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Oct. 27, 2021, 9:08 a.m. EDT

Some big investors are backing nuclear energy, a potential savior to the energy crisis that’s gripping the world

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By Debbie Carlson

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“That means that the amount of waste that you’re producing volumetrically can potentially be a lot lower,” Gilbert says.

This type of uranium is being used in Triso fuel that some of the new designs use. Triso has a small amount of uranium surrounded by silicon and carbon-based materials and acts as a containment vessel itself. That coating makes it extremely difficult to be used in proliferation, too.

Another key difference is many of the newer systems are designed to shut down automatically with the need for human activity to ensure safety, which was one of the problems with Japan’s Fukushima, which had failures with its active systems.

Sustainability issues

Peter McNally, global sector lead for industrials materials and energy at Third Bridge, says that for some ESG (environmental, social and governance) investors, nuclear power is out of the question. However, he also points to the turmoil in the fossil-fuel energy markets as creating a security issue in itself.

“The security of fuel sources has become a key issue, as energy and power crises have gone global,” he says. “On that metric, nuclear power’s track record over the past decade has been excellent. Finally, with respect to its carbon credentials, nuclear competes with every low- and no-carbon source available.”

Garvin Jabusch, chief investment officer of Green Alpha Advisors, whose firm manages sustainable portfolios, acknowledges how divided sustainability investors are over nuclear and the need to decarbonize, adding that he isn’t completely against nuclear energy.

“I think the existing nuclear reactors should be allowed to run out their lifespans, because they’re there anyway,” he says, since they do produce carbon-free energy.

‘Deadly to life’

But he doesn’t think it’s good idea to build new ones, even with advanced designs, citing the common concerns with nuclear: spent fuel storage, potential for proliferation and costs.

“Sustainability encompasses more than just greenhouse gas emissions. Let’s not forget that these things require fuel that is deadly to life,” he says.

There are some advanced nuclear reactors that are looking to use spent fuel in their designs, and Jarbusch says that’s something he’d be interested in. “That would be a great way to both eliminate the waste of the existing stockpiles and generate a bunch of zero-carbon energy,” he says.

Regulations, funding

Regulatory updates may encourage ESG investors. Barclays says the EU taxonomy for sustainable activities, a classification system Europeans are developing, could bring “more clarity on nuclear’s role in the green transition, which may help build a stronger consensus among investors still unsure about the nuclear power sector from an ESG perspective.”

Dan Yurman, a nuclear-industry observer who blogs under Neutron Bytes, says the industry could use financing from ESG investors wanting to support carbon-free energy, but he’s not sure the industry is ready for these investors’ scrutiny.

“The biggest concern that these companies are going to have with ESG investors is verifying the data that they collected for their ESG reports,” he says. “Investors will say, ‘How do I know your data is any good?’”

The companies also face a stumbling block common for any small, private enterprise: Being able to do the extra due diligence that’s required by many ESG investors, Yurman says.

“They are just head over tea kettle to get the next round of funding, to get the product developed, to get through the regulatory burdens. ESG reporting is just not going to rise to the level of attention that it probably needs, at least not now. But it may in the future,” he says.

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