Nuclear Power Reinforces Its Role in Clean Energy. That Will Boost Uranium Prices.
It has been a decade since the Japan nuclear disaster caused the energy industry to rethink the safety of the power source. But the event hasn’t led to the destruction of the market or uranium demand.
Instead, it may have highlighted the importance of nuclear-power generation in the world’s efforts to provide clean energy.
“It would be far from accurate to say that Fukushima was the death knell for the nuclear industry,” says Jonathan Hinze, president at nuclear-fuel consultancy UxC.
On March 11, 2011, Japan suffered from a 9.0-magnitude earthquake, the largest ever recorded in the country. The massive tsunamis created by the quake flooded the Fukushima Daiichi power plant and led to the worst nuclear disaster in a quarter century. “Fukushima obviously was a huge event for the nuclear industry and had both short-term and long-term effects,” says Hinze.
By 2012, global nuclear-power generation dropped by about 11% from its pre-Fukushima level, and it wasn’t until 2019 that it fully recovered to the level seen in 2010, he says. The disaster also prompted other countries to rethink their plans for nuclear energy.
Even so, Fukushima didn’t fundamentally alter the industry, says Hinze. Nuclear remains an “ongoing key component of global energy supply,” representing about 10% of annual worldwide electricity generation.
The disaster wasn’t the only reason for the fall in nuclear power. In Europe and the U.S., power prices have been “more of an enemy to nuclear plants than safety concerns,” says William Freebairn, team lead for nuclear energy and uranium at S&P Global Platts.
In those two countries, new nuclear plants have been expensive to build, and priority access to the power grid and subsidies have been given to renewable resources, he says. China, meanwhile, has “bet significantly on nuclear power to decarbonize electricity production,” he says.