Cameco CEO sees ‘wave’ of nuclear demand
We have just added our nuclear power theme basket to our performance tracking and already yesterday a major news item emerged about the industry. The Canadian uranium miner Cameco and Brookfield Renewable Partners are jointly acquiring Westinghouse Electric which is a player in the nuclear power industry in a deal worth $7.9bn. Westinghouse Electric makes technology that is used in around half of all the 440 nuclear reactors. Cameco is issuing shares worth $650nm to fund its part of the deal.
Cameco’s CEO said in an interview that they are seeing some of the best market fundamentals ever for nuclear energy sector. Given that Westinghouse Electric came out of bankruptcy four years tells everyone how much has changed for the industry. The CEO also says that they are seeing a ‘wave’ of demand coming driven by Europe, highlights specifically Eastern Europe, as Russia’s invasion of Ukraine has been a game changer. The IEA (International Energy Agency) has stated that nuclear power generation must double by 2050 in order to meet net zero carbon emission in the global economy. That means 2.5% annualized growth in nuclear power generation. If we factor in the replacement of old nuclear power plants then growth is likely to be 5-6% annualized over the next 28 years.
According to the World Nuclear Association, there are 55 reactors under construction (90 if planned reactors are taking into consideration) with the most of these reactors being built in Asia supplementing the existing 440 nuclear power plants. This year nuclear power plants will produce 10% of the world’s electricity.