Earlier this month, the European Commission made a recommendation that nuclear power should count as green energy.
The EU uses an investment classification system called the EU Taxonomy, where it attempts to set common language and clear definitions around what counts as “sustainable.” Three types of investments are considered green: those that substantially contribute to emissions goals, such as wind or solar farming; those that enable other green activities, such as electricity storage; and transitional activities that are not considered fully sustainable but have emissions below industry average.
Nuclear power is considered vital to reaching net zero emissions by some experts, and is heavily factored into both France and the Czech Republic’s energy infrastructure.
Uranium is emerging from a decade-long bear market where uranium oversupply and widespread mistrust of nuclear power following high-profile disasters had dampened the public outlook on nuclear energy. As the threat of climate change has become more pronounced, nuclear energy is gaining attention as a possible green solution to help pivot away from coal and other high-emission energy sources.
Nuclear power currently provides 10% of the world’s electricity and has lower emissions per gigawatt-hour than even wind and solar power. Additionally, solar and wind power are still nascent in their development and have some quirks. Solar panels only work when receiving sunlight, and wind turbines rely on strong winds to meet demand. Electrical storage can make up for some deficiency here, but nuclear power has the advantage of being nearly always online and generating energy.
Additionally, the supply situation for nuclear power has shifted drastically. Low prices for uranium in the past decade have dis-incentivized the creation of new mines and increasing production capacity. However, resurgent demand means that supply will be tapped, further driving up prices and making now an excellent time for investors to get into uranium through funds such as the Sprott Physical Uranium Trust (U.U). The Sprott Physical Uranium Trust provides investors with a secure, convenient way to get exposure to physical uranium at a time where the market is ripe to take off.
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