As emissions figures prove, nuclear is one of the cleanest forms of energy available. It’s on par with renewable energy and, in some cases, even surpasses renewables when it comes to carbon emissions. It also provides baseload energy, which is crucial for the large power grids that cities around the world rely upon. These details aren’t new. They’ve been known for many years and that’s why nuclear power stations can be found in large numbers around the globe.
Nuclear currently provides just over ten percent of the world’s electricity requirements1 and as a result, it prevents the emission of 2.1 billion tonnes of CO2 equivalent every year2.
According to the highly respected Intergovernmental Panel on Climate Change, a minimum of 80% of the world’s electricity needs to be low carbon by 20503 if we are to prevent global temperature increases beyond 2°C.
However, with global electricity demand forecast to grow between 80% and 130% by 20504, studies show that without nuclear energy, significant carbon emission reduction will not be possible.
The world’s largest economies, including the USA and China, are already major users of nuclear energy, and they are not alone. Russia, UK, France, Canada, South Korea, India and Belgium, all rely heavily on nuclear energy. Even countries like the United Arab Emirates – the home of big oil – have nuclear power stations in operation, and have a lot more in the proposal stage.
Altogether, there are currently 441 operable reactors around the world and another 53 new reactors already under construction. Over 100 more reactors are currently planned, with upwards of 320 additional reactors in the proposal stage5.
However you want to look at it, nuclear energy has a major part to play in decarbonization. As the numbers prove, it’s here to stay and it’s set to grow. In fact, the most recent World Nuclear Association’s Fuel Report shows a 26 percent increase in uranium demand over the next decade. However, while all this has been going on, uranium production has been suffering.
For nearly a decade, there was good reason for a production pullback. A state of oversupply, combined with large, end-user stockpiles, resulted in years of low uranium prices. Eventually, the pricing environment forced major supplier action. Here are some of the headline items:
- Kazatoprom – the world’s largest uranium supplier has cut production by 20%.
- Cameco, the 2nd largest supplier has shut down its flagship McArthur River – the world’s largest uranium mine
- Rio Tinto, one of the world’s largest mining companies, has all but exited the uranium business – selling and winding down uranium operations.
- Investment has dried up for any new projects or expansions that do not show highly competitive operating costs.
Then we have the Covid-19 pandemic, which has led to further production complications with temporary mine and mill closures. Overall, supply has been hit hard and the widescale pull back in production has aggressively eaten through end-user stockpiles and brought supply and demand into closer balance.
As a result, in 2020 prices saw the largest jump in five years and they are now substantially higher than the 16-year low in 2016. The thing is, as far as producers are concerned, prices still need to climb further before returning to the fold.
Cameco still refuses to set a date for restarting the McArthur River mine. Kazatomprom has extended its production cut through 2022 – both are clear indications that producers are demanding higher prices.
All of this is good news for the uranium market, particularly for companies like Fission Uranium, which have projects with the potential for some of the lowest production costs in the sector. That’s why our company has been busy transitioning from explorer to developer.
We already have a robust prefeasibility study in place for our PLS project in Saskatchewan, Canada. We are now advancing the environmental, social and technical work required for a prefeasibility report – all with the aim of reaching a construction decision by 2026.
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1 International Energy Association
2 International Energy Association
3 Intergovernmental Panel on Climate Change
4 International Energy Association
5 World Nuclear Association
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