Nuclear power as an alternative 0 comments

(P.S: Sorry for any disturbances the advertisements above may have caused you)
Today is the 20th anniversary of the 1986 Chernobyl disaster which some argue caused the decline of the Soviet Union five years later, and after two decades in the wilderness as a result of this industrial accident whose fallout affected the whole of Europe, the rise of oil prices has brought about the rise of nuclear power as its most legitimate alternative.

It is ironic that nuclear power is seen today as one of the cleanest forms of energy around: non-greenhouse, non-smoke emitting. The concerns of accidental explosions are reduced with the advent of new fail-safe technology (pebblebed reactor); the main concerns are that of nuclear waste disposal (radioactive and danger of falling into wrong hands) and economics of construction/operation.

The second factor is rapidly being dissipated by the need to diversify out of oil. Natural gas is plentiful but its prices are often tied to oil. Coal is viable, but produces unacceptable pollution. Not just the West, but also countries like China, are committed to environmentally sustainable development. Other energy sources like fuel cells, hydroelectric, biomass (ethanol), solar are either work-in-progress (no critical mass) or substitute fossil fuels in other areas (transport fuels).

That several developed countries have trailblazed the path of using nuclear power as a major source of their energy needs provides a reliable track for other countries to follow. France relies on nuclear power for ~80% of its electricity needs, while amongst the world's top five economic powers, four use nuclear power to produce 20-30% of their electricity (there is still no substitute for transport fuels). The exception is China (2%). That is set to change, because the way that China has been setting about securing strategic oil and gas sources, the energy diversification path of the major powers cannot have failed to escape its attention. The plan is to increase nuclear power generation to 4% of national total in 15 years; considering China's rapid growth rate that amounts to a quadrupling of current nuclear power generation capacity, and entails a building program of nuclear plants probably equal to the rest of the world put together (from my reading of the statistics).

There is tremendous investment potential in this theme. The first sub-sector must be the uranium mines which would supply the raw material, in which two countries stand out: Australia’s share of the world's known uranium resources is about one third and it produces about 22% of the world's mined uranium; Canada's share of known world uranium resources is about 12%, but it produces about one third of the mined uranium.
The second sub-sector must be companies that provide construction services for nuclear power plants, for example Westinghouse Electric (recently acquired by Toshiba) which build these plants. If one is more imaginative he could look to the sub-contractors for these power plants, especially those with exposure to China since that is where growth potential is strongest in the future. There is some reason to suspect that Asia Water's price surge over these few months (and a 20% rise today alone) has something to do with the fact that they secured a water treatment contract for a nuclear power plant in late 2005.

References:
(1) Newsweek 6 Feb 06 article: Another Nuclear Dawn
(2) Uranium mining in Australia and Canada