Some MLM companies are switching to the direct sales model to differentiate themselves from fraudulent pyramid and money-circulation schemes.

The Indian government has modified the Consumer Protection (Direct Selling) Rules, 2021, to distinguish between legitimate direct-selling players and fraudulent schemes, which may lead to some MLM companies closing or switching to the direct sales model.

Direct selling companies, which may include former MLM companies, sell to consumers through direct-seller members and not through retailers, with companies like Amway, Oriflame, and Herbalife pushing for tighter regulation and clarity from the government.

The direct selling industry in India grew 12% in 2022-23, crossing Rs 21,000 crore in turnover, which may indicate a shift towards the direct sales model.

The number of active direct sellers in India touched around 86 lakh in 2022-23, up from 84 lakh in 2021-22, suggesting that some MLM companies may be switching to the direct sales model.

Herbalife's stock has fallen 64% year-to-date.

Nuskin's stock has fallen 31% year-to-date.

USANA Health Sciences' stock has fallen 49% year-to-date.

Primerica, Inc.'s stock has fallen 13% year-to-date.

Medifast's stock has fallen 45% year-to-date.

Natura's stock has fallen 50% year-to-date.

Avon's stock value fell from over $30 to just over $3 in 10 years.

Tupperware's stock value has dropped over 90% in the last 5 years.

The 2020 earnings of a typical Avon Leadership Representative was between $0 and $2,620 in commissions and bonuses.

94% of Tupperware's active party planners received about $12 a week on average, before expenses.

Some MLM companies have closed or switched to a direct sales model in recent years.

The direct sales industry in Taiwan seems to have disappeared inexplicably, with many former direct salespeople no longer promoting their products.

The industry has undergone a transformation, with many companies changing their names or shifting to e-commerce, micro-business, courses, or investment.

Online direct sales have begun to utilize live sales with the advancement of technology.

Many new brands have emerged, with salespeople reporting significant annual revenue.

Amway is leaving the Russian market.

Herbalife has stopped shipping products in Russia and closed 62 sales centers.

Avon and Oriflame are going through hard times and may potentially leave the Russian market.

Avon and Oriflame employees are preparing for the worst and expecting a potential exit from Russia.

Avon and Oriflame products are in short supply, which may indicate problems with production.

Domestic manufacturers are filling the niches left by foreign companies and actively developing in the direct sales industry.

Russian direct sales companies demonstrate high crisis resistance and will not be closed for political reasons.

The departure of foreign brands will not cause a decline in the direct sales industry, but rather create opportunities for domestic brands.

The MLM business model deployed by Educational Development Corp. (EDUC) is vastly different from dodgy tactics used by other players, with no requirement to hold inventory.

EDUC's sales are a function of the number of active sales consultants, with commissions paid to consultants being a variable cost.

The company has achieved significant operating leverage due to its MLM business model, allowing it to scale quickly and have flexibility.

Despite negative press around MLM business models, EDUC's model has been shown to work sustainably and increase revenue growth over the long run.

The COVID-19 pandemic has driven home-based learning and benefited EDUC, with the company's consultant count almost doubling from 33 to 60 thousand.

The post-pandemic work-from-home trend is expected to persist, supporting EDUC's sales, and the active consultant count may not fall back to pre-pandemic levels.

Management has increased its dividend per share and capital expenditures, indicating confidence in the company's future growth.

EDUC has increased its inventory in anticipation of increased sales, with a lead-time of four to six months to have a title printed and delivered.

The company's MLM business model is not without risks, including stringent regulation and the potential for consultants to quit or switch to other employment.

Some MLM companies are switching to the direct sales model to differentiate themselves from fraudulent pyramid and money-circulation schemes.

Title:

Content:     The Economic Times daily newspaper is available online now.

    Direct selling industry grew 12% in 2022-23, crosses Rs 21,000 crore in turnover: IDSA

    Synopsis

    Indian Direct Selling Association and Kantar's report revealed a 12% industry growth to Rs 21,282 crore turnover. The sector aims to strengthen with government support, distinguishing from fraudulent schemes through regulatory amendments.

    India’s direct selling industry grew over 12% year-on-year in 2022-23, clocking an overall industry turnover of Rs 21,282 crore, an annual survey report released by the Indian Direct Selling Association (IDSA) and compiled by market researcher Kantar said on Wednesday.

    The report noted that the sector grew 8.3% by CAGR in the four-year period between 2019-20 and 2022-23.

    According to the report, wellness and nutraceutical products contributed 73.5%, while cosmetics and personal care accounted for 11.3% of the industry’s overall turnover. The number of active direct sellers touched around 86 lakh from 84 lakh in 2021–22, the survey said.

    Vivek Katoch, chairperson of IDSA, said in a statement: “The direct selling industry is poised to strengthen further in the years to come on the back of a promising regulatory framework by the government.”

    India ranked 11th in the global direct selling ranking in 2022, up from 15th in 2019.

    Direct selling companies sell to consumers through direct-seller members and not through retailers. Amway, Oriflame, Herbalife and other direct selling companies have been pushing for tighter regulation and clarity from the government, to differentiate them from multi-level-marketing ponzi companies.

