Germany just pulled the plug on its last three nuclear reactors… what does this mean for uranium sentiment and ASX stocks?
Despite the energy crisis, Germany has decided to end its 60-year history with nuclear power, shutting down the last three reactors (Emsland, Isar 2 and Neckarwestheim) in the country on Saturday.
It’s a controversial move, one that is backed by German Chancellor Olaf Scholz and is part of the country’s long-term green-energy goals as it transitions towards renewable energy sources.
German scepticism towards atomic energy has run deep following the Fukushima disaster in 2011 when Angela Merkel made the decision to call it a day on all nuclear reactors by 2022.
Since then and for nearly 20 years, the German government has been phasing out nuclear power, but Russia’s invasion of Ukraine put everything into question last year and forced Germany to extend the runtime of three remaining plants to support the electricity system.
Opponents claim the nuclear technology confuses the country’s path towards climate neutrality by 2045 while supporters believe the low-carbon energy source delivers energy reliably at a time when wind and solar PV cannot yet fully support the country’s electricity needs.
Interestingly, the majority of German citizens support the continued operation of the plants with a recent YouGov poll showing 65 per cent of people were in favour of leaving the power plants running. A mere 26 per cent of people surveyed supported the phase-out.
Stockhead sat down with experts in the field to ask what sort of impact this will have on the wider uranium market as well as ASX uranium stocks.
Valor Resources (ASX:VAL) is exploring for uranium across four Canada-based projects with drill ready targets and a busy schedule of exploration work planned for 2023.
VAL executive chairman George Bauk says the news might not shake up uranium demand but will surely place doubts in the minds of investors given Germany is such a powerhouse in the industrial world.
“People tend to look to big nations around the world, like Germany, to see what they are doing as they form an important part of the socialisation of big themes.
“At the moment I think there are bigger issues facing ASX uranium companies in general such as a definite response to inflationary pressures and banks collapsing in recent months, but any country that leaves uranium out of the mix will raise questions,” he says.
“This won’t have a long-term impact on demand, but its messaging will mark a dent and strengthen the case for those sitting on the fence or looking for reasons as to why they don’t want to be part of the nuclear mix.”
Bauk says political issues such as the risks associated with uranium and reactors being so close to conflict areas might have something to do with underlying sentiment issues in Germany, but the positive news out of all of this is that the clean energy thematic is here to stay.
“The underlying theme is here now and over time when people do the sums on how much lithium and uranium and copper we are short on, that is when commodities are really going to come into the spotlight.
“We’ve got this growing need over the next 30 years to clean our act up, we just need global market enthusiasm and prices to continually strengthen.”
GTI Energy (ASX:GTR) recently defined a maiden Inferred resource of 1.66Mlbs U308 at its Great Divide Basin project in Wyoming, USA, setting it on course towards defining 10Mlbs of ISR amenable uranium at the project.
GTR executive director Bruce Lane echoes a similar response to Bauk.
“Having only a few reactors shut down out of about 450 reactors globally should have no discernible effect based on fundamentals,” he says.
“Especially when China is building over ten reactors a year on its own.
“The US, for example, has just signalled via the recent DOE Lift Off report that it wants to triple its nuclear power output from 100GW (from 92 reactors) up to 300GW,” he says.
It is an interesting move to make on Germany’s on behalf, given many countries are turning towards including nuclear energy into their energy mix.
“The rest of the world including China, the US, India, Japan, South Korea, Russia, and France etc is getting on with installing as many reactors as possible as fast as they can, including SMRs (small modular reactors),” Lane explains.
“The stance taken by Germany, and Australia for that matter, on nuclear power continues to be a bit baffling particularly when their power prices are so high, and their air quality is so bad.”
Juniors explorers include the likes of Uvre (ASX:UVA) based in Utah, USA within the well known uranium and vanadium district of the Uravan belt, Kingsland Minerals (ASX:KNG) who just defined an Inferred mineral resource exceeding 5 million pounds of U308 at the Allamber project in the Northern Territory, and Basin Energy (ASX:BSN) with an interest in three highly prospective projects in Canada’s Athabasca basin.
At Stockhead we tell it like it is. While Valor Resources, GTI Energy, Uvre, Aura Energy, Kingsland Minerals, and Basin Energy are Stockhead clients, they did not sponsor this article.