Is the U.S. Finally Embracing a Pragmatic Approach to Nuclear Energy?

Nuclear energy has long suffered from what we believe is an undeserved bad reputation. Addressing safety concerns at nuclear plants and improving waste disposal practices have been focal points in the ongoing discourse surrounding nuclear energy, often prompting the closure of plants nationwide. However, recent actions, including funding for a nuclear plant reopening in Michigan, and tax credits, may signal a renaissance for nuclear energy in the U.S.

Historic First: Funding a Restart

In March 2024, the U.S. government provided a $1.5 billion loan to energy technology company, Holtec International, to restart the shuttered Palisades nuclear plant in Michigan. Holtec had previously bought the plant with plans to decommission it.

This would be the first reopening of a nuclear power plant in the U.S. and signals a potential turnaround in U.S. policy. The plant could resume operations by the end of 2025.[1]

More to Come?

Jigar Shar, director of the U.S. Energy Department’s Load Program Office noted that there are “a couple of other nuclear plants that we probably should, and can, turn back on.” He did not specify which nuclear power plants could be reopened.[2]

Even in California, Attitudes Towards Nuclear Energy May Be Turning

California, often a bellwether for U.S. climate policy, may also be softening its stance on nuclear energy. State officials recently decided to extend the life of the Diablo Canyon nuclear power facility from 2025 to 2030. The facility’s owner indicated that it may be interested in keeping it running longer.[3]

U.S. Policy Has Become More Supportive of Nuclear

The U.S. Inflation Reduction Act (IRA), enacted in 2022, provides tax credits to help preserve the existing fleet of nuclear plants in the U.S. It also includes tax incentives for the development and deployment of advanced nuclear reactors and the development of a domestic supply of uranium.[4]

Additionally, as we noted in a recent email, the U.S. government has provided billions of dollars to advanced research and development of nuclear energy.

Why the Shift?

Nuclear power produces no greenhouse gas emissions during operation. Given the projections for increased electricity demand, nuclear power may complement green energy in the coming transition to cleaner energy.[5]

Potential Investment Opportunity

Recent U.S. policy shifts could fuel a surge in nuclear energy production, offering a potential boon to firms within the sector.
 

How May Investors Gain Exposure to Companies in the Nuclear Energy Sector?

The Range Nuclear Renaissance Index ETF

The Range Nuclear Renaissance Index ETF (NUKZ) seeks to track the performance, before fees and expenses, of the Range Nuclear Renaissance Index. The index aims to track the performance of a portfolio of stocks that are involved in the nuclear fuel and energy industry.

NUKZ may be an attractive vehicle to gain exposure to companies in the nuclear energy industry.

For a full listing of NUKZ holdings, please click here.

[1] Durden, Tyler, In Historic Reversal, US To Restart a Shut Down Nuclear Power Plant For The First Time Ever, ZeroHedge, 3/28/24
[2] Durden, Tyler, “A Lot Of Shuttered Nuclear Power Plants Could Be Turned Back On”, Fed Energy Official Says, ZeroHedge, 4/29/24
[3] Wade, Bill, Once Unthinkable Nuclear Plant Revival Is A Reality In US Shift, Bloomberg, 4/29/24
[4] Inflation Reduction Act Keeps Momentum Building for Nuclear Program, Office of Nuclear Energy, energy.gov, 9/8/22
[5] Durden, Tyler, “A Lot Of Shuttered Nuclear Power Plants Could Be Turned Back On”, Fed Energy Official Says, ZeroHedge, 4/29/24

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Carefully consider the Fund's investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund's full or summary prospectus, which may be obtained by visiting www.rangeetfs.com/coal. Read it carefully before investing or sending money.

Investing involves risk, including possible loss of principal. There is no guarantee the Funds will achieve their stated investment objectives.

Investments in the energy industry are subject to significant volatility due to changes in commodity prices. Additional risks include changes in exchange rates, government regulation, world events, economic and political conditions in the countries where energy companies are located or do business, and risks for environmental damage claims.

The Fund is non-diversified. Its concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors.

Nuclear companies may be subject to substantial government regulation and contractual fixed pricing, which may increase the cost of doing business and limit the earnings of these companies. A significant portion of revenues of nuclear companies depends on a relatively small number of customers, including governmental entities and utilities. As a result, governmental budget constraints may have a material adverse effect on the stock prices of companies in this sub-industry.

International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Investments in smaller companies typically exhibit higher volatility.

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