    Mid last year, the consumer affairs ministry modified the Consumer Protection (Direct Selling) Rules, 2021, through a notification, to distinguish between fraudulent pyramid and money-circulation schemes and legitimate, direct-selling players. IDSA executives have said further clarity is needed in the definition of 'network of sellers'.

    (You can now subscribe to our Economic Times WhatsApp channel)
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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

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    Stories you might be interested in

The Indian government has modified the Consumer Protection (Direct Selling) Rules, 2021, to distinguish between legitimate direct-selling players and fraudulent schemes, which may lead to some MLM companies closing or switching to the direct sales model.

Direct selling companies, which may include former MLM companies, sell to consumers through direct-seller members and not through retailers, with companies like Amway, Oriflame, and Herbalife pushing for tighter regulation and clarity from the government.

The direct selling industry in India grew 12% in 2022-23, crossing Rs 21,000 crore in turnover, which may indicate a shift towards the direct sales model.

The number of active direct sellers in India touched around 86 lakh in 2022-23, up from 84 lakh in 2021-22, suggesting that some MLM companies may be switching to the direct sales model.

Herbalife's stock has fallen 64% year-to-date.

Title:

Content: 'Direct Selling' - Avon, Tupperware - Is Extinct

Nov. 18, 2022 11:25 AM ETHLF, MED, NTCO, NUS, PRI, TUP, USNA3 Comments
Robert FitzPatrick
394 Followers

Summary

  • Direct Selling became obsolete generations ago. So how is it that millions today get recruited for "income opportunity" in "direct selling" and billions are traded on "direct selling" stocks?
  • Avon and Tupperware are cited by "multi-level marketing," or MLM, promoters as "proof" that MLM, e.g., Amway, Herbalife, is "direct selling."
  • Usable data on actual income and churn rates of MLM "direct sellers," market saturation, and retail sales to actual customers are not provided.
  • In fact, Avon and Tupperware for years have been walking dinosaurs, still trying to do "person-to-person" sales to end-users with commodity products, while MLMs hype "unlimited" income.
  • The shrunken and devolved state of Avon and Tupperware today reveals that direct selling is extinct. MLM is not, and never was, direct selling.

It is generally accepted that "direct selling" was killed off generations ago by mass merchandising, big box stores, mail-order and then the internet, among other societal changes. The "Fuller Brush man" is long gone. No one's at home. No one wants or needs or has time for a "personal" salesperson. Everything's in stores or online. And, even when "direct selling" still lived, no one ever went into that tough line of work thinking they would get rich from it.

Yet, each year, millions are recruited, and pay thousands, for the "opportunity" to work as "direct sellers," with promises and expectations of "unlimited" income. The number involved today is many, many times greater than ever worked in that "extinct" field decades ago. Billions are being traded on Wall Street for shares of "direct selling" companies. How can this be?

In my book, Ponzinomics, the Untold Story of Multi-Level Marketing, I document the death of "direct selling" and the 1945 invention of "multi-level marketing," or MLM. I describe how "MLM" falsely assumed direct selling's revered old identity. I trace MLM from its Adam, a little California-based company called "Nutrilite," to today's "industry" led by Amway, Herbalife (HLF) down 64% YTD, Nuskin (NUS) down 31%, USANA Health Sciences (USNA) down 49%, Primerica, Inc. (PRI) down 13%, and Medifast (MED) down 45%. MLM's financial solicitations for consumers to become "direct sellers" have reached into – and led to losses for – virtually every household in America.

In the newly invented "MLM," the main source of revenue shifted from end-user customers to the salespeople themselves who are incentivized to "be their own customer" by buying their own products. Obviously, no one makes money purchasing their own inventory, but MLM offered a unique reason to do so – "unlimited" income potential.

No More Need to Knock on Doors

All MLM "direct sellers" can potentially gain "unlimited" income by recruiting an "endless" chain of other "direct sellers." No need to pound the pavement and get rudely rejected at front doors any more. Each "direct seller" on the chain has to meet a quota to "qualify" for future rewards from their recruits who, in turn, are their "own customers" and recruiters too, ad infinitum. The chain can grow without continuous personal effort. The qualifying quota can usually be met by just making a personal monthly purchase of inventory. "Commissions" on all these transactions, all the way down to the "last ones in," flow up the chain. In the MLM pay plan, most of the total commissions go to the top 1%. So, all new "direct sellers" try mightily to recruit (and buy) their way to those top ranks. Of course, only a tiny few can ever be at the top.

Some people argued this is a pyramid recruiting scheme, inherently unfair and deceptive, and a counterfeit of direct selling. In the design and the pay plan, bottom ranks – the vast majority – will inevitably lose. They said constantly adding salespeople in any area destroys profitable retail selling potential, if any exists to start with. They cited data on 90-99% loss rates and huge churn rates among new "recruits" and asked, where are the retail "customers"?

