U.S. Nuclear Plan Aims for 400 Gigawatts by 2050, Boosting Uranium Demand

Morgan Stanley has highlighted the significance of the U.S. nuclear energy plan, which aims to achieve 400 gigawatts of nuclear power capacity by 2050. This ambitious goal, announced by the Trump administration, marks a policy shift towards supporting nuclear energy, thereby strengthening the long-term demand outlook for uranium. The plan includes upgrading existing capacity by 5 gigawatts, building 10 new large reactors by 2030, and reducing the approval period for new reactors to 18 months.

The U.S. plan is part of a broader global trend, with over 20 countries setting similar targets at the 2023 COP28 summit. However, achieving this goal will be challenging. Historically, the U.S. has struggled with nuclear construction timelines and costs. For instance, the Vogtle 3 and 4 reactors took over a decade to build and cost twice the initial budget. To meet the 400 gigawatt target, the U.S. would need to start building approximately 20 reactors per year, a pace not seen since the 1950s when the U.S. added over 100 reactors in 25 years.

The U.S. nuclear fuel supply chain is heavily reliant on imports, with two-thirds of enrichment and conversion needs met overseas and nearly all uranium mining done abroad. By 2030, domestic mines may meet about 40% of U.S. demand, with Canada potentially filling much of the remaining gap. Several projects are underway to enhance U.S. enrichment capacity, including Orano's plan to build a 7 million separative work unit (SWU) facility by 2028, Urenco's expansion by 700,000 SWU by 2027, and GLE's planned 6 million SWU facility using Department of Energy tailings by 2030. However, conversion remains a bottleneck, with limited near-term increases expected.

The plan also includes support for small modular reactors (SMRs), which could be deployed by the end of 2030, with the earliest construction approvals possible by 2027. While SMRs have shorter construction times, their smaller size means more units would be needed to reach the target capacity. Overall, the U.S. nuclear energy plan represents a significant shift in policy, with potential long-term benefits for the uranium market and the global energy transition. However, the challenges of construction timelines, costs, and supply chain dependencies will need to be addressed to achieve the stated goals.