AI creates insufficient electricity demand
Everything comes from ChatGPT
The new generation of artificial intelligence revolution triggered by OpenAI’s generative artificial intelligence ChatGPT (for details, see my post of “OpenAI, the Generative Artificial Intelligence rising star and ChatGPT“) is changing the world. The most obvious one is that countries around the world and Technology giants continue to expand data centers to meet demand. However, the huge power consumption of soaring data centers has put global power demand at risk of a shortage – and nuclear power manufacturers are filling this power demand gap—this is why Nuclear power stocks spike year to date.
Electricity demand surges
Typical cases
What’s happening with tech giants
Big tech companies are making bold moves into nuclear power to meet growing energy demands. Microsoft (ticker: MSFT) recently signed a 20-year deal with Constellation (ticker: CEG) to power its data centers, while Amazon (ticker: AMZN) in Pennsylvania A $650 million data center is strategically located near the Susquehanna Nuclear Power Plant. Alphabet, Google’s parent company (tickers: GOOG and GOOGL), has joined this nuclear renaissance by investing in advanced nuclear technologies, including fusion energy.
Taiwan’s de-nuclear power hits TSMC hard
For a detailed discussion of this part, please see my post a few days ago “Taiwan’s abandoned nuclear hit TSMC hard, profit margins decrease 1% by electricity price increase“
Why nuclear energy?
First nuclear power plant
On June 27, 1954, Obninsk, the world’s first nuclear power plant, was connected to the Moscow power grid, and humanity became aware of the emergence of a new energy source for electricity production.
Highest availability
After 71 years of commercial operation of nuclear power generation, fourth-generation nuclear power units have begun commercial operation to generate electricity. Under the “comprehensive consideration” of the current safety, cost, maturity, power generation scale, construction schedule, and cost-effectiveness of nuclear power generation, nuclear power generation is the most cost-effective among the commonly used power generation methods in the world.
Regarding nuclear power generation, please see the detailed discussion in my previous post of “Current developments in Nuclear Energy and related companies“
Nuclear power is green power
You read that right, nuclear energy is green energy, and both the EU and Taiwan officials believe so. According to the latest definition of the U.S. Department of Energy, nuclear energy, which is not a renewable energy source, has also been included in clean energy.
Note: When questioned on October 31, 2023, Taiwan Executive Yuan Chen Chien-jen stated that “nuclear power is green energy” and was optimistic about the development of nuclear energy into nuclear fusion.
The world are accelerating shift to nuclear power
Countries around the world recognize nuclear power
At the United Nations Climate Conference (COP29) in November 2023, one of the main consensuses of the meeting was-“Without a massive increase in global nuclear power, it is absolutely impossible for the world to achieve an energy transition.” The United States, along with more than 20 other countries, has pledged to triple nuclear power capacity by 2050 to achieve net-zero carbon emissions and limit climate change.
The only country that rejects nuclear energy
At present, in all countries in the world, apart from Germany, which has invested heavily in green energy power generation in the past few decades and is qualified to not use nuclear power, there is really no country that is qualified to abolish nuclear power. However, Taiwan has decided to do so on its own because of ideology and regardless of professionalism. Broken his arm volunteerly; paid about US$10 billion in compensation to mothball the newly built fourth nuclear power plant. Starting next year, the three existing nuclear power plants will be decommissioned.
This move caused Taipower to increase electricity prices four times in three years, causing a sharp increase in the cost of living expenses and a huge increase in operating costs for enterprises, making them miserable. Please see my post a few days ago “Taiwan’s abandoned nuclear hit TSMC hard, profit margins decrease 1% by electricity price increase“
Nuclear power renaissance
As mentioned earlier in this article, except for the United States, which is most short of electricity and is the most active in the renaissance of nuclear power generation, the following are the trends of various countries in the past two months, which are enough to represent this wave of nuclear energy renaissance.
Japan
Japan has reversed its nuclear ban policy after the incident of 311 and has decided to restart nuclear energy to cope with power shortages and rising electricity prices.
Recently, Japan has restarted nuclear energy and even increased the proportion of nuclear energy supply from less than 10% of its electricity supply to 20% of its electricity supply by 2030. Among them, the recent announcement of restarting the Onagawa Nuclear Power Plant is the latest important indicator.
Czech Republic
South Korea Electric Power Company assists the Czech Republic in building a nuclear power plant.
Philippines
South Korea Electric Power Company has signed a contract with the Philippines, and it is expected to spend five years to help restart the Bataan nuclear power plant that was built 50 years ago at a cost of 1.8 billion US dollars but has not been commissioned.
Nuclear power stocks are soaring
Vistra
Vistra (ticker: VST) is currently the largest power plant in the United States. For details on the story of this company, please see my previous post:”Why did US largest electricity Vistra, a turned around comapny, share return higher than Nvidia?“
Constellation, the largest nuclear power company
Constellation Energy(ticker: CEG), which operates the largest number of conventional nuclear energy reactors in the United States, has seen its stock price more than double since the beginning of this year. The company only signed a 20-year power supply agreement with Microsoft in September.
Among them, Constellation Energy is worth mentioning, because Constellation Energy is also communicating with regulatory authorities to restart the Three Mile Island nuclear power plant in Pennsylvania that had a serious nuclear energy accident.
With its extensive nuclear infrastructure and proven operational expertise, this unique market position makes Constellation Energy a natural partner for technology companies that are competing to secure reliable sources of power for their artificial intelligence operations.
The landmark deal between Microsoft and Constellation Energy signals growing confidence in nuclear power’s role in the artificial intelligence revolution. The market has responded enthusiastically to Constellation Energy’s strategic moves in the nuclear power field, pushing its stock price up more than 126% this year.
Pioneer of small reactors Oklo
Oklo (ticker: OKLO) specializes in developing advanced small modular reactors (SMRs) whose compact design ensures enhanced safety features and operational flexibility. Oklo’s innovative Aurora power station is scheduled to begin commercial operation in 2027, positioning it to meet the growing demand for reliable, clean energy from technology companies expanding their artificial intelligence operations.
Even though it’s still several years away from generating significant revenue, investors are showing strong confidence in Oklo’s potential. Oklo, backed by OpenAI CEO Sam Altman, has become a leader in next-generation nuclear technology. Since going public in May 2023, the company’s stock has delivered a stunning return of 113% year-to-date.
Nuclear fuel innovator Lightbridge
Lightbridge (ticker: LTBR) is revolutionizing nuclear fuel technology with its leading metal fuel design. Lightbridge’s innovative approach could significantly improve the efficiency and safety of existing and future nuclear reactors.
With data centers experiencing unprecedented demand for reliable power, this advanced fuel technology could be particularly valuable. Lightbridge’s next-generation fuel design promises to increase the power output of existing reactors while improving safety margins, making it an attractive solution for utilities meeting the growing energy needs of technology companies.
Other related vendors
NuScale Electric Power Company (ticker: SMR) surged 37% over the same period, and the stock prices of Cameco (ticker: CCJ), BWX Technology (ticker: BWXT) and other companies are trading at record high levels.
Uranium producer Cameco’s stock price has soared 38% this year, and nuclear energy component supplier BWX has also jumped 65%.
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