Bullish on UraniumUranium Prices Weak – IAEA Remains Bullish on the Future
October 5, 2016 19:10 GMT – Donald Levit
Uranium prices remain under pressure from weak demand for the
commodity for nuclear power generation, but growth will accelerate in the coming years as countries turn to nuclear power as a more environmentally friendly means to generate electricity compared to coal.
While global nuclear capacity will continue expanding in the coming years, it will do it at a slightly reduced rate, at least according to the International Atomic Energy Agency (IAEA). In their updated forecast, the IAEA said it projects global nuclear capacity could reach 390.2GW by 2030, growing at a rate of 1.9% to 56%, down slightly from its forecast last year of 2.4% and 68%. THE IAEA downgraded its forecast due to some uncertainty surrounding license renewals and future constructions.
Construction of new nuclear plants and start-up of others has occurred at a slower than expected pace in the aftermath of the Fukushima nuclear disaster. While the delay has hit prices, it is only seen as that, a delay, and not a fundamental change in the long-term outlook for the nuclear sector.
Nuclear power demand growth will center on China and other developing countries such as India, who are dealing with a growing population and little options in providing cleaner, more affordable power to their citizens. Coal power has been the choice in the past, but the burning of coal contributed to a lot of emissions, something these countries are trying to get away from.
While Japan and Europe have delayed some of their nuclear plant developments, on a global scale things are starting to pick up. In the UK, Prime Minister Theresa May recently gave the final go-ahead for the construction of Hinkley Point C. In China, the country that is expected to lead future nuclear power growth, development of new plants are progressing and will pick up in the coming years.