Driving Uranium in Future Energy Mix
Source: Australian Journal of Mining (7/16/09)
"Nuclear power remains the least price sensitive of baseload fuels for global power generation."
That lack of price sensitivity should underpin investment in uranium mining in Australia to satisfy future global energy needs, according to uranium explorer and developer, Toro Energy Limited.
Addressing a Chinese investment forum in Adelaide, Toro Energy's managing director, Greg Hall, said price and security of supply would be the main driver of the future energy mix.
"If you double the cost of the basic fuel material used in various power generation techniques, nuclear power is the least price sensitive—and therefore delivers the best potential to absorb price increases while maintaining electricity prices, allowing solid returns on investment in long-term viable power," Hall said.
"Doubling the price of uranium used in power generation will only lead to a 4% increase in the price of electricity generated from that nuclear power source.
"The cost escalation rises to 40%, however, if the coal price doubles, and rises above 70% if the gas price is doubled.
"It is a scenario which is difficult to argue against in terms of the world's capacity to meet sustainable long-term, affordable and ideally greener baseload energy expectations."
Hall also warned that new uranium mine supply must continue to expand aggressively by around 32% to meet nuclear energy demand projections in just the next six years.
"In 2006, all global sources of uranium produced 73,300 tons of U3O8, yet the demand curve suggests a need for 150,000 tons of U3O8 by as early as 2015 but we will struggle with an output capacity by then of only 100,300 tons," Hall said.
"Invigorated new Australian uranium production can help bridge that demand-supply gap."