While many think that wind and solar are the answer to climate change, about 60% of the reduction in CO2 emissions during the past 15 years has come from switching from coal to natural gas, points out Carl Delfeld, international investing expert and editor of Cabot Explorer.

And while trillions of private and tax dollars were spent on wind and solar projects over the last 20 years, the world’s dependence on fossil fuels only declined from 87% to 84%.

So if the top risks to the world right now are climate change and geo-political conflict, the growth of nuclear energy in both America and China is essential.

Nuclear energy is virtually emissions-free energy, takes up very little land, consumes very little fuel, contributes to fuel diversification and the stability of the grid, creates skilled, well-paid jobs, and produces very little waste. It‘s the technology that solves both energy poverty and climate change.

Then there is the important issue of reliability. Nuclear power plants on average operate at full power on 336 out of 365 days per year. In addition, nuclear plants can run for 100 years while solar panels and wind turbines last only about 20 years. No wonder nuclear power accounts for 70% of France’s electricity mix and 30% for Switzerland, South Korea and Sweden.

Centrus Energy (LEU), based in Bethesda, Maryland, supplies nuclear fuel and services for the nuclear power industry in the United States, Japan, Belgium and internationally.

The nuclear power industry is rapidly changing, with a new generation of advanced reactors under development. Centrus provides an integrated solution for meeting the industry’s engineering, manufacturing and fuel needs. Drawing on decades of experience, Centrus can help with the design and manufacture of critical components as well as design, and licensing of facilities to produce new fuels.

One near-term catalyst for this stock is that the Biden administration is pushing lawmakers to support a $4.3 billion plan to buy enriched uranium directly from domestic producers to wean the U.S. off Russian imports of the nuclear reactor fuel. Russia accounts for about 23% of the enriched uranium needed to power U.S. commercial nuclear reactors.

Energy Department officials are making the case that any interruption in the supply of enriched Russian uranium could cause operational disruptions at commercial nuclear reactors.

The proposal aims to spur development of more domestic enrichment and other steps needed to turn uranium into reactor fuel. This would create a government buyer directly purchasing enriched uranium, including the type used in a new breed of advanced reactors now under development.

Right now, America has only one remaining commercial enrichment facility — a New Mexico plant owned by Urenco Ltd., a British-German-Dutch consortium.

Energy Secretary Jennifer Granholm has called the U.S. reliance on Russian imports a clear vulnerability. Other backers of expanding U.S. enrichment capabilities include Senator John Barrasso, a favorite of mines and a Wyoming Republican who serves as the top GOP member of the Energy and Natural Resources Committee.

Centrus Energy is building an enrichment facility in Ohio and would be very likely to benefit, especially if this funding moves forward. In addition, the stock is trading at about $25, way off its 52-week high of $88 and at just 2.6 times earnings. Centrus also has an operating margin of 23%. I believe downside risk is low and upside is significant, and I have a six-month target of $50.

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