Image via Wikipedia
At this point, it seems that the nuclear facilities and safety systems impacted by the earthquake and tsunami have worked according to specifications. Even so, the increasingly worrisome situation at the Japanese nuclear power generation facilities has led to significant concerns across the globe. In the U.S. and internationally, government officials have expressed concerns as well as support for nuclear power generation (See section entitled “Quotes, Viewpoints and Strategies” on page 7 for more details). That said, at this point, we believe it is reasonable to assume that the perception of nuclear safety globally has been adversely impacted. In our view, the process of sorting through the lessons learned from this event could lead to delays in design certification/construction (i.e. most impacted SHAW).
Alternatives to Nuclear Power Should be Beneficiaries – A potential delay in plans for nuclear power generation should likely benefit companies that can build natural gas, coal and renewable energy power generation facilities (i.e. most exposed BWC, FLR, FWLT, and SHAW). Moreover, companies that can provide maintenance services for nuclear plants currently in operation should also benefit (i.e. most exposed SHAW and BWC). For instance, in the U.S. there are currently 104 reactors accounting for ~20% of power generation. Globally, nuclear power accounts for roughly 18% of total power generation (See Figure 1).
