U.S. EIA Forecasts Nuclear Demand to Outpace Growth

Received an email this morning from a reader who referenced a uranium industry update from equities research analyst Rob Chang...so busy with the Technology Metals Summit in less than 1 week and counting, but thought a few lines were warranted...

The US Energy Information Administration has released the preliminary figures for its “Annual Energy Outlook 2012”. The data projects that total electricity consumption, including purchases from both electric power producers and on-site generators increases from 3,879 terawatt-hours (TWh) in 2010 to 4,775 TWh in 2035. This represents an increase of 23.1% in 25 years. The US EIA has also forecasts that the retracting use of coal as a fuel source will result in overall electricity generation from coal to fall to 39% by 2035 from 45% in 2010. The full “Annual Energy Outlook 2012” will be released later in the year.

Despite the Fukushima nuclear incident last year and Germany’s decision to shut down all of its nuclear power plants, the forecast suggests that nuclear power generation will increase 11%, from 807 TWh in 2010 to 894 TWh in 2035. Further, the EIA expects that nuclear generating capacity will increase from 101 gigawatts (GWe) to 115 GWe by 2025. This estimate is of particular importance as it highlights the need and importance of the US to have a domestic uranium supply or feed source. Based on these estimates, uranium basket companies are well positioned to benefit from this expected increase in demand to meet the US’ energy needs.