The sustainability conversation has changed dramatically in the last 15 years.
The focus was once on limits: ecological constraints, carbon budgets and the transition to a “circular economy”. In the 2010s, leaders across the political spectrum flirted with alternative measures of progress. Former UK Prime Minister David Cameron talked of “GWB – general wellbeing” and Bhutan’s Gross National Happiness (GNH) Index was widely admired.
But now old-fashioned growth is back. “Going for growth” is supposedly the mission of the UK’s Labour Party. Left-leaning thinkers like Ezra Klein and Derek Thompson reiterate this in their book Abundance, calling for a major push in infrastructure, housing and technological progress. This vision requires cheap and reliable energy, or “energy abundance”.
Why Growth Needs Energy
Why the change? Well, it turns out people weren’t happy with less. In the UK, wages have stagnated since 2008. According to the Resolution Foundation, the typical British worker would be £11,000 better off annually if pre-financial crisis trends had continued.
Stagnation isn’t confined to the UK. But it’s more severe than elsewhere. And energy costs are central to the problem. Sam Bowman highlights its industrial energy prices are 74% higher than the US and 32% higher than France. The UK’s per capita electricity generation is closer to developing countries like Brazil and South Africa than “peer” nations of Germany, Japan or Canada.
Energy underpins everything. When energy is expensive, the cost base for an entire economy rises. For households, high utility bills mean less disposable income and weaker demand. For businesses, it means less investment and tighter margins.
In the early 2000s, average US and UK wages were similar. Today, US wages are almost 50% higher. That decoupling coincides with the US’s shale revolution. Fracking unlocked vast reserves of natural gas, turning the US into a net energy exporter by 2019. This kept energy prices low and insulated the economy from shocks like Russia’s invasion of Ukraine.
AI and Surging Power Demand
Cheap energy is about to get more important, as countries look hopefully towards an AI revolution. With little electoral appetite to address growing debts through tax and spend, governments are banking on growing their way out of current predicaments. At the SXSW London festival this week, former Prime Minister Tony Blair talked about its “absolutely transformative” impact.
AI is an energy glutton. Goldman Sachs estimates that power demand from data centres will increase by over 160% by 2030. At an investment conference last week, Jon Gray of Blackstone and Waleed Al Mokarrab Al Muhairi of Mubadala agreed that energy was central to their investment decisions. Gray noted that after 20 years of flat demand in the US and Europe, energy consumption is now growing at 4% a year. While it’s difficult to pick a winner in the LLM fight, they are all going to need energy. Hence Blackstone’s position as one of the largest investors in the data centre industry.
Nuclear is Back
How can economies meet this energy demand without abandoning the Net Zero conversation? While there is a lot of techno-optimism around renewables, particularly solar, it’s nuclear that’s re-emerging as a solution.
Mubadala’s Al Muhairi spoke about Abu Dhabi’s new Barakah Nuclear Energy Plant. It will generate 60% of Abu Dhabi’s electricity. And tech companies are acting similarly. Google has signed an agreement with Kairos Power to build nuclear reactors. Amazon Web Services is working with Talen Energy Corporation to use its nuclear plant in Pennsylvania to power a new data centre campus.
Nuclear received further support from President Trump last month. He signed an executive order seeking to reestablish the United States as a “global leader in nuclear energy”. It offered wholesale deregulation, expediting approvals of new licenses and “overly risk-averse culture”.
Long sidelined due to high-profile disasters in Chernobyl and Fukushima, nuclear power can no longer be ignored as a practical, scalable and low-carbon option. It offers consistent, high-output electricity that doesn’t depend on the weather.
Betting on Uranium
It’s welcome news for investors that have long bet on uranium, the critical metal for nuclear energy. A recent research note from a big global investment bank supports that case, saying
We think that nuclear power & uranium have a major role to play in solving the twin challenges of decarbonization & energy security.
The bank also points to China’s role in driving demand. China currently constitutes 50% of demand for most metals but only 14% for uranium. It expects that to rise significantly as China ramps up nuclear capacity. It now has as many nuclear reactors under construction or in operation as France, nuclear energy’s world leader by share of electricity.
Investment options
All of which is welcome news to followers of the Uranium Corgi X account, a cult-like corner where uranium bulls wallow in gallows humour as the long-promised rally stubbornly fails to materialise. Even Corgi appears to have thrown in the towel, last posting in January:
I’m one of those followers, having been drawn into the uranium story by a friend. I regularly invest in Yellow Cake Plc, listed on London’s AIM market. The company buys and stores physical uranium oxide concentrate (“yellowcake”) with the sole aim of profiting from price appreciation.
It’s a lean operation, run by just two employees: CEO Andre Liebenberg and Carole Whitall. Yellow Cake has a long-term supply agreement with Kazatomprom, Kazakhstan’s state-owned uranium producer and the largest in the world. Its physical uranium is stored at licensed facilities in Canada and France, limiting geopolitical risk.
I’m shocked to be very slightly in the black, up 0.11%. But with an average purchase price of 488p and analyst targets ranging from 725p to 761p, I remain optimistic.
Other uranium stocks worth considering are:
📈 Cameco – Canada’s largest producer and the most liquid uranium stock globally
📈 Paladin Energy – Australian miner with a strong production profile
📈 Kazatomprom – If you’re comfortable with emerging-market risk and want to invest at source
- And for those who prefer baskets to individual picks, the main uranium ETFs are:
- 📈 Sprott Physical Uranium Trust – Holds actual uranium
📈 Global X Uranium ETF – Offers exposure to a wide range of miners
📈 North Shore Global Uranium Mining ETF (URNM) – More concentrated, higher-beta
Governments need growth. Businesses need computing power. Households want higher incomes. Cheap and reliable energy drives all three. Barring a sudden volte face on all Net Zero targets or a major breakthrough in renewables, we need an alternative energy source.
If abundance is the goal, nuclear power is a major part of the solution.
