US Government Funding/Support For Nuclear Energy
Video: New US nuclear funding and how to invest in the trend.
Transcript
Bipartisan nuclear energy support is on the rise across the globe, and particularly in the United States. We’re going to talk about some of the recent positive legislation coming out of the Biden administration, but first I wanted to highlight how public support for nuclear power is trending
In a recent National Nuclear Energy Public Opinion Survey… conducted by Bisconti and Quest Mindshare with 1000 US adults, 77% of respondents said they strongly or somewhat favored the usage of nuclear energy. Only 23% were opposed to nuclear.
Similarly, 71% of respondents were in favor of building new nuclear power plants in addition to the ones that are already operational.
This positive gap has grown especially wide in about the last four years, so the public is clearly ready for nuclear to make a comeback.
And so are the leaders of the United States. In COP 28, which is one of the largest climate change based conferences around the world, the US was one of the countries to pledge to triple nuclear power generation capacity by 2050.
And the question becomes, how are they going to do that? The nuclear sector has been largely abandoned for decades, and only just recently have we seen any new nuclear reactors built in the country.
And now is where we get into some more recent news events.
In May, the Biden administration signed a law prohibiting the importation of Russian uranium, and the start of a revival of the nuclear fuel industry in the US. To do this, the president is allocating 2.7 billion dollars to expand domestic enrichment and conversion capacity, crucial steps in the refinement process of uranium for eventual power generation.
The law is set to take effect on August 11th, 2024. And because it’s going to take time to restart and rebuild many of these processes, there will be exceptions for companies that can prove there’s no other viable source of uranium outside of Russia. But the important thing is the additional funding and financial incentives to start getting these industries working again domestically.
More recently, on June 17th, the DOE announced it would provide up to $900M in funds for the initial deployment of small modular reactors. Aka SMRs. This funding is coming from the bipartisan infrastructure law that congress passed previously.
$800M will go to one or two companies that are first movers in the space, ready to start the construction of new SMRs.
$100M will be allotted for addressing gaps in design, licensing, development and site preparation of these projects.
So the USA is now providing billions of dollars in government funding to restart every portion of the nuclear power generation process.
In addition, congress also just passed what is referred to as the ADVANCE Act with incredible bipartisan support, which was tasked with helping the US Nuclear Regulatory Commission find ways to reduce regulatory costs and speed up licensing efforts for nuclear technologies.
So the US is looking to streamline the process to ultimately develop new reactors and build them within the country.
It’s a good thing the United States is making this move because according to a report from the Information Technology & Innovation Foundation, an independent research institute, the US is 15 years behind China when it comes to rolling out new generation nuclear reactors. China currently has 27 nuclear reactors under construction, and they plan on building another 6 to 8 nuclear power plants per year…
In total, China is projected to build around 150 new nuclear reactors from 2020 to 2035 when China had announced their nuclear energy expansion.
So with the support of the public, the US government is ready to start making some progress in the sector. This could be a significant tailwind for companies developing new nuclear reactors, specifically the small modular reactor developers. Some of which are public companies.
SMR Companies
As an investor in public stock markets, we have three options to potentially take advantage of this trend. And keep in mind I am not endorsing and I don’t own any of these companies right now. I’m just presenting potential investment options to explore.
So we have NuScale Power, ticker SMR. They currently have a market cap of around $850M
Oklo, with the ticker OKLO has around a 1 billion market cap right now
And lastly, we have NANO Nuclear Energy, ticker NNE with a $400M market cap.
NuScale and Oklo are developers of small modular reactors, but neither of them have built their first reactor yet, so there is certainly risk involved in buying these companies. They’re early stage. But NANO is a little different because that company is developing microreactors, which are even smaller than SMRs.
SMRs are small, but still need to be stationary, while microreactors are actually small enough to be transported by truck. So that’s a difference to remember… but those are the three possible investments right now to gain exposure to the tailwinds these smaller reactor designs are seeing in the United States.