The nuclear industry in the US considers 2022 an “inflection point,” with surging private investment and unprecedented government support reviving a sector that had fallen out of favor in recent decades.
According to industry estimates, new federal legislation enacted in the last 18 months will pump about $40 billion into the sector over the next decade, while roughly $5 billion in private funds has flowed into companies designing new types of reactors in the last year alone.
The infusion of funds comes as nuclear power, which has long suffered from investor apprehension over costs and negative public sentiment, has re-emerged as a critical component in the fight against climate change.
Nuclear power can provide a baseload of carbon-free power at scale 24 hours a day, seven days a week, regardless of weather, making it far more reliable than intermittent renewable sources like wind and solar.
The US currently has the world’s largest nuclear fleet, with 93 reactors in operation. That fleet provides roughly 20% of America’s energy and is responsible for generating half of the country’s carbon-free power.
In August, Congress passed the Inflation Reduction Act (IRA), which has the potential to stimulate significant investment in the nuclear industry. The IRA contains several key provisions reinforcing a wide range of new and existing nuclear industry activities. It also provides numerous technology-neutral credits aimed at low- or zero-carbon energy sources, including nuclear, in addition to new production tax credits for existing nuclear plants (which will strengthen the economic case for license renewals and continued operation of those facilities).
Private funds are also pouring into the sector rapidly as companies seek to develop new types of reactors that are more agile, smaller, cheaper, and safer than traditional large-scale nuclear.
Japan and the US recently announced that they intend to collaborate on designing and constructing next-generation advanced reactors, such as small modular reactors.
Canada has also launched a nuclear project that includes C$970 million ($708 million) in funding to develop a commercial grid-scale small modular reactor (SMR), a new nuclear technology that is a key part of its plans to reduce emissions.
Nuclear energy has something for everyone and is popular across the political spectrum, and increasingly popular with the public. All of this, combined with the recent passage of the Inflation Reduction Act of 2022 (IRA), indicates that the nuclear industry is entering a new era of significant growth and investment.
Where things get interesting is the question of ensuring there’s enough uranium supply to fuel the global reactor fleet. Having only recently exited a price slump that lasted an entire decade, the uranium mining sector is not ready for a major uptick in demand. More supply is needed soon.
There are a number of North American projects out there, but only a few with the economics, the stakeholder support, and the advanced status, to make it into production in good time.
Fission Uranium Corp. (TSX:FCU) (OTCQX:FCUUF) is a Canadian resource company focused on the development of its Patterson Lake South (PLS) uranium property, which is home to the class-leading Triple R uranium deposit.
PLS is located in the renowned Athabasca Basin uranium district, and the Triple R is the only existing major, high-grade deposit in the region found at shallow depth – a distinct advantage when it comes to construction time, reduced technical risk and competitive cost.
The company recently announced the results of a Feasibility Study (FS) on the Patterson Lake South Property conducted by third-party engineering expert Tetra Tech Canada Inc. The results confirm PLS as one of the world’s top uranium projects both economically and environmentally.
These impressive FS results support the strong economics outlined in the 2019 pre-feasibility study (PFS). Highlights include a 10-year mine life, a significantly higher after-tax NPV of $1.204B at an 8% discount, and a higher after-tax IRR of 27.2% while maintaining a very low OPEX of $13.02/lb.
Furthermore, initial CAPEX is marginally lower (2%) than the PFS, totaling $1.155 billion – an exceptional achievement given current global inflation. The findings support the PLS project’s economic viability and low environmental impact. With nuclear energy and the uranium sector growing year after year, Fission Uranium is in an excellent position to continue developing PLS through the environmental assessment and licensing stages and on into construction.
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