Is it worth investing in Nuclear Power?

 For the last ten years, most media outlets have paid a great deal of attention to the worldwide energy crisis and to global warming in particular. It is generally agreed that alternative energy sources will need to be developed to meet our ever expanding need for power. Possibilities include wind power, solar power, wave/tidal energy and biomass but while these technologies can make a contribution, it is unlikely that that existing alternative energy technology can provide enough energy to meet out needs.

Another possibility is nuclear power which is clean, efficient, reliable and relatively cheap. Despite the problems disposing of the dangerous waste produced, politicians seem to be ready to consider the use of nuclear power and might agree to a large scale construction program.

Many analysts have speculated that the worldwide nuclear energy market could grow substantially by 2030.

Does this mean nuclear energy is worth investing in?

In the U.S.A, the Department of Energy expects the amount of electricity needed to rise by 50% during the next twenty years. Worldwide electricity consumption is expected to double by 2030. Fossil fuel stocks are dwindling and the price oil continues to rise

It more than possible that there will be an increase in demand for nuclear power and this coincides with a weak amount of supply. Basic economics tells us that prices increase and decrease according to supply and demand.

Furthermore, as emerging economies in Asia develop over the next twenty years, the spike in demand for cheap, clean, reliable alternative energy sources could intensify and nuclear power is well placed.

Various private sector investment managers have recently described the structural shortage of power generation facilities in the developing world. Some countries are in the process of building large numbers of nuclear power stations and this will lift the demand for uranium.

Until recently, it has been very difficult for an ordinary investor to participate in the nuclear energy market because most investment opportunities were offshore. This has changed and there are now several options available

  • Three years ago, the New York Mercantile Exchange (NYMEX) launched its first futures contract for uranium. This allows investors to speculate on the future growth. Prices were high before the Global Credit Crisis in 2008 when uranium was trading at approximately $140 per pound. Recently it was approximately $40
  • Investors can invest in the potential growth in the price of uranium by investing in mining companies which often have a very low share price. Proper research should be carried out and if the company finds substantial deposits the share prices will rise significantly.
  • Investors can invest in companies that have existing uranium operations such as BHP Billiton and Cameco which are both large companies and proven leaders in the field. Many smaller companies in countries with uranium deposits are good investment opportunities but shares would need to be purchased on a foreign exchange.
  •  The currency of countries with uranium deposits should increase in price and Forex Brokers could give advice about whether this is a viable investment opportunity
Global Warming? World Energy Crisis? No Way!

 

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