Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Commodities»This Top Energy Stock Sees Limitations for a Nuclear Energy Resurgence
    Commodities

    This Top Energy Stock Sees Limitations for a Nuclear Energy Resurgence

    October 27, 20245 Mins Read


    NextEra Energy doesn’t expect nuclear power to play a starring role in the country’s energy resurgence.

    Nuclear energy is seeing a resurgence in interest due to an expected surge in power demand over the next two decades. Microsoft is helping lead the charge by signing a deal to buy all the future power produced by a nuclear power-generating unit that Constellation Energy plans to restart. The tech titan needs the emissions-free energy to power its data centers and support its cloud computing and artificial intelligence (AI) operations.

    Many believe this deal could help jump-start the country’s dormant nuclear energy industry. While nuclear power plant operator NextEra Energy (NEE -1.67%) believes this energy source will play a role in helping meet the country’s power needs, it sees some practical limitations.

    Powering a demand surge

    As a leading producer of all forms of power, including nuclear, NextEra Energy is as dialed into the industry as anyone. The company believes the U.S. power industry is entering a “period of unprecedented growth in power demand,” according to CEO John Ketchum on the utility’s third-quarter conference call. He pointed out that “there are forecasts for an approximate six times increase in power demand growth in the next 20 years versus the prior 20.”

    Several catalysts are driving that robust outlook, including data centers. Ketchum said their “power demand alone is expected to increase substantially, adding approximately 460 terawatt hours of new electricity demand at a compound annual growth rate of 22% from 2023 to 2030.”

    Because of that, the country will need to build a tremendous amount of additional power-generating capacity. Data centers, in particular, need baseload capacity because they operate 24/7/365 and require uninterrupted power. Nuclear is ideally suited to meet this need because it’s baseload and emissions-free, which is important for tech companies in reaching their climate goals.

    Nuclear’s role

    Because NextEra Energy operates several nuclear power plants, many often ask about its view on the future of this energy source. On the call, Ketchem discussed what he sees ahead for nuclear energy. He stated, “Nuclear will play a role, but there are some practical limitations.”

    First, he noted, “There are only a few nuclear plants that can be recommissioned in an economic way.” That includes its Duane Arnold nuclear plant in Iowa, which it’s looking to restart. However, “even with a 100% success rate on those recommissionings, we would still only meet less than 1%” of the expected 900 gigawatts of new power capacity needed by 2040.

    He further noted that:

    Existing merchant nuclear generation is also limited in its ability to meet that demand, given there are only approximately 20 merchant nuclear plants in this country. That nuclear capacity is also not evenly spread across the U.S. And is not in many places. For example, there are only two merchant nuclear plants west of the Mississippi. Nuclear plants across the country are already serving existing demand. So even if they are contracted by specific customers, new resources need to be built to meet new demand.

    Ketchum then turned to the subject of building new nuclear capacity to meet the additional power demand, stating, “And alternatives such as new utility-scale nuclear and SMRs [small modular reactors] are unproven, expensive, and again, not expected to be commercially viable at scale until the latter part of the next decade.”

    In other words, they’re not a near-term option to meet the demand growth coming over the next several years. While they could be an option in the next decade, nuclear energy would need to be price competitive with renewable energy plus storage, which is growing cheaper as it scales.

    Given nuclear energy’s practical limitations, NextEra Energy doesn’t believe it will be a major player in supporting the country’s growing power demand. Instead, it’s much more optimistic about the future of renewable energy.

    Ketchum noted on the call that “Forecasts are projecting a tripling in renewables growth over the next seven years compared to what we’ve seen over the prior seven.” He believes no company is in a better position to capitalize on this demand growth than NextEra, given its scale and experience in the sector.

    Playing a supporting role

    NextEra Energy expects power demand to surge over the next two decades. It sees nuclear energy playing a limited role in helping meet that need, given the practical factors that will likely hold it back. Because of that, the company is much more bullish on renewable energy. As a leader in that field, NextEra Energy expects to deliver robust growth in the coming years. That makes it a great stock to buy to capitalize on the country’s surging power demand.

    Matt DiLallo has positions in NextEra Energy. The Motley Fool has positions in and recommends Constellation Energy, Microsoft, and NextEra Energy. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    La recherche s’attaque au calcul du bilan carbone de l’IA

    Commodities

    Quand le métal devient métaphore de l’élévation : le 71e congrès des Compagnons serruriers du Devoir a réuni plus de 500 personnes à Nîmes

    Commodities

    De Nantes à Clisson, les micros festivals de métal dans l’ombre du Hellfest

    Commodities

    cette découverte pourrait permettre de doubler la durée de vie des voitures électriques

    Commodities

    Journée «portes ouvertes» au centre de formation des Bâtisseurs

    Commodities

    Vivo Energy Maroc dévoile sa station-service Shell, certifiée HQE ‘Excellent’

    Commodities
    Leave A Reply Cancel Reply

    Top Picks
    Property

    Trump lawyers can subpoena communications between Engoron and NYC real estate lawyer – NBC New York

    Investments

    One of the largest investments in Guyana’s history on track for 2025 start-up

    Commodities

    New Peloton Class Collection: The Metal Collection

    Editors Picks

    10 Best Cryptocurrency Affiliate Programs of 2024

    October 18, 2024

    Arizona Prop 312: The Nationwide War Over Homelessness Comes to the Arizona Ballot

    October 25, 2024

    Les cours du pétrole chutent sous le double effet des nouveaux droits de douane et… de l’OPEP

    April 3, 2025

    Girl Scouts earn Silver Award pins | News, Sports, Jobs

    October 12, 2024
    What's Hot

    Spotlight on Newmark Group Inc

    August 15, 2024

    Best NJ county for retirement also one of the most beautiful

    July 26, 2024

    India to receive over $600 billion in alternative investments by 2028, say experts

    March 11, 2025
    Our Picks

    Drug kingpin back behind bars after £17m property empire seized. | UK | News

    April 6, 2025

    Agricultural research is also a woman’s business

    February 25, 2025

    Transcript : Pro Real Estate Investment Trust, Q1 2025 Earnings Call, May 15, 2025

    May 15, 2025
    Weekly Top

    How To Put $100 In Your Retirement Fund Each Month With Cintas Stock

    May 31, 2025

    L’or réaffirme le statut de sécurité, mais le chemin de Bitcoin peut être plus lumineux: les analystes

    May 31, 2025

    Fake Uber Driver in London Drugs US Tech Investor with Cigarette, Steals £96K in Cryptocurrency

    May 31, 2025
    Editor's Pick

    Monterey County’s 2023 crop value at $4.35 billion, down 6.14% from previous year

    July 17, 2024

    NorthWestern Energy defends committee membership, closed meetings • Daily Montanan

    August 13, 2024

    New Cryptocurrency Releases, Listings, & Presales Today – Rivalz Network, Sixpack Token, RZUSD

    February 22, 2025
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.