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Nuclear vs The Energy Market
The global energy market is undergoing a seismic shift as nations strive for cleaner, more reliable, and cost-effective power sources to meet power demand that is set to grow for the first time in two decades. Among these, nuclear energy is experiencing a resurgence, offering distinct advantages over other energy forms. In the following sections we'll explore what makes nuclear such an attractive option for meeting growing power demand, and why investors should consider gaining exposure to this trend via nuclear energy ETFs.
Power Output and Reliability
All energy sources have what's known as a 'capacity factor. This is the average actual output compared to the maximum possible output and is a measure of stability of power. Nuclear reactors have a capacity factor of around 93%. This means they typically output 93% of the total energy they are capable of delivering. Wind, in comparison, only has a capacity factor of 36%, whilst solar drops to 25%. Even when considering non-renewable sources like coal or natural gas which are historically seen as stable sources of energy, their capacity factors are only around 49% and 54% respectively.
Source: US Energy information administration
Land Use and Carbon Emissions
When it comes to land use, nuclear energy is remarkably efficient. A single nuclear power plant can generate the same electricity as hundreds of wind turbines or thousands of solar panels while occupying a fraction of the space. Land-intensive renewable projects require extensive infrastructure, which can disrupt local ecosystems and landscapes. 
Source: Our World in Data
Additionally, nuclear energy’s life-cycle carbon emissions are significantly lower than fossil fuels and even some renewables when considering resource extraction, manufacturing, transportation, and waste management. According to studies, nuclear power has an emissions intensity of around 12 gCO2/kWh, compared to natural gas at 490 gCO2/kWh and coal at 820 gCO2/kWh.
Source: International Atomic Energy Agency
Nuclear energy stands out as providing stable, clean and uninterrupted base load power that uses little land. This is in stark contrast to fossil fuels and variable renewables like wind and solar. These benefits of nuclear power have been well known since the creation of the industry in the 1960s. Yet several high profile accidents in the 1980s put brakes on developments. There are forces at play today that could see nuclear regain its position creating a compelling long term investment opportunity.
Economic Drivers Fuelling Nuclear Energy’s Comeback
Cost Competitiveness and Technological Innovation
Advancements in technology are making nuclear a more attractive investment, especially through nuclear energy ETFs like the Tema Electrification ETF (VOLT) . Small Modular Reactors (SMRs), passive safety systems, and innovative reactor materials enhance efficiency and cost-effectiveness.
SMRs, for example, offer a more flexible (unlike conventional reactors they can be turned off and on) and scalable alternative to traditional large-scale reactors, reducing capital investment and real estate use while maintaining high efficiency. Prototype SMR’s are being constructed and developed by Terra Power, founded by Microsoft founder, Bill Gates, and NuScale (SMR), a subsidiary of Fluor. While commercial availability of SMR units is not expected for 10 years, the amount of investment and intellectual capital being committed in this area is expected to drive down costs and make nuclear a more accessible solution on the global marketplace.
It is not just the private sector that is making nuclear an economically viable solution. The public sector is also getting involved with substantial initiatives. For example, the Biden Administration put in place plans to triple nuclear power capacity by 2050. This is expected to come from building new reactors, upgrading existing facilities and restarting mothballed plants. A recent example is the Palisades nuclear power plant in Michigan, expected to restart by October 2025 following $2.8bn of government investment. The incoming Trump administration has telegraphed even more support for nuclear to supply electricity to data centers and factories. Nuclear power enjoys bipartisan support, following the enactment in July 2024 of the new powers for the US Nuclear Regulatory Commission to regulate everything from new technologies and fuels.
Job Creation and Economic Growth
Nuclear power plants are far more than electricity generators—they’re catalysts for robust economic development. From the initial construction phase through years of sustained operation, nuclear projects create thousands of high-paying jobs in fields such as engineering, manufacturing, and research. Plant operations also require diverse expertise, such as safety management and reactor maintenance to cutting-edge R&D.
These positive economic impacts ripple out far beyond the plant itself. Over the typical 40-60 life of a reactor, local communities experience an injection of commercial activity as they welcome the new plants works to the area. In turn, the increased tax revenue this all brings results in more funds that can be reinvested into critical public services, education, and infrastructure.
