Yellowbull@Yellowbull11
While Spain doesn't have the largest nuclear fleet in Europe, a phase-out reversal of any kind will still have a significant impact on the market 🇪🇸
How significant and what is the situation we are actually dealing with here? That is what I dove deeper into. For context, Spain operates seven commercial nuclear reactors across five sites with a combined net capacity of 7.1 GW, and those reactors provide roughly 20% of the country's electricity. Under a 2019 agreement between the government and the plant operators, all seven reactors are scheduled for a phased shutdown between 2027 and 2035. The first dominos to fall would be Almaraz I in November 2027 and Almaraz II in October 2028, which together represent about 2 GW of capacity. By 2030, four of the seven reactors would be gone (roughly 4 GW), with Asco I and Cofrentes following Almaraz. The remaining three, Asco II, Vandellos II and Trillo, would close by 2035, bringing the total installed nuclear capacity in Spain to zero. Most supply-demand models in the uranium space have baked in this full phase-out, treating all 7.1 GW of Spanish capacity as lost demand by the mid-2030s. That assumption may now be wrong, or at the very least premature, given recent developments. Perhaps I am too optimistic, but there may be a chance.
In late October 2025, the board of CNAT (Centrales Nucleares Almaraz-Trillo, the joint operating company) formally requested a three-year extension for Almaraz I and II, pushing the shutdown date to mid-2030. Iberdrola holds a controlling 53% stake, with Endesa at 36% and Naturgy at roughly 11%. Spain's nuclear regulator, the CSN, is expected to deliver its assessment this summer. Then in February 2026, Iberdrola's president Ignacio Galan went further, stating during the company's earnings call that he expects they will request extensions for the entire fleet, not just Almaraz. His exact framing from what I read was that nuclear plants are "necessary, safe, efficient and help reduce prices." That is a significant shift in tone from one of the country's largest utilities. The catalyst behind this reversal is the April 2025 blackout, which I am sure all of you remember well, that shut down the entire electricity grid across the Iberian peninsula, an event that reignited a national debate about baseload power and grid stability in a system that was already struggling to integrate massive amounts of intermittent renewables.
Foro Nuclear's chairman, Ignacio Araluce, was quite direct about the implications, stating that if Almaraz secures an extension, the probability of the other reactors following suit is "100%” (talk about a statement of intent). A Deloitte report estimated that extending the fleet's operational life could save Spanish industry 1.4 billion euros per year. The Spanish Congress has already approved a non-binding proposal calling on the government to reverse the phase-out, and the opposition People's Party, which is polling well ahead of the next general elections due by August 2027, has been consistently pro-nuclear. The political wind is shifting, even if the current Socialist-led coalition has not formally changed course yet.
Now, no life extension has actually been approved to date, and I want to be clear about that. The government initially characterized the Almaraz request as a "statement of intent" rather than a formal submission, and the ruling coalition still officially supports the closure timeline. There is also the tax problem. The fiscal burden on Spain's nuclear fleet has increased by roughly 90% between 2010 and 2019, with another 70% increase piled on by 2025. A PwC analysis found that taxes would account for over 40% of nuclear operating costs between 2025 and 2035, which seriously threatens economic viability. Operators have made it clear that without tax reform, extensions do not make financial sense even if they are politically approved. So the hurdles are real. But the direction of travel is unmistakable, and the momentum has accelerated considerably since that blackout.
Let me quantify what this means for uranium demand, because the numbers are material. Using the assumption of 500,000 pounds of uranium per GW of capacity per year (you can debate using 450,000 pounds or even more than 500,000 pounds depending on a variety of inputs, but let’s go with the 5 handle), Spain's full 7.1 GW fleet generates annual uranium demand of approximately 3.55 million pounds. Under the current phase-out schedule, that demand drops to roughly 1.55 million pounds by 2030 (once the first 4 GW shuts down) and hits zero by 2035. If life extensions are granted for the full fleet and those reactors run through 2040 or beyond, that is 3.55 million pounds per year of demand that the market currently assumes is disappearing but could instead persist. Over a ten-year window from 2027 to 2037, the difference between the phase-out scenario and the full extension scenario is on the order of 25-30 million pounds of cumulative demand. That is pretty significant in a market that is already struggling to balance supply and demand. Then there is the inventory angle, which I think is genuinely underappreciated. European guidelines target approximately three years of run rate inventory for nuclear operators as a security of supply buffer. For Spain's full fleet at 3.55 million pounds per year, that implies a target inventory of roughly 10.65 million pounds of U3O8 equivalent.
Spanish law separately mandates that utilities maintain enough uranium stock to manufacture fuel for two full core loads of a 1 GW reactor, which broadly aligns with the three-year guideline. Why does that matter? Because if operators have been planning for a phase-out since 2019, they have had very little incentive to maintain or replenish those inventories. Why would you restock fuel reserves for reactors you intend to shut down? The rational move is to draw down existing stocks and let contracts roll off. So if the political decision shifts to extension, which increasingly looks possible even if the timeline remains uncertain, Spanish utilities would need to re-enter the market to rebuild those strategic reserves. We are potentially looking at 5-10 million pounds of restocking demand layered on top of the ongoing annual requirements, depending on how far inventories have been drawn down during the phase-out planning period. I have personally not been able to find precise current inventory numbers from ENUSA (Spain's state-owned fuel cycle company), but given that they have been operating under the assumption of imminent closures for nearly seven years, I think it is safe to assume that stocks are well below the three-year target.
For those of us watching the uranium supply-demand balance, Spain really does matter, at least in some capacity. It is not the largest fleet in Europe, but 3.55 million pounds of annual demand plus a potential restocking cycle is meaningful in a market where secondary supply sources are thinning and primary mine production continues to disappoint. Most importantly, it represents demand that the consensus has written off. If Spain joins the growing list of countries that are reversing their nuclear phase-out positions (Germany being the notable exception that went the other way, as I noted earlier), it sends a signal that the structural demand story for uranium is even stronger than most models currently assume and that is a trendline that has been in place for years now as the positive catalysts and upward price pressure continues to pile up. I would love to see that change materialize, and frankly, the odds are better now than at any point since the 2019 agreement was signed. Here is to hoping.
