Switzerland appeared to waive its moratorium on new nuclear power stations on Wednesday, August 28, after the government’s finance minister said “The situation on the electricity market has changed radically.” The Swiss effectively voted to introduce a ban on new nuclear power plants in a 2017 referendum. Its existing four nuclear power plants continue to operate, but there are no existing plans to replace them before they reach the end of their natural lifetimes.

It follows plans by France’s President Macron in 2022 to build six new nuclear reactors. Macron described a combination of renewable and nuclear energy sources as “The most carbon-free, safest and most sovereign way” to meet the country’s energy requirements.

While some nations are warming up to nuclear, after the 2011 Fukushima incident reignited old fears around the technology, others continue to ignore, or even dismantle their nuclear capabilities. Last year, Germany shut down the last of its reactors, despite facing an ongoing energy shortage resulting from losing supply from Russia. Then environment minister, Steffi Lemke, said “The risks of nuclear power are ultimately unmanageable.”

Amid this widespread disagreement in analysis and strategy, who is getting it right? Is nuclear power safe, and if so, why don’t we use more of it?

How much power is nuclear?

In 2022, nuclear power fell as a percentage of global power usage to its lowest since the 1980s. The annual World Nuclear Industry Status Report found that nuclear energy accounted for just 9.8 per cent of gross electricity generation in the entire year, according to Reuters. It fell again to a new low in 2023, the outlet reported, when nuclear accounted for just 9.2 per cent of gross electricity generation. Those numbers could continue to plummet, as the high costs and extended time lag to bring reactors online means more plants close down than open in the coming years.

For all the talk of a green industrial revolution, coal still accounted for 36 per cent of electricity generation worldwide in 2022, according to IEA data. Even if coal-fired electricity generation is slashed by almost half by 2030, as the agency calls for, it would still comprise 12 per cent in 2030.

Is nuclear power dangerous?

If you ask Google this question you are likely to find one of the top answers comes from Greenpeace. They say it isn’t. In a 2022 article by Greenpeace content editor, Mehdi Leman, warns, amongst other things, that nuclear reactors could be targeted by terrorists, hit by airliners, targeted by hackers, caught up in extreme weather events or be damaged in the event of conflict.

However, the International Atomic Agency, an arm of UN governance, has described nuclear power stations as among the safest facilities in the world. And since nuclear reactors first came online in the 1950s only a small number of people have died as a result of nuclear accidents. The famous Chernobyl disaster claimed dozens of victims, rather than thousands, according to the World Nuclear Association. In contrast, thousands of workers in the mining industry die every year, in particular those who mine coal underground.

While it is true that nuclear reactors have unique properties which can pose a specific and acute danger if they become compromised, the results of such accidents have so far proven to be less disastrous than the popular imagination. When the Fukushima nuclear power plant overheated as a result of an earthquake, around seven people were found to have died from the subsequent radiation leak.

And regulators and governments are it would seem aware malfeasant elements might attempt to fly a plane into a nuclear reactor, or carry out a similar attack. This is why nuclear power plants are built to survive an impact from an airliner – or worse. A 1988 experiment saw an F4 Phantom jet crash into the same reinforced concrete used to build nuclear reactors. The experiment recorded the jet had managed to score an impact just 2.5 inches deep.

The Thiel theory

There are a number of cross-pressures acting on legislators on the nuclear issue. On the one hand, nuclear energy takes an extraordinarily long time to bring online and is very expensive. It produces low carbon energy but creates a toxic byproduct which can be difficult to safely dispose of. And there are a number of lobby groups that believe the existence of nuclear power is an existential threat. In one reading, governments are looking at the cost-benefit analysis, and choosing not to rock the boat in the face of the short-term downsides and popular pressure, by and large at least.