While offering no data on retail customers or salespeople losses or market saturation, MLM promoters offered "proof" that MLM is direct selling by pointing to two long-established and respected direct selling companies in their ranks, Avon and Tupperware (TUP). Both companies were members of the Direct Selling Association, DSA, and both were "direct selling" icons, Avon for its "ladies" and Tupperware for its "parties." To any pyramid scheme accusations, MLM promoters indignantly countered: "Are you calling Avon and Tupperware pyramid schemes?"

Walking Dinosaurs

The truth for both companies is very different from the MLM-spin. Avon and Tupperware used to have differentiated products and real consumer demand. Their salespeople made money from their own retail sales. But moving into the 21st Century, Avon and Tupperware became walking dinosaurs, vestiges of the extinct era of "direct selling." They were still trying to base their businesses on their historical brands and on person-to-person retail sales to real customers, as direct selling companies always used to do.

Despite MLM's citing Avon and Tupperware, and thereby bestowing legitimacy on the "MLM" members of the Direct Selling Association, deep differences between those icons of the old era and MLM burst into public view in 2013-14. The two companies publicly quit the Direct Selling Association, charging ethics violations and DSA-member connections to pyramid schemes.

Avon's Long Good-Bye

Avon had been a true direct seller for decades before MLM was invented. But as the door-to-door model faded, Avon began a long decline. In 2000, Avon began shifting its focus to "incentivizing" salespeople to recruit more salespeople and getting them to buy inventory, MLM-style. In 2009, during the Great Recession, Avon ran its most expensive ad in history, on television during the Super Bowl. The ad never mentioned any Avon products! It only solicited "salespeople." Still, global revenue dropped continuously over the next 10 years. Avon stock value fell from over $30 to just over $3.

Finally, Avon split off its faltering North American business and sold it to the Korean company, LG Household & Health Care. Avon claimed to have 250,000 sales representatives in North America. The remaining global business was later sold to the Brazilian MLM, Natura (NTCO) down 50% YTD, which also owns the retailer, Body Shop. Though Avon global was much larger, Avon shareholders traded 3 shares of Avon for just one in Natura.

The Korean-owned segment of Avon in North America is now classic MLM, selling the proverbial MLM "income opportunity" along with "health" supplements, make-up, jewelry, clothing, scented candles, even toothpaste.

On the Canadian Avon website, Avon promotes the "income opportunity," urging prospects in large bold black type: "Think big. Sell Avon part-time, full-time, you decide how much! It’s your business, your way!"

A disclosure (legally required in Canada, but not in the USA) appears midway down a long webpage in tiny, barely visible gray lettering: "The 2020 earnings of a typical Avon Leadership Representative was between $0 and $2,620 in commissions and bonuses." That's $0 to $50 a week, before subtracting all costs! And the "disclosure" does not break out how much of that tiny return comes from personal sales or the "downline."

Avon quietly rejoined the Direct Selling Association. The Brazilian company, Natura, which took over Avon's global business in 2020, has lost over 60% of its stock value in the last year.

Tupperware on the Brink

Tupperware was one of the first "party plan" companies, which are technically a small subset of MLM. They employ an "endless" recruiting chain, but are more rooted in retail sales transacted at "parties." Tupperware used to have a popular brand with innovative, differentiated products. But, as true direct selling began to disappear, Tupperware went into decline. It added MLM-type "health and beauty" commodities to bolster recruiting appeal but then deleted them. This year, it began also selling its products in Target department stores. Its kitchen-related goods are generally not distinct from other brands. A 10-months "Income disclosure" for Canada (not published in the USA) showed that half the "party planners" were classified "inactive," earning less than $30 for the period on average. 94% of the "active" ones reportedly received about $12 a week on average, before expenses.

In the last 5 years, the stock value of Tupperware has dropped over 90%. Its latest financials warned investors the company may violate loan agreements, setting off speculation Tupperware might declare bankruptcy.

The shrunken and devolved state of Avon and Tupperware, the most famous brand-icons of "direct selling," makes citing them as a defense of "multi-level marketing" as extinct as their old business model.

