A report from the Oxford Research Group says that worldwide electricity demand is expected to increase by 50% over the next 25 years. It also forecasts that the world will need to build 3,000 new nuclear reactors — one every week for the next 60 years — to meet that growing need.
According to the World Nuclear Association, there are 32 under construction, 74 on order or planned, and 230 proposed. By 2013, 48 additional nuclear power plants, producing 43.5 gigawatts of energy, should go into service. And over the next 10 years, an additional 100 plants will be built, with 40 of them in Asia.
All of those new nuclear power plants, of course, are going to need uranium. Lots of it. Here’s the math: A typical nuclear plant requires a first fill of around 600 tons of uranium and then consumes around 200 tons each year thereafter.
That’s on top of the 80,000 tons of uranium the world’s 440 nuclear reactors already consume. Next year, uranium demand is estimated to hit 83,000 tons.
Get this: According to the Uranium Information Centre, the world only produced 46,720 tons of uranium last year. The shortfall was covered by inventory stockpiles, mostly from reprocessed Russian nuclear weapons.
We’re talking about a huge increase in the demand for uranium AND a severe production shortage. That is, of course, extremely positive news for uranium prices and uranium producers.
What’s This Got to Do with China? Everything!!
China has two monumental problems staring it in the face …
Number one, China desperately needs all the energy it can get its hands on to fuel its breakneck economic growth. FACT: China is building a new coal-fired power plant every week in a desperate attempt to keep pace with industrial demand.
Number two, China is suffering from horrendous air pollution that is so bad that it is estimated nearly a million people die each year from it. Whenever I travel to China, I don’t even bother to request a high-floor hotel room anymore because you can’t see anything through the smog-choked air.
Think about this: Nuclear power plants produce ZERO greenhouse gases while a typical coal-fired power plant spews out 3.7 million tons of carbon dioxide into the air each year along with tons of metal-laden ash.
The only practical solution to two these two problems is nuclear energy. Lots and lots of it.
China currently has 11 working reactors, which generate 8.8 gigawatts of electricity and 1.5% of China’s total power capacity. Most of mainland China’s electricity is produced from coal (80%) and hydro power (18%).
The Chinese government has stated that it plans on increasing its nuclear energy production to 4% and generating 40 gigawatts of nuclear power by 2020, and another three to fourfold increase to 160 gigawatts by 2030.
China is going to reach that goal by building like crazy. The Eleventh 5-year plan calls for fourteen nuclear plants to be built:
On average, China is going to build two nuclear power plants a year.
As you can see, it won’t be long until China’s uranium needs will skyrocket as these new nuclear reactors come on line. Plus, China will have to accumulate a strategic reserve of uranium to protect it from any supply disruptions.
Plain and simple, the demand for uranium is going to go through the roof because of China.
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