But Peter Thiel, former PayPal MD and co-founder of Palantir Technologies, thinks there might be a different reason for the government’s reluctance to invest in new nuclear. In a recent appearance on the Joe Rogan podcast, he set out how fears over the acceleration from nuclear reactors to nuclear bombs resulted in an overregulation of the electricity-generating technology which by intention or not has made their construction effectively unviable. Commenting, he said:

“Nuclear was supposed to be the energy mode of the 21st century. There are these historical questions. Why did it get stopped? Why did we not go down that route? The standard explanation was that there were all these dangers, we had Three Mile Island, Chornobyl, Fukushima, and you had these various accidents. My alternate theory on why nuclear energy really stopped is that it was sort of dystopian or even apocalyptic because it turned out to be very dual-use.

“If you build nuclear power plants it’s only one step away from building nuclear weapons. It turned out to be a lot trickier to separate those two things than it looked. In 1974 or 1975 India gets the nuclear bomb. The US had transferred nuclear technology to India, we thought they couldn’t weaponize it and it turned out it was pretty easy to weaponize. The geopolitical problem with nuclear power is you either need a double standard, where we have nuclear power in the US, but we don’t let 100 other countries have nuclear weapons. That’s an extreme double standard, probably a little bit hard to justify.

“Or you need some kind of really effective global governance where you have a one world government which regulates all this stuff which doesn’t sound that good either. The compromise was just to regulate it so much that maybe nuclear plants got grandfathered in but it became too expensive to build new ones.”

Is there an investment opportunity in nuclear?

Nuclear energy is hated by large swathes of the population, is very expensive to get going, and takes a long time to come online. The electricity it produces as a share of global generation appears to be shrinking each year, and despite acute shortages in traditional fossil fuels some major economies seem to remain wedded to discarding the technology. But it remains a useful technology nonetheless.

In a November 2023 article The Morning Star reported “Nuclear power is making a comeback in the energy programs of many countries” citing the Advance Act in the USA and a revival of nuclear production in Canada. The outlet listed a number of companies which could benefit from a resurgence in nuclear growth, including Centrica and China General Nuclear Power. They also highlighted a potential opportunity in the uranium market.

In August 2023, the uranium spot price was $59.93. By July that had risen to $84.05, according to data from Cameco. As Nuclear Engineering International reported, uranium prices more than doubled in 2023 and have continued to rise this year with “little sign of slowing” – though The Economist warned “investors should be careful” should the uranium market go into meltdown.

It could also pay to keep tabs on Rolls Royce, which could be set to roll out small modular reactors, essentially mini nuclear power plants across the UK. In a June article for the Motley Fool, contributor James Beard wrote:

“The first UK SMR isn’t expected to be operational until the mid-2030s. And their delivery will be spread across a decade or so.

“Also, there’s no guarantee that Rolls-Royce will be successful with its bid. The government may also choose several suppliers.

“In addition, not everyone is convinced that nuclear power is a clean source of energy as the waste remains highly dangerous for thousands of years. A new government could lead to a change in policy and a shift towards other methods of energy generation.

“Although share prices are supposed to be forward-looking, I doubt many investors are buying the company’s shares today in anticipation of increased earnings in 10 years’ time. It’s therefore a little early to assess how this new technology might impact the Rolls-Royce share price.

“The middle of the next decade is a long time to wait for the commercialisation of SMRs. But when the future does become clearer, I’m sure the technology’s potential will be factored into the company’s share price.”

So, there may be an opportunity in nuclear there for the taking – but it is always prudent to take professional financial advice before making any investment decision.

Where next for nuclear?

The future of nuclear power is at a crossroads, shaped by a complex interplay of technological, geopolitical, and environmental factors. Despite the clear benefits of nuclear energy as a low-carbon power source, its adoption remains hampered by high costs, long lead times, and public fear rooted in historical accidents. However, recent trends suggest a potential resurgence, driven by rising energy prices and advancements in nuclear technology, such as SMRs.

Moreover, the rising price of uranium and the increasing interest from both public and private sectors indicate a renewed focus on nuclear energy as part of a diversified energy strategy. Countries like the U.S., Canada, and the UK are revisiting their nuclear policies, recognizing the role it could play in achieving energy security and reducing reliance on fossil fuels. While the path forward is fraught with challenges, the evolving landscape suggests that nuclear power may still have a significant role to play in the global energy transition.