UBS Highlights Nuclear Power Renaissance

UBS examines a potential revival in the nuclear power sector. Analysts noted that for decades, nuclear energy faced skepticism from investors, regulators, and utility companies. However, this perception appears to have changed significantly.

Nuclear power is now viewed as a viable solution to rising electricity demand and climate change, offering low-carbon alternatives to replace fossil fuels. Energy security, particularly in reducing dependence on fossil fuel imports, is another critical factor, although geopolitical risks in the uranium supply chain remain a concern.

The recent announcement during COP28 to “triple nuclear energy capacity by 2050” is seen as an important, albeit symbolic, goal. Nuclear energy, recognized as a reliable low-carbon power source, can generate more continuous power than equivalent renewable sources, which are intermittent and often require more infrastructure.

UBS identifies two primary catalysts for ramping up nuclear capacity: substantial government support, similar to initiatives in China, and potential synergies with AI/data center developments. The bank predicts an increase of approximately 58-86 GW in nuclear capacity by 2030, with over half of these additions expected from China; this is significant compared to France’s current operational capacity of about 61 GW.

The report also highlights companies that could benefit from the nuclear industry, including CGN Power, CNNP, Constellation Energy, Korea Electric Power, IMI, Schneider Electric, Nuscale Power, Fluor, BHP Group, Spie, Rolls-Royce, and Centrica.