This article was written by

394 Followers
Robert L. FitzPatrick is the author of the new book, Ponzinomics, the Untold Story of Multi-Level Marketing (2020),the first comprehensive history and analysis of the "MLM" phenomenon, addressing its political influence, propaganda techniques and use of cult persuasion. FitzPatrick is an expert in examining and revealing deception and fraud in Ponzi schemes, pyramid schemes and bogus home-based businesses. He served as expert or consultant in more than 30 court cases involving pyramid schemes and multi-level marketing. He is co-author of False Profits (1997), an examination of the values and beliefs that support the delusions of pyramid schemes. He was featured on NBC Dateline, ABC World News, and CBS 60 Minutes, the documentary film, Betting on Zero and the podcast, The Dream.He has been quoted in many newspapers around the world, including the New York Times and Wall Street Journal. His booklet, Pyramid Nation, has been translated to Chinese and used by government regulators in writing China's first laws on pyramid schemes. His booklet, "The 10 Big Lies of Multi-Level Marketing", has been translated into four languages and posted on numerous websites. His White Paper, "The Main Street Bubble", which details the extensive influence-buying of the direct selling industry was featured in a CNBC Documentary, Selling the American Dream. In 2005, he delivered a seminar to in Colombo, Sri Lanka to central banking representatives from that country as well as India, Bangladesh, Bhutan, Maldives and Nepal. Robert FitzPatrick has developed informational resources for consumers, journalists, academics and regulators including a multi-media PowerPoint presentation and a statistical analysis of the losses suffered by participants in pyramid selling schemes. He also published a widely read booklet on the landmark federal case brought against the Amway Corporation. He is a expert network member of GLG Research, and Coleman Research Group, as well as other networks of experts who are referred to clients for consultation, speaking and report writing. In this capacity, he has provided expert consultation to financial many analysts who sought information about multi-level marketing companies and pyramid and Ponzi schemes. Robert FitzPatrick co-founded and serves as president of Pyramid Scheme Alert, the first international organization to expose and prevent pyramid scheme fraud. He personally responds to hundreds of consumer and news media inquiries each year. He has served as consultant and expert witness for Attorney General or State Attorney offices in four states, the US Dept. of Justice, and in numerous cases involving distributor fraud and pyramid schemes. Robert FitzPatrick is not an investor in multi-level marketing companies. He has never owned and never plans to own stocks of multi-level marketing companies. He has never been compensated based on any stock's performance. He does not offer investment advice and he is not an attorney.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is for educational purposes only. It discusses fundamentals of the "direct selling" business model and the evolution of "multi-level marketing."

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Nuskin's stock has fallen 31% year-to-date.

USANA Health Sciences' stock has fallen 49% year-to-date.

Primerica, Inc.'s stock has fallen 13% year-to-date.

Medifast's stock has fallen 45% year-to-date.

Natura's stock has fallen 50% year-to-date.

Avon's stock value fell from over $30 to just over $3 in 10 years.

Tupperware's stock value has dropped over 90% in the last 5 years.

94% of Tupperware's active party planners received about $12 a week on average, before expenses.

Some MLM companies have closed or switched to a direct sales model in recent years.

Title:

Content: Do direct sales students disappear? He is shocked that "no one can find" the truth inside the industry: turn this line
▲ Original PO said that students who used to do direct sales seem to have disappeared now. (Illustration / Reprinted from pixabay)
Posts Tagged ‘ CTWANT ’
There are hundreds of occupations, and everyone's choices are different, and direct selling is one of them.
However, a recent Internet friendly strange article said that for many years, many students or friends who do direct sales industry in the predecessor side often call to pull people, but in recent years it seems to have gradually disappeared, so that the original PO questioned "no one found that Taiwan's direct sales industry has disappeared in recent years?"
The original PO on PTT said that I remember many years in the front desk of many direct sales industry in Taiwan, "a bunch of classmates and friends who have not seen you for a long time suddenly contact you, I know he wants to promote direct sales with you", but the original PO found these direct sales people, in recent years seems to have disappeared inexplicably. Has the sales industry disappeared in recent years, and why has it become so? ”
[Advertisement] Please continue reading...
A post, caused a heated discussion, many netizens for the original PO answer, in fact, did not disappear just transformation, "change the name, e-commerce, micro-business, courses, investment", "direct sales have long been transformed, which will directly talk to you direct sales, now tell you about micro-business", "many new brands, sales have said their annual revenue", "you do not have a lot of", "," "Online direct sales have begun with the advancement of technology," and "it should all be turned into live sales."
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The direct sales industry in Taiwan seems to have disappeared inexplicably, with many former direct salespeople no longer promoting their products.

The industry has undergone a transformation, with many companies changing their names or shifting to e-commerce, micro-business, courses, or investment.

Online direct sales have begun to utilize live sales with the advancement of technology.

Many new brands have emerged, with salespeople reporting significant annual revenue.

Amway is leaving the Russian market.

Title:

Content: Russian Federation
Moscow
+ 21 °
Society27 July 2022 10: 40
Amway is leaving the Russian market.
Oriflame and Avon next?
The largest players in various fields continue to leave the domestic market.
Direct selling is no exception.
This opens wide horizons for domestic brands
Dmitry VASILIEV
Photo by Shutterstock
SNOW KOM
March 11, among the first who made a statement about the termination of work in Russia, was the American Herbalife.
62 sales centers stopped shipping their products.
Today, such news does not seem out of the ordinary – foreign companies continue to close.
Rumors that Amway (USA) is also about to join the ranks of “sinking ships ” went for four months and, finally, found confirmation.
At the end of June, the global board of directors announced the official decision: “We have reached a point where economic, technological, organizational and operational circumstances have made it impossible for us to continue our work. ”
Meanwhile, Amway is the number one direct selling company in the world and of course many companies follow it.
STORMITH!
It is known that two other foreign brand leaders – Avon (USA) and Oriflame (Sweden) – are also going through hard times today.
According to various sources, employees admit that they do not feel a sense of stability: “The decision to leave Russia is made by top management located abroad.
We are kept to the last in the dark, in limbo, ” admits an Avon employee, who wished to remain incognito in the framework of the publication. – Do my colleagues and I expect that the story of “Amway ” will repeat itself?
Yes, unfortunately, we are preparing for the worst. ”
According to the analysis of the sites, Avon and Oriflame products are in short supply, which may indirectly indicate problems with production.
And although neither Avon nor Oriflame made any official statements, their actions are in many ways reminiscent of Amway.
ALL YOUR OWN, MOTHERLY
As you know, a holy place is never empty.
The released niches are filled by domestic manufacturers: new Russian brands are actively developing, and already well-known market players are increasing their capacities.
The departure of foreign brands will definitely not cause a decline in the direct sales industry.
Moreover, business analysts indicate that Russian direct sales companies demonstrate high crisis resistance.
First of all, they will not be closed for political reasons.
Secondly, in the conditions of limited choice in the labor market, economic recession and rising prices, they offer people the opportunity to earn extra money, as well as the purchase of high-quality goods for personal use with a good discount.
Of course, the most affected are those who built a business in foreign companies and planned to transfer it to children.

