The Fuel of the Future

The electricity needed for any country to successfully replace fossil fuels, both for transportation and everyday use, will have to come from nuclear generation.

There is simply no other logical alternative:

Coal and natural gas plants emit carbon dioxide emissions and natural gas needs an incredible amount of investment in pipelines and supporting infrastructure

Operating a 1,000-MW coal plant, for one year, produces 30,000 truckloads of ash that contains large amounts of carcinogens and toxins. Every second, up the smokestack, goes 600 pounds of carbon dioxide and ten pounds of sulfur dioxide

Extensive use of hydrogen is not practical due to its volatile nature and lack of infrastructure

Solar, wind and geothermal are all niche suppliers and are untried on a large scale. Geothermal seems to be limited to a few parts of any country and all three alternative means of generating electricity need massive investment in power transmission lines to get the power to where it's needed. All three of these technologies are extremely important and each will successfully contribute, in a small way, to energy independence. But none are, today, capable of supplying base load power

A 1,000-MW solar plant would cover 129 to 259 square kilometers and use a thousand times the material needed to construct a nuclear plant of the same capacity.

To equal the output of South Korea's Yongwangs six one-thousand-megawatt nuclear reactors, wind generators would require an 245 kilometers wide extending from San Francisco to Los Angeles. Solar would require roughly 52 square kilometers of collector area.

High emissions, a negative energy return and severe environmental costs are associated with ethanol and make its use impractical

Hydro - going to clean eco-friendly energy isn't accomplished by damming what free-flowing rivers are left

David Fuller's view I maintain that the arguments for nuclear energy are compelling. I think it will be the best energy story for at least the next 20 years.

Inevitably, many people disagree, usually favouring solar, and the reality is that no one knows for certain. However, uranium is even more likely to be the best energy investment play for a number of years because the choice is so simple.

Buying into clean energy technology is highly speculative, in my opinion. The competition is already intense and can only become more so. No one knows which technologies will win out. However, I would not be surprised if China emerges as the strongest in this field, as we are already seeing with windmills and solar panels. I would also back China to become the top manufacturer of nuclear power stations in the next few years, not least because it is currently building more of them than anyone else.

I think nuclear is the best energy investment because the strategy is uncomplicated; we buy uranium and particularly uranium miners, not the plant. We already know that the number of nuclear reactors will increase by approximately 60% in a decade. It should more than double over the next 20 years. That will require plenty of uranium, much of which is sourced in politically reliable countries, not least Canada.

What about the risks?

My biggest concern is an accident, not with the reactors under development but in one of those old nuclear plants, of which there are many. Some have been operating for nearly 40 years, which is past their 'sell by' date, and they use outdated technology. Another Chernobyl, or even a much smaller but still serious nuclear accident would hammer the share prices of uranium miners and could set the industry back several years.

Despite this risk, I will maintain and increase my overweight investment in uranium mining shares.