The Fukushima incident where the reactors were damaged by the tsunamis after the power supplies were lost in 2011 impacted the world nuclear power market. But now, Japan is going nuclear again and that is great news for uranium prices. An earthquake led to tsunamis that led to the Fukushima nuclear plant damage and core meltdown in Japan. It was almost a perfect storm and it rightly frightened the world that led Japan to shutter all its reactors and others to rethink their nuclear exposure. But Japan is back on line and it shows why Cameco uranium growth story has legs.
The Fukushima meltdown was awful, but it killed or even injured no one, whereas the tsunamis were a true disaster, killing more than 25,000 people and injuring many more. But the plant damage was handled relatively well, and only minor amounts of radioactivity was released to the surrounding environment. And, on some level, it was a good call for Japan to reexamine its nuclear power plans and make sure it had the right technology to safely run its nuclear fleet in the future. However, the country quickly found out that nuclear has a place at the electric table.
Without nuclear power, Japan had to import more carbon-based fuels like coal, natural gas, and oil to make up for the 30% of the island nation power nuclear once supplied. An island without many natural resources of its own importing enough fuel to replace 30% of its energy needs had the impact you might expect. Power prices went up. For example, utility fuel costs in Japan have basically doubled since before the Fukushima event. That, as you might expect, has led to large rate hikes on customers. In fact, the country has been pushed into a trade deficit, as the costs of its imports exceeded the revenues from its exports driven largely by the importation of fossil fuels. But it is not just the cost of electricity that is at issue. Before the nuclear shutdown, Japan was able to meet about 20% of its energy needs with domestic fuel sources. After the shutdown that fell to just under 6.5%. So the shutdown put the Japan energy security at risk, too. All of these reasons go into why Japan is turning its nuclear power plants back on. But the Japanese petri dish also provides a backdrop for the entire world. Germany should listen.
Managed & Built by I2M Consulting, LLC | © 2010-
