Many of us grumble every time we get a bill from the electric company, but we shouldn’t. Actually, we should be happy because a bill means we are getting power. And worse than getting a high bill would be getting no bill at all due to a power outage. But if forecasts from industry experts are correct many of us could learn exactly what that’s like in the upcoming months.
Essentially, everything we use, buy, and need is powered by electricity – either directly or indirectly – and there’s no way a modern society can function without power.
That’s why a recent report from the North American Electric Reliability Corporation that estimates more than 300 million people in the U.S. and Canada could face power shortages in 2024 is very concerning. The report also found that demand for electricity is rising faster now than it has at any time in the past five years.
At The Touch Of A Button
Having the power we need was always an important issue, but it’s becoming even more so now because demand is growing so rapidly. “Electricity-hungry data centers and clean technology factories proliferating around the country are putting strains on the power grid,” reports The Washington Post.
And so are EVs, because even though sales appear to be slowing, their numbers are growing steadily. Also, the number of factories relocating from abroad to the States, the increasing need to power AI, and the extreme swings in temperatures that are straining our power systems are also boosting demand.
The Washington Post sums up the situation this way: “Vast swaths of the United States are at risk of running short of power.” This means the economy will need great quantities of additional power. How long will it take until this becomes available? How much will it cost and what happens if it’s unavailable? These are very real questions that political leaders and businesses are grappling with. As they search for and implement solutions, there will be new and huge investment opportunities along the way.
The Next Market Mania?
Larry Fink, Chair and CEO of BlackRock, an investment company with over $10 trillion in assets, is certainly one of the movers and shakers on The Street. Several weeks ago, Fink spoke at a World Economic Forum event about the next AI-like craze.
“I do believe that to properly build out AI we’re talking about trillions of dollars of investing,” he said. Data centers today already need as much power as some cities, and in the relatively near future this is expected to rise by a multiple.
Fink related that the head of one tech company told him their data centers currently require about five gigawatts of power. That executive added that by 2030, this number will soar to 30 gigawatts.
Then Fink asked the Forum audience questions that probably everyone was already wondering about. Where is all that power going to come from? Are we going to take it off the grid? And what does this mean for already elevated energy prices?
Although Fink didn’t elaborate on the answers, he did talk about something the audience (and certainly many others) was very interested in hearing: The surge in demand for more power presents a huge investment opportunity. “The world is going to be short power – short power,” he repeated for emphasis. “And to power all the data companies, you cannot have intermittent power like wind and solar provide. You need dispatchable power because they can’t be turned off and on.”
Nuclear To The Rescue?
Fink didn’t specify exactly what kind of power he was thinking of but, more likely than not it was nuclear. Just several weeks ago, the industry appeared to get an unofficial yet important endorsement. Jigar Shah, director of the Energy Dept.’s Loan Programs Office, told Bloomberg that the federal government is expected to continue restarting shuttered nuclear power plants in the coming years.
Actually, that’s already happening. According to Zero Hedge, “In March, Shah’s office approved a loan to Holtec International, a company that supplies a variety of equipment and systems to the energy industry, that would reopen the Palisades nuclear plant in Michigan. This is the first nuclear power plant to be reopened in the US, setting a precedent for atomic energy to make a triumphant comeback.” Palisades could begin producing power in the second half of 2025.
Shah also said something that was of particular interest to investors. “A lot of the power companies with nuclear power plants that have recently shut down could turn them back on, and they’re gaining the confidence to do that.”
Fastest Growing Energy
Nuclear power has become the world’s fastest growing energy source, according to world-nuclear.org. Currently, the U.S. uses the most nuclear energy, followed by China, France, and Russia. The U.S. Energy Information Administration says 18.6% of U.S. electricity is generated by nuclear. In addition to the obvious reasons, nuclear power is also getting a great deal of attention because it produces almost no greenhouse gas emissions.
Despite the important benefits of using clean energy produced by nuclear power, there is also a downside, and that’s the cost of building a plant. The Cato Institute compared the costs of building a new nuclear power plant to conventional ones and “found that in almost all cases, it is more economical to build a natural gas facility.” Neither the construction nor the design makes building one so expensive, but rather the necessary safety-related components, IFP.org explains.
Fifty-three nuclear reactors are currently being built around the world, but only two of them in America, a surprising development considering that the U.S. used to be the world’s leader in developing nuclear energy. And those two facilities are not even new projects, but rather just expansions of existing facilities.
New nuclear power plants are certainly under consideration, but they won’t be constructed overnight. A new nuclear-powered facility could take over five years to build, compared to natural-gas powered plants that usually are built in just two years, according to the World Nuclear Association.
Nuclear powered facilities are not everyone’s first choice of power, but it is one that a growing number of people and companies are turning to, even if reluctantly. And that’s why the future of nuclear is looking better these days than it has in years.
Sources: bloomberg.com; ifp.org inl.gov; rstreet.org; spectrum.iee.org; theweek.com; washingtonpost.com; world-nuclear.org; zerohedge.com
Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.
