Europe is likely to build more reactors.© Getty

Europe could be heading for a “nuclear renaissance”, says Pierre Georges of S&P Global Ratings. With gas and power prices rocketing in the wake of the Russia-Ukraine conflict, the appeal of atomic energy is only growing. Unlike other “lowcarbon alternatives”, such as wind and solar, nuclear provides “a stable, non-intermittent supply of power”.

The UK has announced plans to build up to eight reactors as part of its new energy strategy. France is also planning more reactors, while Belgium has shelved plans to phase out its nuclear plants in response to “a chaotic geopolitical environment”. The Netherlands, the Czech Republic, Poland, Estonia, Slovenia and Serbia also have new capacity in the pipeline, says Michael Brush on MarketWatch. Further afield, so do China and India.

Uranium is back in fashion

Uranium futures have soared by more than a third since the invasion, with shares in miners such as Canada’s Cameco rising a similar amount, says Jinjoo Lee in The Wall Street Journal. Shares in UK-listed uranium trader Yellow Cake are up 46% since 24 February. At $63 a pound, prices for the nuclear fuel are at their highest since 2011. That was the year when the Fukushima disaster prompted a global turn against nuclear energy, with Germany initiating a phase out of its nuclear power plants. Uranium prices slumped, falling as low as $18 in late 2016. The latest price rally has been driven by fears that supplies from Russia may be disrupted.

The enrichment bottleneck

Russia only accounts for about 6% of uranium-ore supply, behind Kazakhstan (40%), Canada (13%) and Australia (8%). However, the “major bottleneck” is not in the supply of uranium ore, but in the “conversion and enrichment processes” that turn the ore into usable fuel, says Justine Calma for The Verge.

Uranium ore must first be “refined” into yellowcake, a substance that resembles “yellow chalk” before undergoing “conversion” into a gas. Then it must be “enriched” to a level where it can be used as fuel rods in a reactor. This is a complex process and Russia has “43% of the global enrichment capacity”, followed by Europe (33%), China (16%) and the US (7%), say Alex Gilbert and Morgan Bazilian for The Conversation.

The result is that up to one-fifth of the annual US uranium supply is “at least partially sourced from Russia”. Kazakhstan may mine more ore, but much of that output “travels through Russia before it is exported to global markets”. Fuels are also “highly specialised and tied to specific reactor designs”. That makes it harder to shift nuclear suppliers at short notice. If sanctions or counter-sanctions on Russia cut the supply of enriched uranium, then “plants in the US and Europe could be affected within 18 to 24 months”.