Nuclear Power Renaissance on the Horizon: UBS

Investing.com reports that UBS is observing a potential renaissance in the nuclear power sector.

For many years, nuclear energy was perceived as risky by investors, regulators, utility companies, and various stakeholders in the energy value chain. However, UBS analysts suggest that this view has significantly changed.

Nuclear power is increasingly being regarded as a key solution to the dual challenges of rising electricity demand and climate change. UBS points out that the future growth in electricity demand, along with the need to replace fossil fuel generation, can ideally be met with low-carbon energy solutions. Additionally, replacing reliance on fossil fuel imports enhances energy security, albeit with notable geopolitical concerns surrounding uranium supply chains.

In conjunction with discussions at COP28, the global aspiration to triple nuclear energy capacity by 2050 was highlighted as a significant, albeit symbolic, development.

Nuclear power is recognized as a reliable low-carbon energy source capable of generating substantial baseload electricity. UBS notes that 1GW of nuclear energy yields far more electricity than 1GW from other sources. While renewable energy is intermittent and requires substantial grid investment, nuclear remains a stable option with lower land usage requirements.

The Swiss bank identifies two potential catalysts that could hasten the development of nuclear energy: substantial, coordinated government support akin to what is currently observed in China and, possibly, the expansion of AI and data centers in conjunction with this support.

UBS envisions the addition of approximately 58-86 GW of nuclear capacity by 2030, with over half of these additions expected to come from China. To provide context, the entire operational nuclear fleet in France currently stands at around 61 GW.

Among the companies that may benefit from the increased focus on nuclear energy are CGN Power, CNNP, Constellation Energy, Korea Electric Power, IMI, Schneider Electric, Nuscale Power, Fluor, BHP Group, Spie, Rolls-Royce, and Centrica.