It’s hard not to be excited about clean energy right now.
After decades of unscientific vitriol and politics surrounding nuclear energy, it feels like a veil of delusion has been lifted.
Science, pragmatism, common sense, and sheer necessity are now prevailing.
Case in point: The U.S. Department of Energy has estimated the U.S. alone will need an additional 200 gigawatts of new nuclear energy capacity to meet energy demand and – hopefully – net-zero CO₂ emissions by 2050.
These goals are simply impossible without nuclear energy. And both U.S. political parties know it. This transition has been in the works for years. The Bipartisan Infrastructure Law, passed in November 2021, provides $6 billion for a Civil Nuclear Credit Program designed to provide financial support for existing nuclear reactors at risk of closing down.
It appeared to be a great step forward. But the execution has been another story.
Holtec International applied for the program in July 2022, to restart the Palisades nuclear power plant in southwest Michigan. By that November, its application was denied.
And yet at the same time, the Diablo Canyon nuclear power plant in California received $1.1 billion from the program to enable its two nuclear reactors to stay in operation. This was an odd shift in position, as the state of California had already decided to decommission one of the reactors that year and the other in 2025.
Holtec International and the state of Michigan didn’t give up, however. Working directly with the U.S. Department of Energy (DOE), earlier this year Holtec got approval for a $1.52 billion loan guarantee from the DOE to bring 800 megawatts of nuclear power back online. This was a topic I wrote about in Outer Limits – Has The Tide Turned on Nuclear Power.
This will be the very first recommissioning of a shutdown nuclear power plant in the U.S. It’s an incredible step in the right direction.
Based on the DOE’s estimates of needing an additional 200 gigawatts of new nuclear power in the next 25 years, the U.S. government just announced yesterday a new nuclear energy framework to bring online – you guessed it –“200 GW of net new nuclear energy capacity by 2050.”
The high-level goals are:
The shorter-term goals are:
To put things in perspective, 1 GW of electricity is about half the output of the Hoover Dam. It’s enough to power roughly 750,000-850,000 homes.
This new framework has a target of 200 GW, enough to power up to 170,000,000 homes with carbon emission-free electricity.
But the increase in nuclear power production isn’t for homes.
The demands for new energy production are being driven primarily by two massive trends that will certainly accelerate in the next four years. Regular readers of my research will already be familiar with both of these trends.
The most recent trend of course is the need for new AI factories – massive data centers – some of which will be a gigawatt scale. It’s hard to imagine a data center facility that requires that much power, but that’s what is required to build artificial general intelligence (AGI). And it will be required to run thousands of AI applications.
Just last month in The Bleeding Edge – It’s Not an AI Bubble. It’s a Race., I highlighted that the capital expenditures for AI for Amazon, Microsoft, Alphabet, Oracle, Meta, and Apple for 2025 will be around $200 billion. That’s just six companies in just one year.
This is a multitrillion-dollar trend that will unfold over the next decade. It’s unstoppable. And it needs gigawatts of electricity to fuel these technological advancements.
The second major trend is something I’ve referred to as The Great Recalibration. It’s a massive reversal of the multi-decade trend to move manufacturing offshore, primarily to Asia.
Economic policies that began in 2017 were a turning point for bringing manufacturing back onshore. The tide is coming back in and manufacturing in-country has become deeply popular again. And for good reason:
These economic policies take a few years to kick in, and they tend to span administrations. It’s easy to see the impact in the chart below. Total manufacturing construction spending has more than tripled since January 2020.
Source: BlackRock
By May of this year, manufacturing construction spending has increased to around $234 billion annually. This isn’t a trend that will slow down. And the supply chain problems caused by the pandemic policies only accelerated this recalibration.
This recalibration wouldn’t be possible, however, without today’s advanced technology.
Robotics, artificial intelligence, and process automation are driving manufacturing costs down to levels that are near what can be produced in China, without the supply chain or intellectual property risks.
And of course, all of these new manufacturing plants, whether they be for cars, semiconductors, or bicycles, will require gigawatts of electricity to run. Preferably, carbon emission-free energy.
And that’s why the politics have shifted.
The only other practical solution to reducing carbon emissions is degrowth. Reducing economic activity like air travel, food consumption, and private transportation. These are all policies espoused by the World Economic Forum, a cabal of unelected individuals trying their hardest to gain totalitarian control over the world.
Energy austerity is not progress. It is not a path forward. And it is not a solution that the people will accept.
Technology can and will save the day. That’s why energy policy and regulations are so critically important. Investment follows when there are reasonable regulations that provide a clear path toward commercialization in a short period. This has long been the issue with nuclear power regulations.
With Vivek Ramaswamy and Elon Musk now officially assigned to head up the Department of Government Efficiency (DOGE), we can expect rapid progress on this front. Both are intelligent, evidence-based, and common-sense thinkers now charged with the mandate to reduce government waste, “slash excess regulations,” and bring an entrepreneurial approach to government.
Having built the most successful clean energy company in history, I know this will be a major focus for Musk. He deeply understands that fueling Tesla electric vehicles with electricity produced from coal, natural gas, and oil makes no sense at all.
With nuclear power, the dream of carbon emission-free ground transportation is possible.
Better yet, DOGE has already been given a deadline for its mission. The team is to conclude its work no later than July 4, 2026, the 250th anniversary of The Declaration of Independence.
My prediction – DOGE is going to hit the ground running in January and aggressively get things done. We’re in for some remarkable developments. And cheap, limitless, clean energy is the path to abundance.
We have so much to look forward to,
Jeff
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
