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Stocks to Watch in Nuclear

Nuclear reactors can safely operate for 60-80 years. Image source: NRC/ .

Nuclear reactors can safely operate for 60-80 years. Image source: NRC/ Flickr .

The original price tag for Vogtle 3 and Vogtle 4 was a staggering $14 billion. While that was buoyed by an $8.3 billion Department of Energy loan and a state guarantee for Georgia Power to cover an additional $6.1 billion, construction delays and untimely setbacks have pushed expected costs to nearly $18 billion. If that wasn't bad enough, Southern Co is placing blame and responsibility on the builders, Toshiba and Chicago Bridge & Iron, while Georgia Power is now awkwardly caught in the middle.

Why does this matter for investors? Well, Georgia has a regulated power market, meaning the state can step in to artificially support large construction projects that require decades to payoff. The Vogtle additions would not be able to compete in a state with an unregulated market, which favor cheaper power sources with faster payoffs. If traditional nuclear power plants (large and centralized) can't compete in Georgia, then it may be a sign of things to come for nuclear power as we know it today.

Next-generation nuclear power

As large, centralized nuclear power plants at Exelon and Southern Co struggle to remain competitive with fossil and renewable energy sources, General Electric is forging a new path forward. The company owns one of the most advanced, albeit unfinished and unapproved, designs for a small modular reactor, or SMR. The sodium-cooled PRISM is a Generation IV nuclear reactor -- no Generation IV reactor has ever been deployed -- with an output of just 311 MW; but that's viewed as an advantage, not a setback.

SMRs can be constructed off-site in a manufacturing facility, shipped to site via truck or rail, and assembled onsite -- significantly reducing construction costs and deployment timelines. Better yet, the PRISM can consume a range of fuels including plutonium and used nuclear fuels stored at traditional nuclear power plants. Coupled with its smaller size, General Electric could build PRISMs at existing nuclear power plants to reduce waste stockpiles and boost electricity output. How's that for the future of nuclear?

What does it mean for investors?

While I support the widespread use of nuclear power, I think it's likely that traditional nuclear power will find it increasingly difficult to compete with fossil and renewable power sources outside of specialized cases. But that doesn't necessarily mean existing reactors cannot support valuable investments, nor does it mean that nuclear power is dead. It may just look strikingly different in the future.

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The article Stocks to Watch in Nuclear originally appeared on Fool.com.

Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio , CAPS page , previous writing for The Motley Fool, and follow him on Twitter to keep up with developments in the synthetic biology field.The Motley Fool recommends Southern Company. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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