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Wednesday, November 29, 2023

Small Modular Reactors Spark Interest as Nuclear Energy and Uranium Gain Stea​m

As nuclear energy and uranium continue to attract renewed attention from both investors and the general public, technological advances are bringing small modular reactors (SMRs) to the forefront.

SMRs vary in size and power, but are essentially smaller-scale versions of traditional nuclear reactors. Although it’s still early days, they’ve been praised by industry insiders for various reasons, including their size and relative simplicity.

During the latest Prospectors & Developers Association of Canada (PDAC) convention, several uranium companies and expert voices highlighted SMRs as a key component of the market moving forward. They also discussed the moment nuclear energy is having in the eyes of investors, and shared their thoughts on what’s needed to move the industry forward.

Nuclear energy sentiment strong on PDAC floor

“I think there’s been a massive transformation in the way that people view uranium,” Siobhan Lancaster, CEO of 92 Energy (ASX:92E,OTCQX:NTELF), told the Investing News Network on the PDAC floor.

The uranium executive said the ongoing dialogue around decarbonization has been a significant motivator for renewed interest in nuclear energy. She sees a shift in attitudes toward nuclear energy as something that is allowing the industry to find a bigger path.

“You’re seeing people starting to understand that nuclear energy really has the ability to decarbonize the globe,” Lancaster said.

Anthony Balme, chairman of Forum Energy Metals (TSXV:FMC,OTCQB:FDCFF), echoed Lancaster, saying more people are recognizing the role this energy source will have to play moving forward. “I think everyone realizes now that nuclear energy is going to become an essential part of the energy mix, and we can’t survive just on wind and solar,” he said.

Lancaster added that there’s been a significant uptick in nuclear energy interest thanks to the development of one particular technology: SMRs. “You see that conversation changing with that new emerging technology,” she said.

Major uranium players highlight SMRs at convention

PDAC featured talks from several companies working on SMR projects of various scopes and reaches, including:

  • Westinghouse Electric
  • X-Energy
  • Ultrasafe Nuclear

During their presentations, the companies hit similar bullet points on safety and usability as they highlighted the efficacy of SMRs. One theme was evident throughout — interest in these sources of power is seemingly growing by the day.

Ultrasafe Nuclear has signed several principal deals with universities across the globe for the deployment of its microreactor.

Rosemary Yeremian, the company’s vice president of business development, touted the ability of SMRs to offer long-lasting, safe access to nuclear energy for different types of facilities, potentially even mines. As miners try to reduce expenses across their operations, it’s possible that SMRs could be an alternative way to power projects.

The rest of the SMR firms stressed the option for these reactors to operate without the need to be close to a body of water. They also endorsed the potential for this technology to be deployed speedily.

“We don’t get burdened with large construction challenges,” said Eddie Saab, president of Westinghouse Electric’s division in Canada. He added that microreactor projects can be tackled more efficiently and deployed faster.

​Geopolitical conditions affect uranium strategy

Decarbonization efforts and the development of new technologies are helping to shift global perspectives on the nuclear industry, but the current geopolitical landscape is another pressure point creating change.

Russia has faced severe sanctions in various industries due to its invasion of Ukraine, including bans and price caps on oil and gas. These restrictions have highlighted the need for alternative energy sources.

In Canada, leading uranium company Cameco (TSX:CCO,NYSE:CCJ) teamed up last year with Brookfield Renewable Partners, an investment firm focused on clean energy, to acquire Westinghouse Electric for US$7.9 billion.

“We’re witnessing some of the best market fundamentals we’ve ever seen in the nuclear energy sector,” Tim Gitzel, CEO of Cameco, said last October when the transaction was announced, also mentioning the increasing importance of energy security.

The US is also taking steps to reduce its exposure to Russian energy. In the summer of 2022, the country officially began looking to create a uranium reserve using material sourced from approved companies.

A January market report from Sprott notes that the strategy includes an initial investment of US$75 million and states that the nation has so far signed deals with the following companies:

  • Uranium Energy (NYSEAMERICAN:UEC)
  • Peninsula Energy (ASX:PEN,OTCQB:PENMF)

Days after PDAC, a group of senators introduced legislation geared at banning imports of Russian uranium. The US currently gets nearly 15 percent of its uranium from Russia, while 35 percent comes from Kazakhstan.

Investor takeaway

The latest edition of PDAC offered investors another shot at seeing firsthand the evolution of nuclear energy and how excited companies in this space are for the path ahead.

The groundwork is being built for the future of this industry, and the critical need for alternative energy sources is beginning to take over the dialogue surrounding the reputation of nuclear energy.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no investment interest in any of the companies mentioned in this article.

Editorial Disclosure: Forum Energy Metals and Energy Fuels are clients of the Investing News Network. This article is not paid-for content.

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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