The Surprising Second Act of America’s Nuclear Power

Just south of Harrisburg, Pennsylvania, on a narrow island in the Susquehanna River, an unexpected revival is underway. The Three Mile Island nuclear plant, infamous for its 1979 radioactive meltdown, is quietly preparing for a comeback. Within the next three to four years, the plant’s undamaged reactor could be up and running again, signaling a new chapter for American nuclear energy. [1]
 

A “Symbolic Return”

“It would be incredibly symbolic,” says Joe Dominguez, CEO of Constellation Energy, which owns the Three Mile Island reactor. The 1979 accident imparted “hard lessons” on nuclear safety, and now, the site could symbolize a renewed interest in nuclear power. The U.S. government is investing billions into the industry, tech visionaries like Bill Gates and Sam Altman are backing nuclear ventures, and public support appears to be on the rise.

Constellation, the nation’s largest nuclear plant owner, has experienced a dramatic turnaround. After years of seeking bailouts, its stock price has surged by 70% over the past year, possibly due to increased government support and rising payments to nuclear plant owners. Other industry players, such as Texas-based Vistra and Canada’s Cameco, are also benefiting from growing uranium demand.
 

A Critical Time for Nuclear Power

We believe the resurgence of nuclear power couldn’t have come at a better time. America’s 94 nuclear reactors currently provide 18.6% of the nation’s electricity, making them the largest source of carbon-free energy. However, nuclear’s share has been declining since the 1990s, and several plants were at risk of closing. Now, state and federal actions have saved multiple reactors from shutting down, and the Biden administration has announced plans to triple the nation’s nuclear capacity by 2050.

Electricity demand in the U.S. is soaring due to the rise of electric vehicles, data centers, and new factories, creating a scramble for reliable, carbon-free power sources. Unlike solar and wind, nuclear power offers consistent energy, making it an attractive option as the country pursues its climate goals.
 

Global Competition

While the U.S. struggles to kickstart new nuclear projects, other nations are moving ahead rapidly. China is constructing nearly 30 new reactors and approving more at a record pace, while France, Russia, and South Korea also have ambitious plans. In our opinion, this surge highlights the growing competition in the global nuclear race, raising concerns that the U.S., which once led the industry, may fall behind.
 

The Road Ahead

The path forward for U.S. nuclear energy is clear but challenging. Restarting and modernizing existing reactors could add up to 5% to the nation’s nuclear capacity over the next decade. However, achieving the government’s ambitious goals would require constructing about 200 new reactors—a monumental task that would demand significant investment, political will, and public support.

The future of nuclear power in America is at a critical crossroads. As energy demands soar and the drive to cut carbon emissions intensifies, the industry’s revival isn’t just timely—it could define the nation’s energy landscape for decades to come.

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.

*Please note Constellation Energy, Vistra Corp, and Cameco Corp. currently make up approximately 4.07%, 3.01% and 9.00% positions respectively in the NUKZ ETF as of 9/6/2024

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

Holdings are subject to change.

[1] Unless otherwise noted, all data sourced from: Avi Salzman, “AI, EVs, and Nuclear Energy: How the U.S. Electricity Market is Set to Change,” Barron's, September 8, 2024, https://www.barrons.com/articles/ai-evs-nuclear-energy-electricity-a4198583.

Risk Disclosures:

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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.

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