Overnight we read the following article on Bloomberg which mentioned the US Department Of Energy preparing to launch a US$6 billion program aimed at keeping uneconomical nuclear plants in service:
US nuclear power plants stand at ~93 reactors which combined provide ~1/5th of the country's electricity. More importantly though, the reactors supply more emission-free power than all other renewable energy sources combined.
The issue for these reactors is mostly centred around the reactors inability to compete with modern/cheaper sources of electricity generation mostly due to age. As a result, a lot of these were being considered for early shutdowns primarily related to the economics of keeping them open.
If the US government intervenes, these plants could stay in operation for longer and in turn ensure that there is more demand for the raw material which powers them being Uranium.
It’s long been our view that future electricity grids of countries all around the world will need to have some mix of nuclear energy, given it is one of the lowest carbon emission sources of baseload electricity generation.
As exposure to the sector, we hold uranium explorer GTI Resources (ASX: GTR) which is targeting Uranium discoveries in Wyoming, USA & Utah, USA. GTR’s projects in Wyoming specifically are strategically located with ~80% of domestic production coming out of this region.
Next: We are looking forward to GTR announcing its planned follow up drilling programs across its Wyoming projects and the completion of the recent acquisition which will almost double GTI’s project area in this part of the USA.
To see why we continue to hold GTR in our portfolio, check out our 2022 Investment Memo here.