U.S. stocks have had a rough start to 2024, with the S&P 500 still posting losses year-to-date in January, but the Global X Uranium ETF (URA) is up more than 10 per cent over the same time period, and the Sprott Uranium Miners ETF (URNM) is up more than 15 per cent. A U.S.-listed uranium miner, Uranium Energy (UEC), is up 25% year-to-date. It is true, the nuclear energy sector are soaring.
There’s no doubt that the world needs more energy. But in the global shift to clean energy, fossil fuels are no longer enough. Renewable energy sources such as solar and wind are costly and unreliable, especially now as the world struggles to avoid rising energy costs and disruptions. Unlike fossil fuels, nuclear reactors do not produce any direct carbon dioxide emissions or air pollution. Unlike renewable energy sources, nuclear energy is abundant and inexpensive. In addition, nuclear energy can be produced at any time of the day and in any weather conditions.
For a long time, nuclear energy was closely associated with the Chernobyl and Fukushima nuclear disasters, which is completely understandable. But in recent years, these concerns of investors have faded. Indeed, to this day, reactors are increasingly capable of controlling radioactive waste. Nuclear energy is now essentially the safest form of energy production in the world.
Statistically, for per terawatt-hour (TW/h) of coal power produced, 26 people die from accidents and air pollution. In the oil industry, for every terawatt-hour of electricity produced, 18 people die from related accidents and air pollution. But for nuclear power plants, only 0.03 people die from related accidents and air pollution in the process of generating one terawatt-hour of nuclear power.
So, as a super-clean, super-cheap, super-abundant, super-reliable, and super-safe alternative energy source, there’s no reason why nuclear energy shouldn’t be popular today in 2024. And governments around the world have already begun to take notice, turning to nuclear reactors and making nuclear energy the centrepiece of their future energy plans. The United States is leading the push to triple nuclear power generation capacity by 2050. The UK has just announced its biggest nuclear expansion programme in 70 years, quadrupling nuclear energy production. France recently introduced a new energy bill that prioritizes the further development of nuclear energy. Canada is building the world’s largest nuclear power plant in Ontario.
Most of the world’s uranium supply comes from Russia’s neighbour Kazakhstan. And as the West increasingly develops nuclear reactors, it is certain that uranium supplies from domestic sources will be considered first. Therefore, investing in domestic uranium miners is a wise decision. Moreover, the recent rapid development of artificial intelligence will help create sustainable, safe and powerful fusion reactors. And this is definitely a disruptive change for countries across the globe.
In 2024, searching for domestic uranium miners and fusion developers can be a good investment.
