The Uranium Bubble: Demand Side

Worries over climate changes and the supply of fossil fuels means that a strong case can be made for the use of nuclear power. According to the World Nuclear Association, worldwide nuclear power capacity is increasing steadily, with over 60 nuclear power reactors under construction in 13 countries (figures accurate as of August 2012). Alongside this increase in reactors, further nuclear capacity is being created by plant upgrading and plant life extension programmes.

China has by far the most ambitious nuclear programme with almost 30 new reactors currently under construction and even more about to start construction. There are also plans in place to build some of the most advanced nuclear reactors in the world with an aim to achieve a five-or six-fold increase in the country's nuclear capacity by 2020!

Although not on the same level as China, both India and Russia have extensive plans for nuclear expansion. Of the 7 nuclear reactors currently under construction in India, 2 are expected to be completed in 2012, the country's aim is to supply 25% of its electricity from nuclear power by 2050. Russia is planning to increase its nuclear output by 50% by 2020 and should have 10 new reactors operating by 2017. It's a shame that all of this will be happening long after the completion of the Megatons to Megawatts Program which would have alleviated some of the demand pressures.

Even though they are not likely to contribute much to the expansion of nuclear capacity in the near future, over 45 emerging nuclear countries are actively considering developing nuclear power. For full details of worldwide plans for nuclear reactors click here.

The result of this dramatic worldwide increase in nuclear capacity is higher demand for uranium in the future, which, given the concerns surrounding future supply (and the already sizable demand-supply gap) led to speculation in the uranium market and the subsequent uranium price bubble.