Herbalife has stopped shipping products in Russia and closed 62 sales centers.

Avon and Oriflame are going through hard times and may potentially leave the Russian market.

Avon and Oriflame employees are preparing for the worst and expecting a potential exit from Russia.

Avon and Oriflame products are in short supply, which may indicate problems with production.

Domestic manufacturers are filling the niches left by foreign companies and actively developing in the direct sales industry.

Russian direct sales companies demonstrate high crisis resistance and will not be closed for political reasons.

The departure of foreign brands will not cause a decline in the direct sales industry, but rather create opportunities for domestic brands.

The MLM business model deployed by Educational Development Corp. (EDUC) is vastly different from dodgy tactics used by other players, with no requirement to hold inventory.

Title:

Content: Educational Development Corp.: Growth Risk Might Be Overblown

Moat Investing
1.46K Followers

Summary

  • EDUC is the exclusive US co-publisher of educational children's books produced by famous Usborne Publishing by leveraging multilevel marketing (MLM) strategy.
  • It has strong fundamentals, fair valuation, and a compelling growth story that is being ignored by the market.
  • We arrived at a target price of $12.4 to $14.6 without incorporating any future growth and expansion in operating margins.

Investment Idea

Educational Development Corporation (NASDAQ:EDUC) has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, and management has skin in the game (owns 23% of shares outstanding). For these reasons, we remain bullish.

Business Overview

EDUC is the exclusive US co-publisher of educational children's books produced in the UK by Usborne Publishing, and EDUC also exclusively publishes books through their ownership of Kane Miller.

The business operates in two segments:

Home Business Division (Usborne Books & More or "UBAM") -(95% of revenues) - This segment sells books through consultants directly to consumers using a multilevel marketing model (MLM). Consultants sell books by hosting home parties, social media, and hosting book fairs with schools and public libraries.

Publishing Division – (5% of revenues) - Sells books to bookstores, toy stores, and other retail outlets.

If you would like to get the gist of our thesis, you can watch our YouTube video below.

Value Proposition

The children's books market is very competitive and fragmented. There are more than 135 publishers of children's books in the US. EDUC is competing with Scholastic and Pearson, which have extensive resources to run marketing campaigns and are well-positioned in both online and offline distribution channels. Although EDUC has a little moat, they have some strengths to their business model that will allow long-term value creation.

They have an exclusive and long-term relationship with Usborne. Therefore, clients of the Usborne in the US must acquire their books via EDUC. Also, there is a consensus that Usborne books are high quality and among the industry's best.

Their sales are a function of the number of active sales consultants. Commissions paid to consultants are a variable cost, and they are only paid when sales are made. Although this makes SG&A grow as the top line grows, since it's not a fixed cost to the business, it allows EDUC to achieve significant operating leverage. Also, it allows them to scale quickly and have flexibility.

Direct sales strategies like multilevel marketing are commonly referred to as pyramid and Ponzi schemes. However, the table below shows that it does work sustainably and increases revenue growth over the long run despite the negative press.

Source: S&P Capital IQ

Why might EDUC be mispriced?

There are multiple factors. Firstly, it's a micro-cap. This usually means there is limited analyst coverage, and due to the stock's illiquidity, there is low institutional interest. These factors, coupled with others, leave the company under the market radar despite its business is doing well and has promising perspectives.

Second, there is negative press around the MLM business models. The MLM model deployed by EDUC is vastly different from dodgy tactics used by other players. For example, many MLM models require the seller to purchase the inventory from the company before selling. However, this reduces the risk for the company and puts extra pressure on the seller, which can be left with expensive inventory that cannot be sold or returned. In the case of EDUC, there is no requirement to hold inventory.

Third, markets might be believing that the business's tailwinds are temporary due to COVID. Amidst Covid, schools were closed, and parents were working from home; this drove home-based learning and benefited EDUC. Additionally, unemployment rates soared, and many were left looking for work. This allowed EDUC almost to double its consultant count from 33 to 60 thousand. We believe the post-pandemic work from home trend will persist, supporting their sales. Furthermore, the active consultant might not fall back to the pre-pandemic level as these roles are usually part-time work which fits nicely with the trending gig economy.

