Though it was well known that next generation reactors are more efficient, faster to build and capable of quickly resulting in a shift away from fossil fuels, the energy crisis triggered by the war in Ukraine has accentuated renewed interest in nuclear power bringing Australian uranium stocks in focus.

Nuclear power currently generates about 10% of the world's electricity. ASX uranium stock prices could get a lift with many countries now exploring new nuclear projects to improve their energy supply and energy security, as well as to help meet goals for cutting greenhouse gas emissions.

After a decade in a slump, uranium prices are on the rise, fuelled by a global shift in support for nuclear energy and subsequent rising demand. The challenge of Climate Change and the energy transition to cleaner, greener energy sources has led governments to urgently identify alternatives to fossil fuels.

Meeting Growing Demand and Best ASX Uranium Stocks

Growing uranium demand and diminishing secondary supplies have galvanised an increase in production bringing into focus Best ASX uranium stocks. Globally, governments are recognising the vital role that nuclear energy plays to support the energy transition. In the recent past, Belgium has continued with its U-turn on nuclear energy by extending the life of two reactors by ten years as compared to its earlier plans to fully phase out nuclear by 2025. South Korea also curbed its plans for renewables in favour of nuclear energy.

Late last year, Japan, reversing its nuclear phase out plan after the Fukushima crisis in 2011, adopted a new policy to promote greater use of nuclear energy. Aiming to sustain future use of nuclear energy, it seeks to maximize the use of existing nuclear reactors by restarting as many of them as possible. It also intends to prolong the operating life of old reactors beyond their 60-year limit, and by developing next-generation reactors to replace them since most of these are more than 30 years old.

The macro outlook for uranium and nuclear power remains positive because of Nuclear’s role in energy security since renewables fall back on intermittency and low capacity, requiring base load energy resources to offset. The resource could be nuclear power plants or coal and natural gas. Since the nuclear power has the highest base load capacity, utilities seek out base load reliability of nuclear power to avoid supply chain disruptions.

Among the uranium stocks in Australia, Deep Yellow Limited and Paladin Energy Ltd, are firmly entrenched in projects in Namibia. While Deep Yellow has the largest uranium resource base of any ASX-listed company, it is uniquely positioned as one of the few uranium companies globally able to execute to development and production, with credible multi-mine asset exposure. Paladin Energy’s restart of the Langer Heinrich Mine is on target for first production in Q1 CY2024

The global energy transition has understood that renewables can be only part of the solution. Emerging as a clear winner, being the only viable option in the mid to long term, nuclear is forcing the favourable change in the fundamentals of the uranium market.