the changes required to the intensity of its inspection activities at FFEP (Fordow Fuel Enrichment Plant) following the commissioning of the cascades," the report said, referring to Iran's plan to bring eight recently installed IR-6 cascades there online.

Fordow is particularly closely watched because it is dug into a mountain and Iran is currently enriching to up to 60% there. The only other plant where it is doing that is the above-ground Pilot Fuel Enrichment Plant at Natanz.

REBUFFED

Just before last week's quarterly meeting of the IAEA board, Iran offered to cap its stock of uranium enriched to up to 60%, but diplomats said it was conditional on the board not passing a resolution against Iran.

Although the IAEA verified Iran was slowing enrichment at that highest level and called it "a concrete step in the right direction", the board passed the resolution regardless, repeating a call on Iran to improve cooperation with the IAEA.

Thursday's report said Iran had finished installing the last two cascades of IR-2m centrifuges in a batch of 18 at its vast underground Fuel Enrichment Plant at Natanz, and that it planned to bring all 18 online, though the IAEA verified on Nov. 26 that no uranium had been fed into them.

Iran also told the agency it intended to install 18 extra cascades of IR-4 centrifuges at that Natanz plant, each with 166 machines, the report said.

At the above-ground pilot plant at Natanz, Iran informed the IAEA it planned to take various steps that suggested it would increase the number of full, rather than small or intermediate, cascades there, which could produce more enriched uranium.

It also said it planned to install one cascade of up to 1,152 IR-6 centrifuges at that pilot plant, which could be the biggest cascade by far in Iran yet.

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>>> Constellation Energy, nuclear stocks plummet after regulators block Amazon power deal


Yahoo Finance

by Laura Bratton

November 4, 2024


https://finance.yahoo.com/news/constellation-energy-nuclear-stocks-plummet-after-regulators-block-amazon-power-deal-151109123.html


Constellation Energy stock (CEG) fell 12.5% Monday amid a broader decline in nuclear power stocks following the US government's rejection of another Big Tech nuclear power agreement late Friday.

The Federal Energy Regulatory Commission (FERC) rejected a proposal from a grid operator, PJM, to ramp up the amount of power supplied through the grid from Talen Energy (TLN) to an Amazon (AMZN) artificial intelligence data center. Talen said in a statement on Sunday it believes the FERC "erred" in its ruling, adding the company is "evaluating our options, with a focus on commercial solutions."

Talen Energy dropped 2.2%, while Sam Altman-backed Oklo (OKLO) fell 2.8%, Centrus Energy (LEU) tumbled 28.8%, NANO Nuclear (NNE) dropped 12.8%, Vistra (VST) sank 3.2%, and NuScale Power (SMR) fell 2.8%.

Even with Monday's drop, Constellation Energy stock is up more than 90% this year and is among the best-performing stocks in the S&P 500 (^GSPC).

Big Tech’s interest in nuclear energy has risen substantially as companies look to meet growing demand from power-hungry data centers to run generative artificial intelligence software without falling behind on their climate goals. Amazon, Google (GOOG), and Microsoft (MSFT) have all announced investments in nuclear power.

Constellation entered into a 20-year deal with Microsoft in late September to supply power to one of its AI data centers. The stock is up 36% from three months ago, as the Microsoft deal and Big Tech’s growing interest in nuclear power have sent shares soaring.

Constellation Energy also on Monday reported third quarter adjusted earnings per share of $2.74, ahead of Wall Street’s forecast of $2.65, according to Bloomberg consensus estimates. Its quarterly revenue of $6.6 billion also surpassed the $5.2 billion expected by analysts.

“The importance of AI and the data economy to America’s economic competitiveness and national security can’t be overstated, and Constellation will do our part to meet the moment,” Constellation CEO Joe Dominguez said in a statement Monday.

Still, red tape plagues the industry. Nuclear projects have been subject to stringent regulations in response to high-profile global nuclear meltdowns at Three Mile Island in 1979, Chernobyl in 1986, and Fukushima in 2011.

On average, it takes the US Nuclear Regulatory Commission 80 months to approve nuclear plant construction in the US, according to research cited by Canaccord Genuity.

The FERC said in its filing Friday that it rejected the Amazon nuclear power agreement due in part to concerns that it could threaten the reliability of the power grid and raise energy costs for the public.

Constellation’s deal with Microsoft, which would restart Three Mile Island for the first time following the meltdown, still requires approval from the NRC.

Bipartisan support, however, has mounted to reduce regulatory hurdles. The recently signed ADVANCE Act, for example, speeds up the permitting process for nuclear projects. Both US presidential candidates have signaled support for nuclear energy projects, though Republican nominee and former president Donald Trump recently expressed concerns over safety implications.

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>>> Big Tech is going all in on nuclear power as sustainability concerns around AI grow


Yahoo Finance

by Daniel Howley

October 26, 2024


https://finance.yahoo.com/news/big-tech-is-going-all-in-on-nuclear-power-as-sustainability-concerns-around-ai-grow-201418764.html


Artificial Intelligence has driven shares of tech companies like Microsoft (MSFT), Amazon (AMZN), Nvidia (NVDA), and Google (GOOG, GOOGL) to new highs this year. But the technology, which companies promise will revolutionize our lives, is driving something else just as high as stock prices: energy consumption.

AI data centers use huge amounts of power and could increase energy demand by as much as 20% over the next decade, according to a Department of Energy spokesperson. Pair that with the continued growth of the broader cloud computing market, and you’ve got an energy squeeze.

But Big Tech has also set ambitious sustainability goals focused on the use of low-carbon and zero-carbon sources to reduce its impact on climate change. While renewable energy like solar and wind are certainly part of that equation, tech companies need uninterruptible power sources. And for that, they’re leaning into nuclear power.

