Beyond oil: 8 hot energy plays

Related topics: stocks, energy, General Electric, First Solar, Jim Jubak

In the middle future -- say, the next five years -- the energy sector landscape looks like it will be very different than forecast just a year ago.

Nuclear energy seems to be, if not dead, on life support.

Grid distribution problems have hit wind power even harder than predicted.

Solar companies are driving costs down and efficiencies up faster than all but the most optimistic advocates forecast.

And while natural gas prices remain so low that it's hard for gas producers to make a profit, the makers of equipment for generating electricity from natural gas are experiencing boom times.

It's tempting to put this all down to Japan's Fukushima Daiichi nuclear disaster (or near disaster, if your definition of a nuclear disaster requires molten nuclear fuel burning its way toward the Earth's core). The operator of that nuclear plant, Tokyo Electric Power, now acknowledges that three of the plant's four reactors suffered fuel meltdowns in the days after Japan was hit with a devastating earthquake and tsunami. The company also says it's possible that the pressure vessels that house the uranium fuel rods were breached in the disaster. But "most" of the fuel remained inside the pressure vessels, the company adds not so reassuringly.

You could blame the new energy landscape on the Fukushima Daiichi disaster, but I don't think that's the case. A lot of independent causal factors are at work here. Japan's disaster remains a good place to start any effort to put all those factors into a single picture, though.

Europe is rethinking nuclear

Not surprisingly, the disaster at Fukushima Daiichi has led to a lot of rethinking of national nuclear plans around the world.

Some of that rethinking amounts to little more than reassuring. I'd put the European Commission's recommendation that national nuclear regulatory agencies inside the European Union conduct stress tests of the 143 nuclear plants operating in Europe in that category. Environmentalists are rightly skeptical of the rigor of tests administered by the pro-nuclear governments of the United Kingdom, France and the Czech Republic. Reports from the negotiations show these countries fought hard to water down the plan. You can think of this stress test as the nuclear version of the banking sector test that saw almost every European bank pass.

But some of the rethinking has resulted in meaningful action. Switzerland has decided to put plans to build three new nuclear power plants on hold. It also plans to decommission -- that is shut down and entomb and/or disassemble -- the country's five operating plants.

The Fukushima Daiichi disaster came at a crucial time for the nuclear power industry. First, many power plants are reaching the limits of their agreed-upon lives. And second, the industry, after decades when no one built a nuclear plant, was revving up for a surge of construction based on new, theoretically safer, and more standardized designs. (The last U.S. nuclear plant to go into commercial service was in 1996. The last French reactor before the current wave of construction was built in 1999.)

Fukushima Daiichi changed all that. Germany, where Chancellor Angela Merkel, had pushed through an agreement to keep the country's aging reactors running for an additional 12 years, through 2036, shut down all seven of its nuclear plants that went into operation before 1980 in the wake of the disaster in Japan. Now Merkel is looking to close the country's 10 remaining reactors between 2020 and 2025.

The US is rethinking, too

And in the United States, the Nuclear Regulatory Commission announced on May 19 that it had found design flaws in plans for a new generation of passive safety reactors designed by Westinghouse. Passive designs promise to be a huge improvement over older reactors: While the reactors at Fukushima Daiichi depended on active safety systems that required electricity to keep pumping cooling water, passive designs have safety systems built around gravity and convection that don't require electricity to keep operating.

But, the agency has said, the computations submitted by Westinghouse Electric for the design of the reactor shield building appear to be wrong or incomplete. The commission was on a schedule to finish its review of the design by the summer and its backer, Southern (SO, news), has already dug foundations for two Westinghouse reactors near one of the utility's existing nuclear plants. (South Carolina Electric and Gas has also broken ground for two of reactors of this design.) But now the commission is talking about an unspecified delay while Westinghouse submits another round of calculations. Southern had projected that it would receive a construction and operating license by the end of 2011 and that it would have the first reactor on line by mid-2016.