Spot uranium prices recently reached a peak not witnessed since 2007, standing strong at $101 per pound, per Numerico data.

This upswing signifies a constrained nuclear fuel market, growing expectations for future demand, and the imperative for additional mine restarts and new constructions, according to experts in the uranium industry. 

Uranium is Powering Up the Future

The surge in uranium prices aligns with an increased focus on nuclear energy in global climate change mitigation efforts. Furthermore, rising uranium prices have spurred the revival of uranium mining operations previously scaled back following the 2011 Fukushima disaster. 

Analysts and industry players anticipate more mine restarts in 2024. Plus, new builds are getting more attractive due to rising prices and anticipated supply deficits over the coming years. 

The spot price of uranium surging $100/pound was more than a 100% increase from the 2023 low. It is also a whopping >300% rise from the 2020 low. 

Uranium Spot Price USD Per Pound

Source: Numerico.com

The 16-year high uranium price, cracking at $101/pound since 2007, is driven by several factors.  

For one, shortage in uranium supplies since the Fukushima incident drove prices upward. 

Moreover, a U.S. bill seeking to ban nuclear fuel imports from Russia further contributes to the prices’ upward trajectory. The bill was called “NO RUSSIA” – National Opportunity to Restore Uranium Supply Services In America Act of 2022. Put simply, Russia will be out of the U.S. uranium market. 

RELATED: BREAKING: The US House Passed a Bill that just Repatriated the Nuclear Cycle from Russia’s Control

Once the bill passes the Senate, near-term demand for uranium will further surge upward. 

What Causes the Unprecedented Rise of Uranium?

But what are the market experts saying about this price breakthrough?

According to a uranium market analyst, Marin Katusa, the 16-year high uranium price reflects the “real” cost of bringing on previously built and permitted facilities to replace uranium exported from Russia and Niger.

Marin also noted that with the US banning Russian imports, the logical investment is exposure to permitted, built out production in the US. The banned imports include Kazakh production owing to Russian enrichment. 

Uranium prices have to increase more, Marin further noted, to incentivize new projects like the case with the Athabasca Basin. Building a new mine in North America would need even higher prices than $100.

Highlighting the growing demands for clean energy from data centers, which require more power for new technologies, SMR technologies offer a promising solution. 

Small modular reactor development, with under 300 MWe capacity, is taking place in Western countries with increasing private investment. North America, in particular, would be the epicenter of this rapidly growing nuclear resurgence. 

Marin also highlighted Japan’s decision to bring on the world’s largest nuclear power plant and its pro-nuclear stance since Fukushima. This and the positive outlook for nuclear technology globally coming out of the recent COP28 climate summit will create new demand for long term supply of uranium in politically stable jurisdictions. After all, Marin said that:

“…no nation wants to experience what France is experiencing in Niger with their uranium supply being completely cut off.”

For Miss America 2023, Grace Stanke, who happens to be a student of nuclear engineering, nuclear energy already plays a big role in the lives of many Americans. As a nuclear champion, Grace particularly noted that:

“From curing my dad’s cancer twice, to powering 20% of America, to helping with agriculture which is so important in my home state of Wisconsin… it really does feel like nuclear does it all.”

Beyond the Price: Uranium’s Ascent and Nuclear Energy Resurgence

As the world strives to reduce carbon emissions, zero-carbon nuclear energy is crucial. This is expected to make the demand for uranium explode much more. 

In effect, escalating spot uranium prices may also exert upward pressure on contract prices as sellers seek higher returns. While higher prices may not dissuade utilities for short-term needs, climbing contract prices, covering larger quantities of uranium, could have a more substantial impact. 

Some utilities are already experiencing “sticker shock”, as seen below in the S&P Global presentation. Experts also anticipate a widespread increase in nuclear fuel costs in the coming years due to rising market prices. 

Notably, higher uranium prices would also drive further restarts in the near term, with industry giants like NAZ Kazatomprom JSC and Cameco restarting idle capacity. Canada-based Cameco will add capacity as needed under long-term contract pricing. 

Meanwhile, Kazakhstan-based Kazatomprom, the largest uranium producer, plans to return to full production capacity by 2025. However, given the challenges that the company faces related to the availability of sulphuric acid (a critical operating material), they expect adjustments to their 2024 production plans. They also anticipate delays in finishing construction works at their newly developed deposits. These may affect Kazatomprom’s 2025 production plan, subject to considerable supply chain risks. 