New technology and economic factors are creating a potentially compelling investment opportunity in nuclear energy ETFs, like the Tema Electrification ETF (VOLT). These are overcoming a long held aversion to nuclear energy after several accidents, most notably Chernobyl and, most recently, Fukushima. This is changing. Major companies, like Microsoft, are embracing nuclear underwriting this source of energy. More broadly, faced with rising demand and a need to transition energy source, governments and companies are waking up to what could be the beginning of a new nuclear renaissance.
Environmental Benefits of Nuclear Energy
Low Carbon Footprint
Unlike fossil fuels, which pump out significant volumes of CO2 and other harmful chemicals every year, nuclear energy hardly produces any greenhouse gases. In fact, it's been estimated that if fossil fuel plants had replaced nuclear energy since the 1970s, there would be an extra 60 gigatons of CO2 emissions in our atmosphere.
Sustainability and Recycling
Advanced fuel technologies—such as breeder reactors—can extend the life of nuclear fuel, in some cases creating more fuel than they consume. Technologies like these are adding another feather to nuclear bow by making them far more sustainable. Not only that, it reduces the waste produced by the facility thus reducing a further concern around nuclear energy.
Another key consideration is the sheer volume of uranium deposits that are believed to exist. Current estimates suggest there could be global reserves that will last for centuries. Coupled with new extraction methods that are continuously improving, it's unlikely we'll be running out anytime soon.
But this level of sustainability and longevity is only really thrown into sharp contrast when you consider the more conservative estimates for oil reserves is only 57 years. Faced with such potentially short timescales, finding new, stable energy sources is critical.
Addressing the Nuclear Waste Myth
Contrary to popular belief, nuclear waste is highly regulated and safely managed. The actual volume of high-level waste is small, and advanced fuel cycles further reduce its hazardous lifespan. The perception of nuclear waste as an insurmountable problem is largely outdated—modern storage solutions and technological advancements ensure its safe containment.
In contrast, coal plants emit toxic pollutants with far less oversight. Studies have shown that coal power plants release more radiation into the environment than nuclear power plants due to the natural radioactivity of coal ash. This makes nuclear energy a safer alternative when considering overall waste and environmental impact.
Nuclear power in the 1980s and 90s was burdened by the “not in my backyard” or NIMBY movement. Nuclear accidents are infrequent but when they happen, they have devasting effects on lives and the environment as evidenced by melt downs at Three Mile Island in the US, Fukushima in Japan and Chernobyl in the Soviet Union. The resulting anti-nuclear movement has meant nuclear power, as a component of global energy supply, decreased to 10% presently from 17% in 1996.
The Future of Nuclear Energy in the Clean Power Transition
The next frontier in nuclear energy includes Small Modular Reactors (SMRs) and other fission technologies and potentially fusion power, which promise enhanced efficiency and safety. Companies like Okla, backed by Open AI pioneer Sam Altman, are building fast fission reactors that can generate 15 MW of power for a decade without refuelling. SMRs are designed for modular deployment, allowing for cost-effective scalability. Meanwhile, nuclear fusion—a long-sought breakthrough—could revolutionize energy generation by providing virtually limitless clean power with minimal waste and no meltdown risks.
Additionally, nuclear and renewable energy collaborations are emerging, integrating nuclear baseload power with intermittent renewables like wind and solar. Hybrid energy systems combining nuclear with renewables can create a more resilient and balanced grid, reducing dependence on fossil fuels and accelerating the clean energy transition.
Source: World Energy Report 2024
Nations around the world, including the U.S., China, and France, are investing heavily in nuclear research and deployment, underscoring its importance in achieving global climate goals. There are currently 63 nuclear reactors under construction, the highest level since 1990. As new policies and market mechanisms incentivize low-carbon energy, nuclear is poised to be a major player in the transition to sustainable power.
Conclusion
Nuclear energy is reclaiming its place as a cornerstone of the clean energy revolution. Major companies, like Microsoft and Amazon, are placing their faith in nuclear as a source of power for the technological revolution. With unmatched reliability, economic incentives, and environmental benefits, nuclear power is proving itself as a long-term investment opportunity. As the world pivots toward carbon neutrality, nuclear energy stands as a powerful, sustainable solution for the future.
By embracing cutting-edge nuclear technologies, leveraging government incentives, and addressing public concerns around waste and safety, investors in nuclear energy ETFs and policymakers can unlock nuclear’ s full potential in the global clean energy landscape.
