Concerns over greenhouse gas emissions from coal-fired electricity plants will see a rebirth of nuclear energy in North America and continue to drive the price of uranium to record highs, finds a new report by CIBC World Markets.
CIBC World Markets' April Monthly Indicators report notes that environmental opposition has already forced TXU, the largest utility in Texas, to scrap some 6,000 megawatts of planned new coal-fired capacity in favour of building as many as five new nuclear facilities.
"If you can't get coal-fired generating capacity licensed in Texas these days, where can you get coal plants built?" notes Jeff Rubin, Chief Economist and Chief Strategist at CIBC World Markets. "Coal-fired utilities find themselves the primary target of a tidal wave of greenhouse gas (GHG) legislation that is sweeping across state legislatures. Weaning American power consumers off cheap and abundant domestic coal supply is rapidly shaping up to be the frontline battleground of the carbon wars in North America.
With this rapid growth, Mr. Rubin states that finding enough uranium to power all those reactors is already becoming an issue. "Prices have more than doubled over the last six months and with utilities still needing to contract roughly a third of their uranium fuel requirements over the next five years, more and more are scrambling to lock in supplies." As a result, he predicts uranium oxide prices will hit US$140 per pound this year and US$160 per pound by late 2008 - more than triple the price of uranium last fall.
CIBC World Markets' April Monthly Indicators report notes that environmental opposition has already forced TXU, the largest utility in Texas, to scrap some 6,000 megawatts of planned new coal-fired capacity in favour of building as many as five new nuclear facilities.
"If you can't get coal-fired generating capacity licensed in Texas these days, where can you get coal plants built?" notes Jeff Rubin, Chief Economist and Chief Strategist at CIBC World Markets. "Coal-fired utilities find themselves the primary target of a tidal wave of greenhouse gas (GHG) legislation that is sweeping across state legislatures. Weaning American power consumers off cheap and abundant domestic coal supply is rapidly shaping up to be the frontline battleground of the carbon wars in North America.
With this rapid growth, Mr. Rubin states that finding enough uranium to power all those reactors is already becoming an issue. "Prices have more than doubled over the last six months and with utilities still needing to contract roughly a third of their uranium fuel requirements over the next five years, more and more are scrambling to lock in supplies." As a result, he predicts uranium oxide prices will hit US$140 per pound this year and US$160 per pound by late 2008 - more than triple the price of uranium last fall.
