Are you interested in learning more about publicly traded nuclear companies? Investing in energy companies is a smart choice, since our demand for energy is only rising. Investing in nuclear energy stocks provides a unique opportunity. Unlike most traditional forms of energy (such as coal and oil), nuclear energy is not a commodity, but a process for developing energy. Publicly traded nuclear companies produce their energy through nuclear fusion, which produces heat and friction (ie- energy).
Supporters of publicly traded nuclear companies say that the relatively clean process for creating nuclear energy, and the fact that it doesn’t rob our planet of its resources, makes it an ideal solution to meet the demand. Of course opponents point out the potential risk of promoting nuclear energy — the 2011 earthquake in Japan, in which a nuclear power plant was damaged and the entire area had to be abandoned is a good example of the downsides of nuclear power. However, the more publicly traded nuclear companies are developed, the the more likely safety measures will be developed to promote cheap, clean energy, safely.
If you are interested in investing in nuclear energy, consider these aspects:
- The cost of producing nuclear energy is less.
Most power plants that run on fossil fuel cost up to three to four times more to generate nuclear energy. While every kilowatt hour of nuclear energy costs about 1.72 cents to produce, oil energy costs 8.09 cents, and gas costs 7.51 cents per kilowatt hour. The only energy source that is even comparable in cost is coal, at 2.21 cents per kilowatt hour, but the ecological impact of coal makes it a fading industry.
The biggest reason for the huge difference in cost for nuclear energy when compared to fossil fuel sources is the cost of commodities. The oil, gas, and coal that is required for producing energy accounts for about 94% of its production costs. The uranium needed to produce nuclear energy only accounts for about 26% of its total production costs.
As an investor, lower production costs equal greater profit margins.
- The cost of getting online is greater.
While ongoing costs for nuclear energy is lower than any of its counterparts, building a nuclear power plant is expensive. Going through the regulatory process and developing a nuclear power plant takes upwards of a decade and costs about $2,000 per kilowatt hour of output, while gas power plants cost closer to $800 per kilowatt hour to develop. For this reason, many nuclear investors like to invest in companies who have ownership in established power plants rather than getting in on the ground work. One advantage of the lengthy startup process is that you’re about a decade away from any nuclear competition being developed.
The inexpensive output that a nuclear utility provider is capable of makes them capable of selling huge amounts of power. The greatest challenge in generating profits as a nuclear provider is regulatory oversight. As the energy business is a regulated industry, the retail price that nuclear energy can be sold is limited to what regulators allow. Even under regulatory limits, nuclear energy has an edge as gas and oil prices rise, making other forms of energy more expensive to produce and increasing the “going rate” for energy.
However, investing in companies who have ownership in nuclear power plants that sell on the wholesale market have relatively few regulatory requirements and are able to generate greater profits.
- Investing in the future.
Another aspect of investing in nuclear energy is investing in technology that makes nuclear energy cheaper and easier to produce. There are companies who develop more efficient methods of converting uranium into energy. There are companies who focus on refining the uranium to product more energy through the traditional processes. The stocks for these kinds of companies could become extremely valuable if they’re successful, and as the need for energy rises.
Investing in nuclear energy could be an incredibly opportunity, as the need for energy rises and alternate forms of energy become more expensive and less available. A few aspects to consider before investing in nuclear energy are the cost of production, the startup costs, the profitability, and the technology that streamlines production.