The evidence speaks louder than words

There are also some clues from the management that revenue generated amidst pandemics might be sticky.

Management increased its dividend per share from $0.20 to $0.32. A dividend increase should be seen as a signal that a business is in solid financial shape and management is confident about its future.

Management increased capital expenditures to $4.15 million from $0.64 in 2020. This expenditure was primarily associated with equipment purchases to increase daily shipping capacity. These are some early signs that management is expecting positive growth going ahead. Additionally, this also improves their margins as amidst Covid they paid a premium for extra shifts.

EDUC has increased its inventory; the inventory build-up is approximately 60% of its total assets. This has been in anticipation of an increase in the sales, as it takes a four to six-month lead-time to have a title printed and delivered to them.

Source: Koyfin

Value Investing Approach: Asset Value

To calculate the actual asset value of the company, we tried to replicate the business from scratch. Therefore, below you will find the last reported balance sheet, where we have made some adjustments.

The value of the land recorded on books was $4.1 million. They own a 40-acre complex at 5402 South 122nd East Ave, Tulsa, with 400,000 square feet of office and warehouse space. They also own a facility located at 10302 East 55th Place, Tulsa, that has 105,000 square feet of usable space. According to our channel checks with realtors, the average price per square foot of their land lies between the range of $100 to $115. To remain conservative, we took the average price square feet to be $85. Therefore, we estimate the value of its land to be $42.9 million.

They also have a network of around 55,000 active consultants. To construct such a network from scratch is both costly and time-consuming. We estimate the replication cost of this network to be around $27.5 million ($500 per consultant). This is also roughly five months of sales commission cost incurred by EDUC in the fiscal year 2021.

The rest of the items are taken on book value.

Based on the above adjustment, we arrive at the total asset value of 106.7, and the fair value per share to be $12.4

Source: Moat Investing

Value Investing Approach: Earnings Power Value

This approach allows us to value EDUC without incorporating any growth. Here, we consider the business's historical figures (last five years) to get the normalized earnings and operating margin. To calculate the sustainable earnings, we smoothed out the company revenues for the previous five years to $131 million and then calculated the firm's average operating margin (6.5%) to arrive at the sustainable Operating Income of $8.5 million.

We add back the expenses typically spent on growth, and we estimate around 4.5% of sales is spent on growth marketing, i.e., promotion, advertisement, and discounts. Hence, we add this back as this expense is not required if the firm was not aiming to achieve growth.

We assume the normalized tax rate to be 26% and the estimated cost of equity at 9%. Therefore, we estimate Earning Power Value of the operating business to be $134 million. To that, we add the non-operational cash ($1.8 million), and we subtract long-term debt (10.8); we arrive at an implied market cap of $125.6 million or $14.6 price per share, with 12.3% upside potential, without incorporating any growth or expansion in operating margins.

Source: Moat Investing

Risks to Our Investment Case

  • Stringent regulation regarding MLM companies. For instance, the requirement to treat consultants as employees. This could have implication when it comes to taxation, wages paid and welfare concerns for workers. This could, in turn, shrink the bottom line or, worse, business model tatters.
  • The most straightforward risk is consultants quitting or switching to find other employment as the US economy improves. However, within our valuation model, we have smoothed the growth of revenue in the last five years, which is a function of l consultants recruited. Even if there is some mean reversion in terms of consultants working with EDUC due to the COVID base effect, our thesis would be less impacted.
  • As highlighted earlier EDUC’s inventory level is a significant portion of its asset. Whatever reason they become unsalable (i.e., change in taste or controversy in terms of published content) could impact our valuation.
  • Oil prices have increased significantly since last year (see below). Shipping costs are amongst the most significant component of its COGS; further rise in oil prices (consequently increasing shipping cost) could make it difficult for EDUC to remain profitable.

Source: Trading Economics

Conclusion

EDUC has an attractive value proposition, strong financials, and optionality of significant growth ahead due to structural changes caused by COVID. On top of that, the valuation is reasonable, management has skin in the game (owns 23% of shares outstanding), and investors are not even paying for any future growth at current prices. For these reasons, we remain bullish.

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EDUC's sales are a function of the number of active sales consultants, with commissions paid to consultants being a variable cost.

The company has achieved significant operating leverage due to its MLM business model, allowing it to scale quickly and have flexibility.

Despite negative press around MLM business models, EDUC's model has been shown to work sustainably and increase revenue growth over the long run.

The COVID-19 pandemic has driven home-based learning and benefited EDUC, with the company's consultant count almost doubling from 33 to 60 thousand.

The post-pandemic work-from-home trend is expected to persist, supporting EDUC's sales, and the active consultant count may not fall back to pre-pandemic levels.

Management has increased its dividend per share and capital expenditures, indicating confidence in the company's future growth.

EDUC has increased its inventory in anticipation of increased sales, with a lead-time of four to six months to have a title printed and delivered.

The company's MLM business model is not without risks, including stringent regulation and the potential for consultants to quit or switch to other employment.


