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In this week’s Investment Insights… 1. Nuclear’s Comeback: It’s emerging as the go-to solution for reliable, low-emission power, with tech giants and even environmentalists jumping on board. 2. Unstoppable Energy Demand: The surge in AI, EVs, and crypto is straining energy grids to their breaking point, making nuclear critical for long-term stability. 3. Huge Investment Opportunity: With strong government backing and soaring uranium demand, the nuclear sector presents a rare, long-term chance for significant investment gains. |
We stand on the brink of an unprecedented energy revolution.
The 21st century has ushered in technological advancements at a pace we’ve never seen before.
Over the past century, energy use has surged, starting with electricity in the late 19th century.
Innovations like radio, household appliances, and computers further increased demand, allowing us time to build a reliable energy infrastructure.
Source: IEA
Now, we’re facing a similar energy demand surge, but in a much shorter time.
Electric vehicles are hitting the roads in record numbers, cryptocurrencies are reshaping finance, and artificial intelligence is becoming integral to businesses and daily life.
Last year, the U.S. invested over $300 billion in clean power and electrified transport, a record for the clean economy and a $50 billion increase from the previous year.
To put that chart into perspective, it shows:
- 22% Year over Year growth in overall US energy transition investment.
- A 2:1 ratio of energy transition financing relative to fossil fuel financing.
- Yet from 2024 through 2030, investment must grow by over 3.5x to be in line with Net Nero scenarios.
Globally, investment in renewable energy hit $623 billion.
But to be on track for COP28 and Net Zero goals, investment needs to be $1 trillion a year.
Where is all this explosive growth coming from?
A Tsunami of Energy Demand
1. Artificial Intelligence: The New Energy Guzzler
Artificial intelligence (AI) is transforming industries—from healthcare to finance, from manufacturing to entertainment. But AI’s impressive capabilities come with a hefty energy bill.
- U.S. data centers, the backbone of AI, consume about 4% of the nation’s electricity.
To put it in perspective, all U.S. consumer electronics—computers, smartphones, tablets—use about 5%. And this is just the beginning.
Since the launch of ChatGPT in November 2022, the demand for AI services has exploded. Cities are feeling the strain:
- Oregon has doubled its energy forecast for the next five years due to new data centers.
- Chicago reports a 900% increase in energy demand from data center expansion.
- Georgia anticipates a 16-fold increase in electricity demand over the next decade.
2. The Electric Vehicle Surge
Electric vehicles (EVs) are no longer a novelty—they’re the future of transportation. Since 2018, EV sales have skyrocketed sixfold. In the last year alone, there’s been a 35% surge in new EV registrations.
States like California have set ambitious targets: by 2035, all new cars sold must be electric.
But here’s the challenge. California’s energy providers anticipate needing over 70% more electricity to power these vehicles.
- If the entire U.S. fleet goes electric, we would need to produce 20-50% more electricity nationwide.
Our current grid isn’t built for this. Rolling blackouts and energy shortages could become the new normal unless we act fast.
3. Cryptocurrency’s Energy Appetite
Beyond the financial headlines, there’s an often-overlooked aspect: the immense energy required for crypto mining.
- In 2023, Bitcoin mining consumed 121 terawatt-hours of electricity. That’s equivalent to the entire energy consumption of the Netherlands.
Cryptocurrencies now use more energy than all the world’s data centers combined.
As crypto adoption grows, so does its carbon footprint, unless we find cleaner energy sources.
Renewable Energy: Close, but Insufficient to meet Demand
Tech companies’ power needs are skyrocketing.
Efficiency gains in computing have reduced per-unit energy use, but more units are being produced. Leading to larger, more efficient data centers with increasing power demands.
From 2020 to 2023, Amazon, Meta, Microsoft, and Google saw an 81% rise in electricity consumption.
The Power Source
Renewable energy sources like wind and solar are essential for a net zero world, but they’re not scaling up quickly enough to meet this surging demand.
- Currently, renewables provide only 13% of the United States’ energy consumption.
Despite $4.1 trillion invested in renewables over the past 20 years, fossil fuel consumption has outpaced renewable energy growth.
The intermittency of solar and wind-solar panels don’t work at night, and wind turbines need wind—means they can’t provide a stable, always-on power grid.
While crucial to go net zero, renewables are not scaling quickly enough to meet the growing energy demand.
The Nuclear Age is Here
Nuclear energy, often misunderstood and underestimated, is a high-capacity, low-emission solution to today’s energy challenges.
It provides steady, weather-independent power and is undergoing a renaissance in the U.S. thanks to safer, more efficient modern reactors.
That’s why major banks and tech companies are going all-in on nuclear power.
In fact, Microsoft just signed the largest carbon free Power Purchase Agreement for single project, locking up enough electricity for 20 years to power 700,000 homes.
These types of headlines even 12 months ago would be unfathomable.
And Microsoft isn’t alone. Earlier this year, Amazon structured a $650 million deal to power a data center adjacent to a nuclear reactor.
So Many Investment Opportunities…
Government incentives and streamlined regulations are fueling a nuclear energy resurgence, even winning support from environmental groups.
For investors, this means a golden opportunity.
Uranium demand is set to soar, driving growth across the entire nuclear supply chain.
Our Special Situations team will guide you through key investment strategies and emerging technologies to capitalize on the nuclear comeback.
Regards,
Marin Katusa
P.S. This Wednesday, Oct 2nd, we’re releasing a double issue of Katusa’s Resource Opportunities with multiple resource sector buyout targets.
Click here to discover the names. Our last pick, Filo Mining, landed a buyout, making some subscribers and I very happy.
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