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Uranium Week: The Nuclear Debate

Weekly Reports | Feb 26 2019

Can a lower-emission world be achieved without nuclear energy?

-Activity slows in uranium markets
-Debate over nuclear’s role in energy markets
-China growth slowing

By Greg Peel

Activity in uranium markets fell to a low ebb last week. Industry consultant TradeTech reports five transactions in the spot market totalling only 500,000lbs U3O8 equivalent while no transactions were reported in term markets.

TradeTech’s weekly spot price and monthly term price indicators all remain unchanged at US$26.80/lb, US$30.00/lb (mid) and US$32.00/lb (long) respectively.

One reason why trading has stalled and prices levelled off is because US market participants are busy filling out lengthy questionnaires to aid the government’s section 232 investigation.

In the meantime, a bill put to Congress by two Democrats continues to draw scrutiny as it calls for a US policy of clean and zero-emission sources to address climate change. Dubbed USA’s Green New Deal, the bill specifically calls for a move away from nuclear power.

In response, a coalition of clean energy groups called ClearPath has published a paper suggesting the goals of the Green New Deal are impossible to achieve without preserving the current US reactor fleet and further developing new generation plants.

Secretary of Energy Rick Perry said last week that the administration is striving for an “all of the above” approach to energy policy including both renewables and nuclear, and that nuclear is part of a policy perceived by the president.

Demand Side

In the private sector, BP last week released its 2019 Energy Outlook which explores uncertainties for the global energy market through to 2040. The challenge ahead with regard reducing emissions, BP suggests, is not one of developed market policy but of increasing demand for energy as poorer nations become more prosperous, making the transition to a lower-carbon future more tricky.

BP forecasts an overall increase on global nuclear power to 3400TWh by 2040, of which 1000TWh will come from China alone as OECD generation declines.

The Chinese government plans to expand nuclear power capacity by 58GW by 2020 and have another 30GW under construction. China opened seven new reactors in 2018 and currently boasts an operating capacity of 43GW, making it the world’s fourth largest nuclear fleet.

Yet China’s nuclear capacity pales in comparison to its renewables capacity. Currently solar and wind are producing twice as much electricity in China than nuclear, and the government’s renewable power capacity target for 2020 is almost four times that of nuclear.

In the meantime, the pace of economic growth in China is slowing, In order for the nuclear capacity target to be reached, the pace of reactor construction approvals needs to increase.

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