Three Mile Island Nuclear Plant Restart Ignites Renewed Interest in Uranium Market

Recently, uranium spot prices have been fluctuating around $80 per pound, market interest has been relatively low. However, interest in the uranium market and stocks was rekindled after Constellation Energy (NASDAQ: CEG) announced plans to restart Unit 1 of the Three Mile Island nuclear power plant. Additionally, they signed a 20-year power purchase agreement with Microsoft (NASDAQ: MSFT).

Constellation plans to invest approximately $1.6 billion to bring the plant back online, aiming to start operations by 2028. According to the Energy Information Administration, nuclear power contributed about 18.6% of the total electricity produced in the U.S. last year.

This agreement responds to Microsoft’s growing energy needs, particularly for supporting data centers that power advanced technologies such as artificial intelligence and cloud computing. Like many large tech companies, Microsoft is increasingly investing in AI and has entered into a multi-billion dollar partnership with OpenAI, the developer of ChatGPT, earlier this year.

Nuclear energy is nearly carbon-free and more reliable compared to renewable sources like solar and wind, making it an attractive option for tech companies. These companies require uninterrupted power supplies while striving to reduce their carbon footprint. Microsoft’s Vice President, Bobby Hollis, stated that this deal is part of the company’s broader strategy to decarbonize the grid and fulfill its carbon-negative commitment.

The announcement about Three Mile Island positively impacted related stocks. Last week, shares of industry giant Cameco (TSX: CCO, NYSE: CCJ) rose by over 5%, Denison Mines (TSX: DML, NYSEAMERICAN: DNN) by more than 4%, and Uranium Energy Corporation (NYSEAMERICAN: UEC) by nearly 10%.

“As the energy demand for artificial intelligence continues to grow endlessly, the world is turning back to nuclear energy,” said Blaine Townsend, Director of Sustainable, Responsible, and Impact Investing at Bailard. “Its low emissions and virtually continuous power base load should make it part of the energy solution.” James Walker, CEO of Nano Nuclear Energy Inc. (NNE), which focuses on nuclear physics and reactor technology, also noted the unprecedented bright future for the nuclear industry driven by global clean energy transition demands and renewed public and private sector focus globally.

Related Stocks and Funds

Cameco Corp. (CCJ): The world’s second-largest uranium producer, with extensive nuclear fuel cycle investments.

Centrus Energy Corp. (LEU): The only U.S. company licensed to produce high-assay low-enriched uranium (HALEU).

NuScale Power Corp. (SMR): Focused on designing and commercializing small modular reactors, certified by the U.S. Nuclear Regulatory Commission.

VanEck Uranium and Nuclear ETF (NLR): Invests in uranium mining and nuclear energy companies, with an expense ratio of 0.61%.

Range Nuclear Renaissance Index ETF (NUKZ): Broadly invests across the nuclear supply chain, including advanced reactors, utilities, construction, services, and fuel-related companies. It is suitable for diversified investors, with an expense ratio of 0.85%.

The rise of environmentally friendly nuclear energy is reshaping the global energy market, and the restart of Three Mile Island marks a significant step in this trend.