The energy sector is experiencing a dramatic shift, with nuclear power gaining favour as renewable energy projects face political and practical challenges. This divergence was highlighted on September 16, as ASX-listed uranium miner Paladin Energy successfully raised $300 million through an equity capital raising, priced at $7.25 per share. Paladin Energy is focused on developing uranium projects, essential for nuclear power generation. The company aims to provide clean energy solutions and support the growing demand for reliable energy sources.
Simultaneously, Danish renewable energy giant Orsted navigated a more turbulent capital raise, announcing a 60 billion krone ($14.3 billion) rights issue at a steep 67 per cent discount. This reflected significant risks, including political interference, such as the Trump administration’s initial halt to Orsted’s Revolution Wind project, and lower-than-expected offshore wind speeds impacting earnings. Despite a court injunction allowing the project to resume and potential investment from Apollo, Orsted’s share price has plummeted 75 per cent over five years.
In contrast, Paladin Energy’s investors have seen returns of over five times their investment during the same period, fueled by growing demand for uranium. The company is using its $300 million capital raise to accelerate production. A top US energy official advocated for boosting the strategic uranium reserve to reduce reliance on Russian supplies, anticipating increased usage in large reactors and small modular reactors (SMRs). This enthusiasm is driven by the projected surge in electricity demand from artificial intelligence and data centres, which the Climate Change Authority estimates could consume 10 per cent of Australia’s energy by 2035.
While challenges remain, including production setbacks for major uranium miners, the long-term outlook for nuclear energy appears increasingly positive. Even with Trump’s continued denouncement of renewables, the global market is moving towards nuclear due to the immense power demands of AI and the need to meet energy transition targets. With the debate shifting away from ideology, nuclear power is gaining traction as a viable and investable energy source.