For other companies like GoldMining Inc (GLDG), this price increase is great news for their high-value assets. GLDG is one among the companies that’s making waves in the sector. 

The surge in uranium prices signifies a resurgence in the nuclear energy sector. Driven by geopolitical shifts, legislative actions, and a growing demand for clean energy, the uranium market is poised for unprecedented growth.

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The European Commission has granted approval for Germany to provide €902 million ($987mn) in state aid to Swedish battery manufacturer Northvolt AB. This approval marks the inaugural application of a new rule allowing European Union nations to match foreign subsidies to prevent investments from diverting outside the bloc. 

Battery startups are drawing in record-breaking investments, reflecting the growing potential of the sector. Last year’s global venture funding is about to exceed the records set in the last 2 years. 

READ MORE: Battery Startups Attract Mega-Investments

Northvolt is Electrifying Europe

2023 marked by a global drop in venture investments, but the figures in the battery sector are defying the trend. This underscores the urgency highlighted by recent climate change projections, emphasizing the critical role of advanced battery technology and sustainable production in addressing environmental challenges.

Northvolt’s plan involves constructing an electric vehicle battery production plant in Heide, Germany, with an annual capacity of 60 GWh. The state aid approval ensures the project moves forward in Germany instead of the US. The battery-maker had considered establishing a lithium-ion facility in Canada under the Inflation Reduction Act (IRA). 

The state aid initiative, known as the Temporary Crisis and Transition Framework, is part of an effort to fortify European manufacturing in strategic sectors, such as batteries, wind turbines, and solar panels, amid intense global competition. It allows national governments to match subsidies if there’s a risk that a project is likely to be taken elsewhere.

Margrethe Vestager, the EU’s competition commissioner, highlighted the importance of enabling states to match aid to secure investments within Europe. 

Likewise, German Economy Minister Robert Habeck clarified that the German state aid doesn’t entirely match the subsidies offered by the IRA. Still, it is sufficient to encourage Northvolt to pursue the new plant in Germany. 

The aid comes in the form of a €700 million grant and a €202 million guarantee. 

Habeck rejected the notion that the matching aid mechanism primarily benefits wealthier EU nations only. He further emphasized the importance of European solidarity and acknowledged the escalating global competition, particularly from China and the US. He specifically noted that:

“We need a more robust industry for the new sectors — semiconductors, batteries, electrolysers, hydrogen. But this means that climate action and industrial production fit very, very well together.”

The EC has also approved a €2.9 billion French scheme supporting the production of devices needed for the transition. These include batteries, solar panels, wind turbines and heat pumps.

EU’s Strategic Move in Battery Tech

The demand for battery power would grow to 2,035GWh by 2030 from 185GWh in 2020 , a whopping 11x increase. About 90% of that comes from transportation alone. 

In terms of size, the global battery market was estimated at over $107 billion in 2022 and can potentially hit around $475 billion by 2032, according to a market research.

Northvolt’s plans for the Heide plant include the production of 800,000 to 1 million EV batteries annually starting in 2026. The battery manufacturer also aims for full production capacity achieved by 2029. 

The Stockholm-based manufacturer is the first European company to produce a battery cell from a gigafactory. This term is used to refer to large-scale manufacturing facilities dedicated to electrification. 

In a 2023 industry report, three remarkable financings exceeded $1 billion and Northvolt is one of them. The company secured $1.2 billion from investors in 2023 to support its expansion in Europe and North America. 

The battery titan has a factory in Northern Sweden, the largest factory in the country’s history. This plant can generate 60GWh of batteries a year when operating at full capacity. The company also has a facility in Poland.

Anders Thor, Northvolt’s vice president of communications and public affairs, hailed the European Commission’s positive decision. 

He highlighted its significance not only for Northvolt’s planned battery production but also for the broader European battery industry. He anticipates final voting procedures from local communities.

RELATED: Canada Commits $9.7 Billion to Propel Volkswagen Battery Plant

As Northvolt gets the green light in state aid from Germany, the battery giant is set to revolutionize the energy landscape. The approval underscores the EU’s commitment to fostering strategic sectors, driving sustainable production, and combating global competition. Amidst heightened climate concerns, this landmark decision propels Europe toward a resilient and competitive future in advanced battery technology.

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Xpansiv, a global energy transition market infrastructure provider, has entered into an agreement with Evident Group Limited (Evident), a prominent clean economy registry provider and certification body. The deal gives Xpansiv a minority interest in Evident.

