Weekly Reports | Nov 30 2021
A Canadian power company has issued the first nuclear “green” bond but ESG investors are in two minds regarding nuclear power’s true “green” credentials.
-Bruce Power issues first nuclear green bond
-There are pluses and minuses regarding ESG criteria
-Spot uranium price jumps up
By Greg Peel
Canadian-based energy company Bruce Power last week announced the issuance of C$500m in “green” bonds, its CEO remarking “Clean nuclear power is crucial to fighting climate change, and today’s announcement marks another industry-leading step in the company’s environmental, social and governance strategy”.
Bruce Power has been a leader in the phasing out of coal-fired generation, and has been fundamental in the province of Ontario’s electricity system now being 94% emissions-free.
The issue for ESG-aligned investors is: Is nuclear power truly “green”?
Proponents point out nuclear power generation emits zero carbon dioxide, just like solar and wind and other renewables, and they are completely correct. But nuclear power is not “renewable”, as it requires uranium to fuel it, and that, like coal, has to be dug out of the ground.
The bulk of a nuclear reactor’s uranium consumption occurs at the initial stage ahead of firing up. Thereafter, lesser amounts are needed to keep it going. Based on a five to seven year average time of construction of a nuclear plant (itself emission-intensive) and the emission-intensive process of uranium mining/refining to fuel it, it is estimated a reactor will take ten to eighteen years before its zero emissions will net out emissions generated to get it there.
Moreover, reactors release heated waste-water into waterways which impacts dramatically on sea-life, and produces radioactive waste that will not break down for hundreds of years.
Hence, critics suggest nuclear power does not truly satisfy ESG credentials.
Investors will need to draw their own conclusions. Bruce Power’s bond was privately placed.
Weekly Spot Price
Industry consultant TradeTech’s weekly spot price indicator rose US75c to US$47.00/lb last week.
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