Germany's decision to shut down its last three nuclear power plants has been criticized by nuclear energy advocates worldwide, but there is no significant push in Germany to reverse it.

The German government has deemed nuclear power as non-green and unsustainable.

Germany pledged to phase out nuclear power in the 2000s, and the 2011 Fukushima disaster prompted Germany to accelerate its nuclear phase-out.

Germany aims to achieve climate neutrality by 2050 by increasing renewable energy use and moving away from nuclear energy.

Removing nuclear power can cause major economic losses in countries unable to produce their own energy, and nuclear power generates little carbon dioxide and is relatively inexpensive.

Nuclear power currently lacks a suitable alternative, and abandoning nuclear power can hinder net zero emissions efforts by 2050 due to increased greenhouse gas emissions.

Removing nuclear power could hinder a country's ability to meet its net-zero targets, as it is a low-carbon source of power.

The disposal of nuclear waste is a significant challenge due to the lack of a comprehensive solution for its harmful isotopes.

Nuclear energy is a low-carbon source of electricity that poses significant environmental and health risks, including the risk of nuclear accidents, like Fukushima and Chernobyl.

Nuclear power provides baseload low-carbon energy and on-demand load following that could be lost if removed, and high renewable penetration may require nuclear power to ensure system reliability.

Removing nuclear power could hinder climate change targets due to its low-carbon benefits and flexibility, and could increase reliance on fossil fuels.

Nuclear power is a stable and reliable source of energy, and France believes nuclear energy is necessary to achieve carbon neutrality by 2050, a potential advantage of keeping it in the grid.

Nuclear power and intermittent renewables can partner in a zero-carbon energy economy.

Germany's decision to shut down its last three nuclear power plants has been criticized by nuclear energy advocates worldwide, but there is no significant push in Germany to reverse it.

Title:

Content: Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
Chairman of the Board of Directors and Editors
I'm sorry.
Mohamad Elbaz
EXPRESS: Germany ’ s exit from atomic energy sector affects Europe ’ s largest economy
Germany ’ s closure of the country ’ s last three nuclear reactors and its eventual exit from the atomic energy sector raises concerns about the impact of the decision on the European Union ’ s largest economy.
Germany ’ s action could deal a blow to the technology they see as a clean and reliable alternative to fossil fuels.
Berlin is implementing its plan to limit electricity generation to renewable sources by 2035.
Earlier this week, Germany shut down its last three nuclear power plants as part of Berlin's plan to limit power generation to renewables by 2035, ending a six-decade programme that has sparked one of Europe's most powerful protest movements.
Other industrialized countries, such as the United States, Japan, China, France and Britain, rely on nuclear power to replace the fossil fuels that are warming the planet, and Germany ’ s decision to stop using both has been met with some skepticism, as well as unsuccessful last-minute calls to halt the shutdown, the report said.
Nuclear energy advocates around the world have criticized the German shutdown, realizing that the action taken by Europe ’ s largest economy could deal a blow to technology they see as a clean and reliable alternative to fossil fuels.
The German government has acknowledged that in the short term, the country will have to rely more on polluting coal and natural gas to meet its energy needs, even as steps are taken to dramatically increase electricity production from solar and wind power, and Germany aims to be carbon neutral by 2045.
But officials like German Environment Minister Stevie Lemke say the idea of a nuclear renaissance is a myth, citing data showing that the share of atomic energy in global electricity production is shrinking.
The construction of new nuclear plants in Europe has faced significant delays and cost overruns.
Limki noted that the construction of new nuclear plants in Europe has faced significant delays and cost overruns, and said the money spent on maintaining old reactors or building new ones would be better spent on installing cheap renewables.
Experts such as Claudia Kemfert of the German Institute for Economic Research in Berlin say the 5% share of German electricity currently coming from its three remaining reactors can be easily replaced without risking power outages.

The German government has deemed nuclear power as non-green and unsustainable.

Title:

Content: Home / News / World /  Germany quits nuclear power; shuts final 3 plants
Back

Germany has shut its final three nuclear plants, marking the end of the country's end of nuclear era that has spanned more than 60 years.

Nuclear power has long been contentious in Germany.

The move has come as Germany's eyes achieve its green goal. Steffi Lemke, Germany’s Federal Minister for the Environment and Consumer Protection and a Green Party member, "The position of the German government is clear: nuclear power is not green. Nor is it sustainable".

Closure of three nuclear plant's history:

Germany shut three plants-- Emsland, Isar 2, and Neckarwestheim, representing the culmination of a plan set in motion more than 20 years ago.

During the 1970s, a strong anti-nuclear movement emerged in Germany. The movement gave birth to the green party, which is now part of governing coalition.

However, it was in the 2000s the German government pledged to phase out nuclear power and start shutting down plants.

But in 2009, a new government came to power and it seemed brief as if nuclear would get a reprieve as a bridging technology to help the country move to renewable energy.

Then Fukushima happened. In 2011, an earthquake and tsunami caused three reactors of the Fukushima Daiichi power plant to melt down.

Three days later then-Chancellor Angela Merkel who was previously pro-nuclear, announced Germany would accelerate a nuclear phase-out, with older plants shuttered immediately.