Evident is globally acknowledged as an authority in certifying the clean economy, renowned for its expertise, stringent standards, cutting-edge registry technology, and collaborative approach. 

Serving consumers in 140+ countries, Evident has played a leading role in shaping sustainability certification for more than two decades. Notably, the company has pioneered the I-REC electricity certification service and market, extending its reach from China to Chile.

Ed Everson, CEO of Evident, remarked on their agreement, saying that:

“We believe expanding our partnership with Xpansiv will enable the market to scale more rapidly and will support our strategy to pioneer new products and services as well as invest in supporting and developing our wider network of partners and innovators around the world.”

Scaling Clean Energy Markets: Xpansiv and Evident’s REC Revolution

The investment solidifies the existing partnership between Xpansiv and Evident. This strongly aligns with their shared objective of facilitating the energy transition and certifying the world’s clean economy through independent certification and dynamic markets. 

In collaboration with the I-REC Standard Foundation, Xpansiv previously launched the trading of International Renewable Energy Certificates (I-RECs) on its CBL spot exchange in conjunction with Evident. 

The partnership expands the range of RECs and carbon credits trading on the CBL platform. This will improve RECs’ price discovery and liquidity formation. 

The I-REC launch on Xpansiv’s market ecosystem also widens options for developers and traders in various regions. These particularly include Latin America, Asia, Africa, and the Middle East. The spot exchange is trading 100 voluntary and compliance RECs. 

READ MORE: Xpansiv Breaks 2 Major Deals at Once: T-REX and I-REC

In 2021, CBL REC volumes increased by 28% because of broader market participation and rapid growth in solar REC traded. And with the projected growing demand for renewable energy, there’s also rising interests in trading of RECs worldwide. 

According to estimates, the global REC market value will grow to more than $111 billion.

Xpansiv’s investment facilitated trading of I-RECs issued under the Evident Code for I-REC, spanning 50+ countries and various project types. Since the launch, over 120,000 I-RECs from projects in 10 countries have traded on CBL.

I-RECs Powering Global Clean Economy Goals

Xpansiv’s investment will support Evident’s expansion into new regions and products. These specifically include Sustainable Aviation Fuel (SAF), green hydrogen, biomethane, and carbon removals.

The I-REC market has experienced substantial growth, with nearly 300 million certificates issued on the Evident registry in 2023. That’s a massive increase from 198 million in 2022 and 71 million in 2021. 

Redemption figures have also surged, reaching 176.5 million certificates in the previous year. That amount is almost double the 2022 total of 97 million and nearly quadruple the volume in 2021.

I-RECs serve as a direct market mechanism for multinational corporations, their supply chain collaborators, and general energy consumers. The certificates enable them to fulfill global renewable energy and sustainability goals. 

I-RECs offer transparent, independent evidence certifying the production of renewable electricity, enabling consumers to actively support the transition to cleaner energy sources, even in the absence of a dedicated supply of renewable energy.

RELATED: What are Renewable Energy Credits vs. Carbon Credits

John Melby, CEO of Xpansiv, noted that their clients are increasingly integrating I-RECs and carbon removals into their sustainability initiatives. Thus, their recent deal with Evident is “a natural next step”. 

Presently, Xpansiv’s infrastructure supports 12 carbon and renewable energy registries, responsible for issuing over 60% of North American RECs and 85% of global carbon credits in 2022. I-RECs trade alongside numerous voluntary and compliance products on Xpansiv’s CBL market platform.

The alliance between Xpansiv and Evident marks a significant step in fortifying the certification landscape for the clean economy, particularly renewable energy. With a shared vision of driving the energy transition, their partnership fuels the trade of Renewable Energy Certificates globally, bolstering the adoption of cleaner energy sources. This collaboration opens doors for diverse sustainable products and reinforces a commitment to shaping a greener future.

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Debate surrounds the challenge of mitigating emissions from hard-to-abate sectors to achieve net zero by 2050. Critics argue the short-term cost of such measures might be high, preferring more effective decarbonization routes.

Carbon removal startup Parallel Carbon claims its pioneering technology addresses both challenges by capturing CO2 directly from the air while generating low-cost green hydrogen.

The company aims to launch a kilowatt-scale demonstration project by 2025, with carbon removal credits (CDR) already pre-sold. The credits sold covered the startup’s first year of operations, helping them get off the ground and build the project. 