Tech giants aren’t just planning to hook into existing plants, either. They’re working with energy companies to bring mothballed facilities like Pennsylvania’s Three Mile Island back online and looking to build small modular reactors (SMRs) that take up less space than traditional plants and, the hope is, are cheaper to construct.

But there are still plenty of questions as to whether these investments in nuclear energy will ever pan out, not to mention how long it will take to build any new reactors.

A nuclear AI age

While solar and wind power projects provide clean energy, they still aren't the best option for continuous power. That, experts say, is where nuclear energy comes in.

“Nuclear energy is, effectively, carbon-free,” explained Ed Anderson, Gartner distinguished vice president and analyst. “So it becomes a pretty natural choice given they need the energy, and they need green energy. Nuclear [power] is a good option for that.”

The US currently generates the bulk of its electricity via natural gas plants that expel greenhouse gases. As of 2023, nuclear power produced slightly more electricity than coal, as well as solar power plants.

Last week, Google signed a deal to purchase power from Kairos Power’s small modular reactors, with Google saying the first reactor should be online by 2030, with plants expected to be deployed in regions to power Google’s data centers, though Kairos didn’t provide exact locations.

Amazon quickly followed by saying just two days later that it is investing in three companies — Energy Northwest, X-energy, and Dominion Energy — to develop SMRs. The plan is for Energy Northwest to build SMRs using technology from X-energy in Washington State and for Amazon and Dominion Energy to look at building an SMR near Dominion’s current North Anna Power Station in Virginia.

Last month, Microsoft entered into a 20-year power purchasing agreement with Constellation Energy, under which the company will source energy from one of Constellation's previously shuttered reactors at Three Mile Island by 2028.

Three Mile Island suffered a meltdown of its other reactor in 1979, but according to the Nuclear Regulatory Commission, there was no serious impact to nearby people, plants, or animals, as the plant itself kept much of the dangerous radiation from escaping.

In 2023, Microsoft announced it would source power from the Sam Altman-chaired nuclear fusion startup Helion by 2028. Altman also chairs the nuclear fission company Oklo, which plans to build a micro-reactor site in Idaho. Nuclear fusion is the long-sought process of combining atoms that produces power without dangerous nuclear waste. No commercial applications of such plants currently exist.

Microsoft founder Bill Gates has also founded and currently chairs TerraPower, a company working to develop an advanced nuclear plant at a site in Wyoming.

Nuclear is expensive and some technologies are still untested

Nuclear power output has remained stagnant for years. According to US Energy Information Administration press officer, Chris Higginbotham, nuclear power has contributed about 20% of US electricity generation since 1990.

Part of the reason has to do with the fear of meltdowns, like the one at Three Mile Island, as well as the meltdowns at Chernobyl in Ukraine in 1986 and the Fukushima Daiichi plant in Japan in 2011.

Chernobyl was the worst meltdown ever, spreading radioactive contamination across areas of Ukraine, the Russian Federation, and Belarus, resulting in thyroid cancer in thousands of children who drank milk that was contaminated with radioactive iodine, according to the Nuclear Regulatory Commission.

Plant workers and emergency personnel were also exposed to high levels of radiation at the scene. The Fukushima plant suffered multiple meltdowns as a result of a massive earthquake and subsequent tsunami, which caused significant damage to three of the plant's six reactors.

But according to the United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) as of 2021, “no adverse health effects among Fukushima residents have been documented that could be directly attributed to radiation exposure from the accident.”

Outside of the perception, nuclear plants are expensive and take time to construct.

Georgia Power’s two Vogtle reactors came online in 2023 and 2024, after years of delays and billions in cost overruns. The reactors, known as Unit 3 and Unit 4 were originally expected to be completed in 2017 and cost $14 billion, but the second reactor only started commercial operations in April this year. The final price tag for the work is estimated to top out at $31 billion, according to the Associated Press.

The explosion in cheap energy from natural gas has also made it difficult for nuclear plants to compete financially. Now nuclear companies are hoping SMRs will lead the way in building out new nuclear energy capacity. But don’t expect them to start popping up for a while.

“The SMR conversation is really long term,” Jefferies managing director and research analyst Paul Zimbardo told Yahoo Finance. “I'd say almost all of the projections are into the 2030s. The Amazons, the Googles, some of the standalone SMR developers, 2030 to 2035, which is also what some of the utilities are saying as well.”

What’s more, Zimbardo says, power generated by SMRs is expected to cost far more than traditional plants, not to mention wind and solar projects.

“Some of the projections are well above $100 a megawatt hour,” Zimbardo explained. “To put it in context, an existing nuclear plant has a cost profile of around $30 a megawatt hour. Building new wind, solar, depending on where you are in the country, can be as low as $30 a megawatt hour, or $60 to $80 a megawatt hour. So it's a very costly solution.”

Not everyone is buying the promise of SMRs, either. Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists, says the small-scale reactors are still an untested technology.

“Despite what one might think of all the brain power at these tech companies, I don't think they've done their due diligence,” Lyman told Yahoo Finance. “Or they're willing to entertain this as a kind of side show just so they have all their bases covered to deal with this postulated massive expansion and demand for data centers.”

Lyman also takes issue with the idea that SMRs will be able to get up and running quickly and begin providing reliable power around the clock at low cost.

“The historical development of nuclear power shows that it's a very exacting technology, and it requires time, requires effort, requires a lot of money and patience,” he said. “And so I think the nuclear industry has been trying to make itself look relevant, despite their recent failures to meet cost and timeliness targets.”

Still, with tech companies promising an AI revolution that requires power-hungry data centers, nuclear may be the only realistic green choice until solar and wind can take over permanently.

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