"The Most Dangerous Energy Source?"... The Paradox of Nuclear Power Revealed by War [Weekend Money]

Fear of Power Shortages Drives Capital Elsewhere
"Nuclear Power Proves Safest Energy Source During War"
Energy Transition Accelerates: Power Grids, LNG, and Data Center Engines

Amid the geopolitical crisis triggered by the war between the United States and Iran, the importance of alternative energy sources, including nuclear power, is growing. With the blockade of the Strait of Hormuz shaking up the traditional fossil fuel-centered supply chain, the role of nuclear power plants is being reemphasized from the perspective of energy security.

According to NH Investment & Securities on April 25, researcher Lee Minjae recently stated in his report “Geopolitical Changes and Energy Transition After the U.S.-Iran War” that, “Nuclear power is the most dangerous energy source in human history, but it has proven to be the safest during times of war.” He projected that, “Investments to supply power, including for renewable energy and ship engines, will continue.”

"Nuclear Power: The Most Dangerous, Yet the Safest"

During the current war, nuclear power plants in the Middle East have operated stably without any radioactive leakage, despite direct threats of attack. Similar cases were observed during the Russia-Ukraine war. Nuclear plants are facilities with significant military and political burdens since any attack can cause widespread damage; therefore, even in actual wartime situations, direct attacks tend to be limited, which contributes to their “safety,” according to the analysis.

There is also a growing pro-nuclear movement. In fact, countries such as Germany, Italy, and Belgium—which previously declared nuclear phase-out policies—are now reconsidering those policies to avoid energy dependency. German Minister of Economic Affairs and Energy, Katharina Reiche, stated last month, “The current surge in oil prices due to the Middle East crisis is burdening economic recovery,” adding, “Shutting down nuclear power was a tremendous mistake. Nuclear energy is desperately needed.”

Accordingly, the value of “Team Korea,” which possesses the entire nuclear power value chain, is also expected to rise. Researcher Lee emphasized, “Team Korea is the only player, and entry into the North American large-scale nuclear market will be an opportunity to prove our capabilities.” He pointed to Doosan Enerbility (target price: 1.4 million won) and Korea Power Engineering Company (target price: 2.4 million won) as related stocks.

Pipelines and Power Grids Opening Up as Sea Routes Close

The power grid industry, which safely delivers generated energy without loss, is also experiencing a surge. The United States has approved large-scale investments to increase transmission voltage from the current 500kV to 765kV in response to rising electricity demand. Raising the voltage is akin to expanding a regular road into a ten-lane expressway, maximizing logistics efficiency.

NH Investment & Securities selected LS ELECTRIC (target price: 2.2 million won) and Sanil Electric (target price: 2.5 million won) as the main beneficiaries. In particular, Sanil Electric is showing rapid growth, with next year’s expected operating profit being revised upward due to the increasing demand for special transformers specialized for renewable energy grids.

Middle Eastern countries are also accelerating their actions. To avoid the “chokehold” of the Strait of Hormuz, they are focusing all efforts on constructing alternative pipelines that bypass through the Gulf of Oman or the Red Sea. Researcher Lee emphasized, “The core plant bases that domestic construction companies have established through cumulative orders since 2010 geographically coincide with the main strike points of this war.”

With postwar restoration costs estimated at approximately 18 billion dollars, Korean construction companies are expected to see expanded opportunities for orders in the Middle Eastern reconstruction market. This is attributed to their local construction experience, which serves as a significant competitive advantage in terms of project understanding. In particular, Hyundai Engineering & Construction (target price: 3 million won) is expected to normalize its performance based on its experience in nuclear power plant construction and reconstruction volume in the Middle East.

Ship Engines Take Center Stage, Driven by Data Centers

While the war has accelerated the pace of energy transition, the artificial intelligence (AI) boom is transforming the form of energy itself. Due to the rapid speed of data center investment, there is now a shortage of gas turbines, and unexpectedly, “ship engines” have emerged as an alternative. Engines once used only on ships are now becoming the heart that powers data centers—the brains of AI. Researcher Lee explained, “As the lead time for gas turbines increases, demand for using medium-speed ship engines as power sources for data centers is rising rapidly.”

In fact, HD Hyundai Heavy Industries recently secured a contract worth 627.1 billion won to supply medium-speed engines for data center power generation to U.S.-based Aperion Energy Group. This demonstrates that ship engines are expanding beyond simple shipping equipment to become power infrastructure assets. Reflecting the expansion potential of its engine business, HD Hyundai Heavy Industries’ target price was raised by 8 percent to 860,000 won.

Researcher Lee added, “Energy transition is expected to progress rapidly, as it now combines the value of security with environmental friendliness,” and emphasized, “Investments to supply power, including for renewable energy and ship engines, will continue.”

This content was produced with the assistance of AI translation services.