Death of Uranium and Renaissance of Vanadium Batteries
by John Lee, CFA (https://twitter.com/johnlee25893955?lang=en)
I have owned shares of uranium mining companies in the past, anticipating the inevitable rebound of nuclear energy following the Fukushima nuclear plant accident.
However, through my recent research into the renewable energy sector and vanadium batteries, I became bearish on nuclear energy and sold my shares in Energy Fuel Inc. (TSX: EFR) and Fission Uranium Corp. (TSX: FCU) in February 2017.
Why? In this article, I will discuss:
1. The state of the big four nuclear power houses (Westinghouse, Toshiba, Areva and EDF), and the rising costs and long delays associated with nuclear power plant construction;
2. The case for uranium bulls;
3. The Nuclear Power Generating Capacity Growth Forecasts by 2030 issued by the International Atomic Energy Agency (IAEA) which, over the years, turned me into a uranium bear;
4. The rapidly decreasing cost of renewable energy and its deployment on a worldwide scale as the green energy of choice; and
5. The emergence of utility-scale batteries that improve the availability factor of wind and solar power to serve as base load energy.
1. The rising costs and long delays associated with nuclear power plant construction
I shall start by quoting a Financial Times article dated February 16, 2017 by Ed Crooks and Kana Inagaki, titled “Toshiba brought to its knees by two US nuclear plants”:
“Westinghouse, Toshiba’s US-based nuclear engineering subsidiary, is building at Vogtle two of its new AP1000 reactors, a “generation III plus” design that was intended to be the flagship of its expansion into markets around the world. Two more are being built about a hundred miles away in South Carolina at a plant called VC Summer….The projects are already more than three years behind schedule and, on a combined basis, more than $10bn over their original budgets. This week the timetable for the Summer project was pushed back again, and there were warnings that construction at Vogtle could also slip further.
Read rest of article here.
John Lee, CFA is an accredited investor with over 2 decades of investing experience in metals and mining equities. Mr. Lee is the Chairman of Prophecy Development Corp (www.prophecydev.com). John Lee is a Rice University graduate with degrees in economics and engineering.
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