Japan might manage without nuclear power – a boon for gas and renewables investors

There are certain predictions that seem fairly safe if Japan succeeds in weaning itself off nuclear power so quickly. The switch away from nuclear power should be a major boon to natural gas producers around the world.

Certainly the abandonment of nuclear power would be crushing to uranium miners like Cameco; there would be demand for uranium to service existing plants, but the growth story would vanish.

Last and not least, abandoning nuclear power should be a major positive for renewable energy companies.

THE END OF NUCLEAR POWER: A BOON FOR INVESTORS? The Bull.com.au By Investopedia.com | 14.05.2012 Investors interested in the electrical utility sector and related industries, like mining and engineering, ought to pay a little extra
attention to Japan over the next few months.

With the last operating nuclear plant in Japan going offline for maintenance, Japan will be
operating a nuclear power-free electricity grid this summer. Whether the country gets through the summer without incident or interruption, it seems safe to bet that advocates on either side of the nuclear power debate will be paying close attention…..

This summer will be the real test, as the warm muggy climate of much of Japan puts a strain on the power grid. Last year, the nation made it through by implementing usage limits and asking businesses to shift activity to off-peak hours (weekends and evenings) to reduce peak demand. If similar measures manage to succeed this summer, and residents are not subjected to blackouts or excessive limitations, it may be hard to muster the support to restart those nuclear plants. Activists in other countries could likely point to Japan as proof that nuclear power is not essential. Japan Today, Europe Next?

Pressure has already been building in Europe for countries to shift
away from nuclear power. Switzerland has abandoned plans to build any
new plants, while Germany intends to phase out nuclear power by 2022.
With the switch in political leadership in France, even the world’s
leading user of nuclear energy (about 80% of their total) may be on
the verge of rethinking their commitment to nuclear energy……
The United States Caught in the Model
Nuclear power hasn’t been popular in the United States for quite some
time, its reputation ruined by accidents like Three Mile Island,
Chernobyl and Vermont Yankee, but also by an inability to solve issues
like waste disposal. When it comes right down to it, nuclear power in
the U.S. has never offered the cost savings that its supporters
project – some of that due to regulatory overburden, but also due to
lower-than-expected operating cost efficiencies…..
It’s also worth noting that 2012 has already seen a major shift in
U.S. electricity generation – due in large part to growing natural gas
supplies (and low costs) and growing environmental regulations, more
and more utilities are switching from coal-fired production to natural
gas.
The Implications of a Full Switch
There are certain predictions that seem fairly safe if Japan succeeds in weaning itself off nuclear power so quickly. The switch away from nuclear power should be a major boon to natural gas producers around the world. No country wants to swap out nuclear
generation for more coal-fired generation, but gas turbines are an
increasingly attractive option. General Electric and Siemens have
poured money into developing better gas turbines, reducing the cost of
gas-fired production below that of coal. The impact on engineering
firms will be well worth monitoring – those firms with expertise and
experience in gas-fired plants will thrive, while those committed to
servicing nuclear plants are going to be forced to adapt.
In the U.S., then, this will be a big help for natural gas producers,
as well as midstream and pipeline customers. Globally, it may also
create an opportunity for companies like Chevron that have invested
heavily in offshore liquefied natural gas platforms that are intended
to supply India, China and Japan in the years to come…..
Certainly the abandonment of nuclear power would be crushing to
uranium miners like Cameco; there would be demand for uranium to
service existing plants, but the growth story would vanish. This
migration would also not be notably positive for coal; while it may
create some near-term incremental demand as an immediate replacement
for nuclear generation, no country seems eager to tie more of its
future electricity grid to coal.
Last and not least, abandoning nuclear power should be a major
positive for renewable energy companies. Solar and wind power are
nowhere near as clean as their supporters like to imagine, but they
are not prone to the catastrophic failures that people are so afraid
of with nuclear power. Germany has already couched its transition away
from nuclear power in terms of establishing the country as a leader in
renewable energy, and there would be a huge incremental need for solar
panels and wind turbines if countries wish to replace nuclear-powered
generation without substantial fossil fuel power additions…..
http://www.thebull.com.au/articles/a/28220-the-end-of-nuclear-power:-a-boon-for-investors.html