How Parallel Carbon’s Dual Technology Work

Parallel Carbon’s technology employs hyper-reactive minerals and achieves both carbon removal for under $100 per ton of CO2 and clean hydrogen production for $1 per kilogram. Their approach combines Direct Air Capture (DAC) and Water Electrolysis processes, powered by solar and wind energy.

Beyond providing durable carbon storage, this approach generates high-quality CDR credits and green hydrogen to facilitate industrial decarbonization. Here’s the company’s technology in an overview. 

Their electrolyzer produces hydrogen by splitting a neutral-salt electrolyte into an acid and an alkali without generating chlorine gas. This system works similarly with the chlor-alkali process, minus the chlorine gas.

Simultaneously, a mineral sorbent in DAC extracts CO2 from the atmosphere, releasing it by dissolving in the acid. This captured CO2 can either be stored geologically or used in industrial processes. The sorbent is then regenerated with the alkali for subsequent CO2 capture.

Notably, though the electrolyzer may operate intermittently, surplus acids and alkalis sustain the mineral sorbent’s recycling. This ensures continuous direct air capture even during renewable power unavailability.

Addressing DAC Efficiency and Cost Challenges 

Parallel Carbon’s CEO Ryan Anderson highlights their technology’s flexibility, designed as a flexible industrial load operating on intermittent power. This aligns with clean hydrogen production tax credit requirements, ensuring minimal marginal electricity emissions for direct air capture’s carbon accounting.

Though this technology demands more energy input than conventional electrolyzers due to the simultaneous DAC, its reliance on low power prices potentially poses a challenge.

Estimated energy costs for this process, with renewable electricity at $30/MWh, amount to $1.50 per kg of H2 and $50 per tonne of CO2. Anderson foresees flexibility in cost allocation between hydrogen production and CO2 capture due to the dual product nature. He further noted that:

“For most direct air capture, operating with clean power is a necessity — I think that’s very challenging for other direct air capture technologies…over 90% of the energy for the process goes into the electrolyzer.” 

They target a cost of $400/tonne of CO2 captured and $2/kg of H2 produced by the late 2020s. They also intend to further lower costs to $100 and $1, respectively, by the early 2030s.

The startup, having secured $3.6 million in seed funding led by Aramco Ventures, aims to field-test a scaled stack producing 50 kg of hydrogen and capturing one tonne of CO2 daily by early 2025.

Parallel Carbon has pre-sold its carbon dioxide removal credits for operations beginning in 2025. As corporations eye 2030 climate targets, the voluntary carbon market has gained traction, although scrutiny surrounds carbon removal effectiveness.

Driving Costs Down and Ambitions Up 

Apart from the growing carbon credit market, DAC also largely benefits from highly lucrative government support in the United States.

Anderson emphasizes the measurable CO2 removal capability of direct air capture, ensuring high-quality climate action. However, he doubts industries’ preference for carbon removal over other decarbonization methods. Anderson had formerly worked as an analyst on carbon capture and storage for research firm BloombergNEF.

This skepticism is fueled partly by the expectation that the market will have a relatively limited quantity of high-quality credits available over the next 10-15 years.

RELATED: Voluntary Carbon Credit Buyers Willing to Pay More For Quality

Moreover, government subsidies like the 45Q tax credit incentivize carbon capture. Despite complexities in claiming multiple credits, Anderson sees potential for separate companies to leverage distinct tax credits.

The 45Q tax credit offers incentives of $85 per tonne of CO2 for point-source carbon capture that’s permanently stored. It would be $60 if the gas is used in industry or for enhanced oil recovery. 

Then the credit increases significantly to $180 (or $130) if the capture is from direct air capture. But for DAC to qualify for these incentives, it needs to capture a minimum of 1,000 tonnes of CO2 annually.

Anderson also estimates that even without subsidies, carbon credits from DAC are currently sold for over $600/tonne of CO2.

Looking ahead, Parallel Carbon eyes a commercial pilot in 2026 capable of 100 tonnes hydrogen production and 1,000-2,000 tonnes of CO2 capture a year. The DAC company is also planning a Series A fundraising round to propel its vision forward.

Parallel Carbon pioneers technology that captures CO2 from the air, generating low-cost green hydrogen while directly addressing emissions challenges. Their innovative approach offers durable carbon storage and facilitates industrial decarbonization. With promising advancements and investments, they aim to revolutionize carbon removal and hydrogen production, positioning themselves at the forefront of sustainable innovation.

READ MORE: Carbon Removal Startups Are Finding More Places and Funds to Store CO2

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