“Solar vs. Nuclear”

Hey Influence Traders, 

The Biden administration wants the U.S. to be a carbon-free electricity producer by 2050.

On Wednesday, the administration announced that it wants close to 50% of that carbon-free energy production to come from solar power alone.

That’s a big jump, since just 3% of U.S. power is generated by solar today.

Is it possible to reach 100% green energy on the back of the sun?

Unlikely, if we don’t also embrace nuclear power.

Yes, nuclear has a long history of opposition in this country, but there are some forces at work that might loosen that opposition.

Going Solar

There is little precedent for such an expansion of solar capability, which would also require vast upgrades to the electric grid.

Like with many Biden plans, the devil is in the details — and he is short on those.

The Nuclear Option

Nuclear, on the other hand, currently accounts for about 20% of U.S. power production.

It is good, clean energy, but has historically faced opposition from a number of fronts because of 3 Mile Island and other problems.

But some forces are at work that might cause the administration to ignore that opposition.

First, even the most diehard on the left are starting to realize that 100% green has to include nuclear.

Next, Biden is a big union supporter, and the International Brotherhood of Electrical Workers and the American Nuclear Society are lobbying hard to ensure nuclear energy translates into clean energy jobs for working Americans.

The IBEW represents 775,000 electrical workers in various industries, including construction, utility and manufacturing, and the ANS represents over 10,000 nuclear engineers and scientists.

The unions want to not only preserve existing reactors but build new ones. They recently wrote a letter to the administration stating that, “climate change requires we do more than preserve existing reactors and correct market flaws, we must expand nuclear energy as well. … By building new reactors at old fossil fuel-fired power plants, President Biden can ensure reliable clean energy and high-paying jobs for working families across the country.”

The unions pointed out that American nuclear workers have the highest wages within the U.S. energy sector, earning an average of $47 per hour, and that the industry is also the most heavily unionized part of the U.S. energy sector and its most diverse, with women comprising 36% of the work force and people identifying as a racial and ethnic minority comprising about 34%.

Those are all big trigger points for this administration.

There are also practical issues. According to the Department of Energy, it would take 3 million solar panels — or more than 400 wind turbines – to provide the same power as a 1-gigawatt reactor.

Dominion Energy (Ticker: D) operates seven reactors in Virginia, South Carolina and Connecticut. The two Virginia plants provide power to nearly 900,000 homes, or about one-third of the state’s total electrical production, and 90% of Virginia’s carbon-free electricity.

Greenpeace and other environmental groups still plan on protesting, but the Virginia success could be a model for the rest of the country.

Uranium Play

One thing that moderate Dems, progressive and Republicans are starting to agree on is that nuclear energy needs to take a more prominent role in U.S. energy policy.

Progressives, in particular, are beginning to realize that their Green New Deal, carbon-free aspirations can’t be realized through wind and solar power alone.

That is why I’m putting Denison Mines Corp. (Ticker: DNN) into the Capitol Gains starting lineup. DNN is a Canadian uranium exploration, development and production company. In addition to uranium mining, DNN is diversified into coal, potash, and other projects.

More on this name in the days and weeks ahead.

Solar Plays

There are a number of potential solar options that we’re going to look at.

Sunrun Inc. (Ticker: RUN) is an American provider of residential solar panels and home batteries, which will score well in the retail market.

First Solar Inc. (Ticker: FSLR) is a manufacturer of solar panels and a leading global provider of comprehensive photovoltaic (PV) solar energy solutions. I like FSLR because it handles the entire supply chain from providing utility-scale PV power plants to finance, construction, maintenance and end-of-life. The company produces advanced thin-film PV modules that some consider the next generation of solar technologies. FSLR recently announced that it had broken ground on its third manufacturing facility in Ohio, which is scheduled to commence operations in the first half of 2023.

Invesco Solar ETF (Ticker: TAN) is a way to get a diversified solar play. The $3.6 billion AUM portfolio is spread over 49 global solar-related holdings.

Cutting Through the Noise for You,

Frank

 

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