Nuclear: The realistic playbook through 2030
The Sustainable Market Strategies team argue that small modular reactors have failed to achieve meaningful liftoff, noting nuclear's share of global electricity slipped from about 10% in 2022 to under 9% today. Hyperscaler nuclear headlines represent power purchase agreements on operational plants or feasibility options, not engineering, procurement, and construction cheques. New reactors cannot satisfy AI load on a quarterly timetable, meaning natural gas and renewables must bridge the gap through 2030. SMRs will not be a material solution this decade, leaving the investable nuclear story concentrated at the two ends of the chain: uranium mining and existing generation via restarts, uprates, and life extensions. The team maintain Cameco Corp as their preferred listed exposure due to long-term contracts, Canadian jurisdiction, and integrated reach from mining through conversion and fuel services. Constellation Energy Corp provides the cleanest listed vehicle for restarts, uprates, and extensions, alongside secondary generation exposures Vistra Corp and Talen Energy Corp.
Utilities
TLNE announces the sale of its zero-carbon data centre campus in Pennsylvania to Amazon Web Services for $650m. The transaction value is more than Hamed Khorsand was expecting and includes a power purchase agreement that would create a minimum of $300m of adjusted EBITDA over the next seven years for TLNE. Moreover, the group has additional assets for sale that could further showcase the underlying value of TLNE's current stock price. Further liquidation of assets could lead to the company being sold in pieces as it would have a small operating footprint to remain public. The share price is up more than 30% since Hamed turned bullish earlier this year.
Utilities
Hamed Khorsand initiates coverage of this independent power producer with a Buy rating and TP of $96 (50% upside). TLNE is public after being in private hands for 6 years and filing for Chapter 11 bankruptcy. While the reduced leverage profile of the business creates a valuation appeal, Hamed believes it is the catalyst from what TLNE could achieve at its Susquehanna nuclear plant that could significantly enhance shareholder value. The stock is currently trading on the OTC Markets making it likely that many investors have yet to hear about it. TLNE is not expected to uplist to a national exchange until the middle of 2024.
