Chernobyl Disaster Ruins Nuclear Reputation
The Chernobyl nuclear disaster occurred in Northern Ukraine in the late 1980s. While conducting tests and simulations, a design flaw led to a substantial power surge. As engineers tried to shut down the nuclear reactor, explosions began, resulting in a nuclear accident that led to the evacuation of nearly 50,000 people, several deaths, and thousands of health complications (The WHO estimates the incident resulted in ~9,000 cancer-related fatalities). Recently, Hollywood and Netflix (NFLX) have leveraged the disaster and created the “Chernobyl” television series. After growing steadily for three decades (from 1960-1990), U.S. nuclear capacity has stagnated.
Image Source: U.S. Energy Information Agency
Is Nuclear Energy Safe and Affordable?
“I want to be super clear. You should not only not shut down the nuclear power plants, but you should also reopen the ones that have already shut down.” ~ Elon Musk
Clearly, the nuclear energy industry unjustly has been marred by its negative reputation. Nevertheless, nuclear power is among the safest and most affordable energy sources. The truth is that all forms of energy have led to deaths in one way or another. For instance, in the late 1930s, a natural gas leak at a school in New London, Texas, led to the tragic deaths of more than 300 students and teachers. Compared to coal, nuclear power results in 99.9% fewer deaths. From a cost perspective, nuclear power plants have high upfront costs, but once they are built, are very cheap to run.
Below are five reasons nuclear is the next big wave in the energy sector:
1. Data Center Demand to Drive Energy Demand
Earnings growth in Nvidia (NVDA) and other artificial intelligence (AI) companies have proven that data center growth will soar. Power consumption from these energy-sucking fortresses is expected to result in a double-digit compound annual growth rate (CAGR) of ~10% until 2030.
Image Source: Yesenergy.com
2. Nuclear Funding Secured
Banking juggernauts, including Bank of America (BAC), Citi (C), and Morgan Stanley (MS) pledged on Monday to support the goal of tripling nuclear power.
3. Growing Political Support
Earlier this week, Constellation Energy (CEG) signed a 20-year mega-deal with Microsoft (MSFT) to provide nuclear power for its data centers. While most Republicans have been pro-nuclear, Democrats have been more hesitant to support it due to environmental concerns. However, Josh Shapiro, one of the most popular Democratic politicians, and the governor of the swing state of Pennsylvania, said the deal should be “fast-tracked.”
4. Electric Grid Issues
From Georgia to Arizona to Texas, utility companies are struggling to keep up with soaring electricity demand – and that’s before the AI buildout. Nuclear is the only way the U.S. power grid can catch up to where it needs to be.
5. Nuclear Energy is Clean Energy
Nuclear energy does not impact air quality, has a small footprint, and produces very little waste.
Nuclear and Utility Stock Watchlist
Investors should watch nuclear and utility companies like Vistra (VST), Exelon Corporation (EXC), and Cameco (CCJ). Finally, investors who want diversification may opt for the Global Uranium ETF (URA).
Bottom Line
Nuclear energy is arguably the cleanest and most affordable energy source. Despite suffering a reputational hit, there are several signs that nuclear will power the next global energy revolution.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>Bank of America Corporation (BAC) : Free Stock Analysis Report
Morgan Stanley (MS) : Free Stock Analysis Report
Citigroup Inc. (C) : Free Stock Analysis Report
Exelon Corporation (EXC) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Constellation Energy Corporation (CEG) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Cameco Corporation (CCJ) : Free Stock Analysis Report
Global X Uranium ETF (URA): ETF Research Reports
Vistra Corp. (VST) : Free Stock Analysis Report
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