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June 24, 2016 - Financial markets were sent reeling today by the news that the UK had passed a referendum to leave the European Union (EU). It is unknown how “Brexit,” which was supported in the June 23 vote, will affect future plans to build new reactors in the UK and elsewhere. Today EDF Energy, NuGeneration, and Horizon Nuclear Power all emphasized their commitment to the UK's nuclear new build program, despite the decision to leave the EU. Nuclear industry experts reiterated that the UK must move forward with its reactor new build program to fulfill its commitments on meeting climate change targets. In the USA, the nuclear industry suffered an additional blow when Pacific Gas and Electric announced this week it would not pursue license renewal for the two reactors at its Diablo Canyon Nuclear Station and will close the facility in 2025.
The power produced by Diablo Canyon’s two reactors would be replaced with investment in a greenhouse-gas-free portfolio of energy efficiency, renewables, and energy storage. The announcement brings to an end a volatile relationship with the community and environmental groups and could cost as much as US$15 billion if the plant's output is replaced with solar-generated electricity.
Exelon Generation earlier this week formally notified the US Nuclear Regulatory Commission of plans to retire the Clinton and Quad Cities nuclear stations in 2017 and 2018, respectively, in the first of several procedural notifications related to closure of the facilities in Illinois. While Exelon said earlier this month it would close the plants, there is reportedly still some time to save the Clinton plant. Illinois Representative Bill Mitchell has led the efforts to get legislation passed and on June 20, said Exelon has given lawmakers until September to come to a deal.
Despite challenging market conditions, the global nuclear industry delivered a strong operating performance and improvements in construction times of new reactors in 2015, according to a new report from the World Nuclear Association. The report says that if the world is to meet its climate change targets, then the rate of new build will need to accelerate and the UK must move forward with its reactor new build program to fulfill its role in meeting climate change targets.
The US Department of Energy (DOE) also acknowledged that meeting environmental goals will require nuclear generation, and that new technologies can take decades to mature. DOE has outlined a vision for development of advanced reactors and targets 200 GWe of nuclear capacity by mid century. DOE's "Vision and Strategy for the Development and Deployment of Advanced Reactors," calls for at least two advanced reactor concepts to be developed, have reached technical maturity, and completed licensing reviews, by 2030.
The spot and term uranium markets were relatively calm in the midst of the turmoil created by Brexit and the announcement of the Diablo Canyon closing. The low price levels experienced over the past few weeks did attract a few discretionary buyers (utilities and intermediaries) into the market causing prices to inch up slightly over the course of the week.
Five transactions totaling were concluded during the week. Traders and producers acted as sellers in all five transactions. The modest level of trading volume did not fully capture buying interest, as mismatches between buyer and seller delivery timing and location prevented some parties from reaching agreement on terms as the week came to a close. TradeTech’s U3O8 Spot Price Indicator rose over the course of the week to settle at $26.80 per pound U3O8, an increase of $0.80 from last week’s Indicator and up $0.40 from the June 23 Daily U3O8 Spot Price Indicator.  read more