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After languishing in a bear market for a decade, uranium has staged an impressive comeback as Russia’s war on Ukraine exacerbated the global energy crisis and sent Europe scrambling to replace Russian oil and gas. Uranium prices have more than doubled over the past two years from $30 per pound in January 2021 to a high of $64, thanks in large part to nuclear power now being viewed as being indispensable in the global decarbonization drive. Right now, Uranium futures are trading at around $52 per pound, and it’s a unique setup that doesn’t necessarily rise and fall in tandem with other commodities.

“We will see increased investments in alternative energy and I think that nuclear is one of the best forms of green energy with no emissions, and currently nuclear accounts for just 10 percent of the world’s energy production,” Neena Mishra, director of ETF research with Zacks Investment Research in Chicago, has told Globe and Mail.

Countries feeling the worst of the energy crisis have been restarting mothballed nuclear plants or extending the life of existing ones. For instance, France has promised to restart all its nuclear reactors to avoid a power crunch during winter while Germany is seriously considering doing a u-turn on its nuclear phaseout. Germany decided to stop using atomic energy in 2011, with the last remaining plants set to be closed in the current year.

Meanwhile, China has revealed ambitious plans to build 150 nuclear reactors at a staggering cost of $440B over the next 15 years as the country looks to become carbon neutral by 2060.

That number of reactors is more than what the entire planet has built in the past 35 years, representing a third of the current global fleet of 440 reactors. China is the biggest emitter of greenhouse gasses, but says its nuclear program will play a critical role in replacing its 2,990-coal fired generators alongside wind and solar energy. Indeed, Beijing says its nuclear plans could prevent about 1.5 billion tons in annual carbon emissions, more than the annual emissions of the U.K., Germany, France and Spain combined.

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And, of course, it’s not just about carbon emissions. It never is. For China, nuclear energy is about cost efficiency.

About 70% of the cost of Chinese reactors are covered by loans from state-backed banks, meaning dramatically lower costs. In fact, Francois Morin, China director at the World Nuclear Association, says China can generate nuclear power at just $42 per megawatt-hour thanks to the low 1.4% interest rate on loans for infrastructure projects, making it far cheaper than coal and natural gas in many places.

At the high end of the spectrum, in developed economies, a 10% interest rate means the cost of nuclear power shoots up to $97 per megawatt-hour, more than double China’s tab but still cheaper than natural gas which is now trading around $210 per megawatt-hour. The World Nuclear Association estimates that China can build nuclear plants for about $2,500 to $3,000 per kilowatt, about one-third the cost of the latest nuclear projects in the U.S. and France.

Another bullish catalyst for uranium: strong market fundamentals. Annual consumption currently exceeds production while stockpiles of excess uranium are depleting.