Nuclear revival ushers in a ‘new era’ for uranium

Good morning and welcome back to Energy Source, coming to you from the suburbs of Toledo, Ohio. 

The Midwestern city has become a hub for solar panel production and research, with US solar manufacturing giant First Solar’s longest running factory located nearby. But Toledo’s solar reputation took a hit this week after Toledo Solar, another local manufacturer, declared it was shutting down its business due to licensing issues.

Down in Texas, more than 1.5mn households remained without power yesterday two days after the state was battered by Hurricane Beryl, leaving many to swelter in the baking summer heat without air conditioning. 

The slow pace of recovery has sparked clashes between federal and state authorities and put fresh scrutiny on CenterPoint, Houston’s main utility. It accounted for 1.4mn of the 2mn outages on Wednesday morning, according to the company.

Today’s Energy Source dives into the market for nuclear fuel and one Canadian start-up’s plans to build the largest mine in the world for uranium. 

In Data Drill, Rhea Basarkar looks at China’s rapid deployment of renewables. Two new reports show the country’s pace isn’t slowing down anytime soon. 

Thanks for reading,

Amanda 

‘A whole new era’ for uranium

The scramble to find around-the-clock clean power coupled with new US limitations on Russian uranium products are ushering in a “whole new era” for the nuclear fuel market.

Spot prices for uranium are up 50 per cent in the past year, averaging $84 per pound last month and surpassing $100 per pound earlier this year, as demand continues to outstrip supply, according to UxC, a data analytics company. A new US ban on uranium from Russia, a top-three market for imports, will also further tighten supply for its utilities. 

“It’s a whole new era in the uranium market,” said Leigh Curyer, chief executive of NexGen Energy. The Canadian start-up believes it can solve the west’s uranium shortage with its project in Saskatchewan, Canada, a city that’s been called the “Saudi Arabia of Uranium”. 

If successful, NexGen’s uranium project, known as Rook 1, will be the largest in the world, contributing a quarter of global supply. The C$1.3bn ($954.7mn) project, awaiting federal approval, is slated to begin operations by early 2029, shortly after waivers in the US uranium ban expire. 

“We need to get [Rook 1] online and soon, in order to fill the gap, or the void, that the Russian uranium ban is going to create,” Curyer said. 

Nuclear power has experienced a revival in the past couple of years with more than 20 countries signing a declaration at COP28 to triple capacity by mid-century. Tech companies also regard nuclear and its emerging technologies like small modular reactors as a 24/7, zero-carbon solution as they face scrutiny over emissions from power-hungry data centres.

The renewed interest has sparked a rush to secure supplies of uranium, which has suffered from under-investment following Japan’s Fukushima disaster in 2011. A new investment vehicle launched in 2021 also further tightened the spot market. 

“The underlying supply-demand fundamentals for uranium are far stronger than those during the 2000s bull market and might actually be the strongest ever,” wrote Jérémie Peloso, a strategist at BCA Research, in a note to clients late last month.

The World Nuclear Association expects uranium demand — which sat at 65,650 tonnes last year — to reach 83,840 tonnes by 2030 and double to 130,000 tonnes by 2040. Roughly 60 nuclear reactors are under construction globally, with China and India leading the buildout.

Craig Hutchison, base metals analyst at TD Securities, called NexGen’s project “incredibly material” to alleviate the supply shortage. 

“Projects so far to date won’t meet that production gap,” said Hutchison, while cautioning that numerous hurdles face NexGen before its uranium enters the market, including finding sufficient labour and getting permit approvals, a process often fraught with delays. 

Kazakhstan is the largest uranium producer in the world, followed by Canada. High prices for uranium have incentivised miners to restart operations, with at least 10 mines reopening in the US, Canada and Australia since 2022.

“The purchasing power is back in the producer’s hand, where before the price setters were more the utilities,” said Puneet Singh, an equity research analyst at Eight Capital, adding that the west also needs to invest in the conversion and enrichment of uranium in order to secure its nuclear supply chain. 

Data Drill

China’s leadership in clean energy will continue well into the next decade. A report from Wood Mackenzie released this week found that Beijing will make up half of global solar and wind additions through 2033.

A separate report from the Global Energy Monitor this morning found China is constructing nearly two-thirds of the world’s utility-scale solar and wind — enough to power all of South Korea.

China is also set to dominate the rapidly growing market for energy storage, which Wood Mackenzie expects to grow by more than 600 per cent over the next decade. Beijing is expected to deploy 422 gigawatts of energy storage by 2033, more than double the United States.

The rapid deployment, driven by low costs and strong policy support, highlights some of the contradictions in Beijing’s energy strategy. The country started building 70GW of coal capacity in 2023, making up 95 per cent of the world’s coal construction that year, according to GEM.

China’s energy transition also faces major constraints due to its ageing electricity grid. More than 100 counties and cities in five provinces suspended new small solar projects from connecting to the grid this year, our colleagues in China reported earlier this week.

GEM forecasters suggest that if China can overcome grid constraints and convert its renewables buildout into electricity generation, emissions in the country’s power sector could peak before the proposed 2030 timeline. (Rhea Basarkar)

Job moves

• Japanese battery manufacturer AESC has appointed Knudt Flor as chief executive of the company’s US and European operations. Flor has worked for more than three decades at BMW.

• Steven Wei Feng resigned as chief financial officer of Chinese EV manufacturer Nio. Stanley Yu Qu, senior vice-president of finance, was appointed to succeed Feng.

• ESG Book, a sustainability platform, named Justin Fitzpatrick its new chief executive, succeeding Daniel Klier. Fitzpatrick joins from FullCircl.

• GTI Energy, a consultancy, appointed Nick Stavropoulos and John Somerhalder II as chair and vice-chair, respectively, of its board. Kelcey Brown and Bill Yardley were also elected as directors.

Power Points

Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.