What recent TEPCO shares activity tells us
Tepco Shares Surge a Fourth Day on Reactor Restart Speculation – Bloomberg
Thanks To Abenomics, Japan’s Most Controversial Company Is Up 400% This Year – Business Insider
There are some pretty strong rumors out there that TEPCO (Tokyo Electric Power Co Inc) is going to restart some of its reactors – all of which have been powered down since March 2011. The rumors are strong enough that the TEPCO share price skyrocketed this past week – hence the headlines in the Media.
Now I’ve got to say that while the TEPCO shares activity chart is very impressive it shouldn’t be a surprise. As we all know, the share price of Japan’s largest power company (by generation capacity) was all but wiped out after Fukushima. The colossal cost of importing fossil fuels instead of using the low-OPEX nuclear reactors, along with the costs of dealing with the reactor failures has nearly driven the company into the ground. Being able to restart some of its reactors is obviously going to have a massive (positive) impact on the company. However, that’s not the full story.
My point is this: there is simply no choice about restarting the reactors. To put it another way, it’s never been a question of if but rather when. Japan needs it’s fleet of reactors up and running. The country simply cannot afford to ditch nuclear energy. It is a crucial part of their long term energy mix from a cost, energy security and environmental perspective. The last two years without nuclear energy has quite literally cost the country $trillions, has driven up the global price of liquid natural gas and has driven up carbon emissions considerably.
There really isn’t a choice when it comes to nuclear energy – not for Japan, not for the rest of the world. It’s because of this that the fundamentals of the nuclear energy sector – and therefore the uranium sector – are rock solid and the recent TEPCO share price increase reflects that. Whether or not the restarts are just around the corner (and my personal opinion is that they are close indeed), they will happen. When they do, it won’t just be TEPCO shares that move up….
Dev Randhawa