Russia's invasion of Ukraine provided another plot twist.

Germany isn’t the only country committed to walking away from nuclear — Italy gave up the technology in 1990, and Lithuania recently struck a deal to dismantle its Soviet-era reactors, which have sat idle for over a decade. But in many advanced economies, nuclear is experiencing a resurgence.

On Sunday, Finland will start regular power production at Europe’s newest and biggest reactor. The 1,600-megawatt Olkiluoto-3 unit that faced years of delays had been planned to enter commercial production on Monday. France is planning to build at least six new reactors by 2050 as well as experiment with smaller, modular ones. The UK has similar ambitions. And even in Japan, after a decade of paralysis following the nuclear accident in Fukushima, the public is warming up to the use of nuclear power. The Japanese government wants to restart reactors that have sat idle since the disaster and to extend the lifespan of existing units.

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Germany pledged to phase out nuclear power in the 2000s, and the 2011 Fukushima disaster prompted Germany to accelerate its nuclear phase-out.

Germany aims to achieve climate neutrality by 2050 by increasing renewable energy use and moving away from nuclear energy.

Removing nuclear power can cause major economic losses in countries unable to produce their own energy, and nuclear power generates little carbon dioxide and is relatively inexpensive.

Title:

Content: News of Hong Kong
Giving up nuclear energy is easy.
At the 28th United Nations Climate Change Conference in Dubai, more than 20 countries advocated tripling nuclear power to current levels in order to achieve net zero emissions by 2050.
Interestingly, some of these countries, such as the United Kingdom, France, Japan and South Korea, which previously supported reducing their reliance on nuclear energy, have now changed their positions.
Remembering the 2011 earthquake in Japan, which caused a serious accident at the Fukushima nuclear power plant, the people of all countries to reflect on the drawbacks of nuclear power development, and there was an unprecedented anti-nuclear wave everywhere.
Many environmental groups and idealists have called on governments to abandon nuclear weapons, so that the earth will have a living environment free of nuclear pollution.
However, the development of the past decade or so has proved that this demand is impossible. After all, nuclear energy accounts for a large proportion of national electricity, and the suspension of operation will cause major losses to the economies of countries that cannot produce their own energy.
Denuclearization also raises another problem, which is to increase the pollution of the earth.
As we all know, the main driving force of economic development is electricity, and power generation methods are firepower, hydropower and nuclear energy.
Fuels such as oil and coal emit large amounts of carbon dioxide, damaging the environment.
By contrast, nuclear power generates very little carbon dioxide and costs less.
Once countries get rid of nuclear weapons and become more dependent on oil or coal, it is even less environmentally friendly.
Science and reality show that because there is currently no optimal alternative to nuclear power, it is difficult to give up nuclear power.
As a responsible government, we can only continue to develop nuclear energy to meet the country ’ s growing energy needs.
Therefore, the mainstream practice of all countries in the world is to actively accept nuclear power, for example, Japan has abolished the life limit of nuclear power plants, and decided to maximize the use of nuclear power plants to more than 60 years.
The German government, which has insisted on denuclearization, earlier admitted that its energy policy was a failure.
Idealists are often lauded for their pursuit of truth, but some of the ideas they promote are also unrealistic.
In recent years, governments have stopped advocating a ban on the development of nuclear power, which just reveals the drawbacks of idealism.
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Nuclear power currently lacks a suitable alternative, and abandoning nuclear power can hinder net zero emissions efforts by 2050 due to increased greenhouse gas emissions.

Removing nuclear power could hinder a country's ability to meet its net-zero targets, as it is a low-carbon source of power.

Title:

Content: Top

Powering the future

X

Responding to a question in the Rajya Sabha on December 16, Jitendra Singh, Minister of State in the Department of Space and Department of Atomic Energy, noted that India currently had a nuclear power capacity of 6,780 MW and the government planned to expand it to 22,480 MW by 2031 as part of a plan for India to meet its net-zero targets. The minister also noted that the Centre had already given 'in-principal' approval for setting up six new nuclear plants in Jaitapur in Maharashtra with a capacity of 1,650 MW each. At a combined capacity of 9,900 MW, this would be the largest-ever expansion of India's nuclear power portfolio. But the Shiv Sena has taken up an aggressive opposition to the construction of the nuclear plants, supporting locals in saying that the project cannot be 'imposed' on the state of Maharashtra. Locals in the area are reportedly concerned that the nuclear plants will damage the environment and particularly affect the mango and cashew orchards in the region. BJP unit chief for Maharashtra, Chandrakant Patil, has denounced such objections from the Sena as being 'politically motivated' given that the project is expected to create 50,000 jobs in the state and bring in annual revenues of around Rs 21,000 crore. But leaving aside the debate over whether Shiv Sena's objections are political or not, they do cut to a very relevant discussion regarding nuclear energy in the age of climate change. Is the nuclear technology environment friendly or not? This is, after all, no longer a simple academic question. In the age of climate change and net-zero targets, nuclear energy is one of the many options on the menu for India and the world at large to move towards de-carbonisation. Proponents of nuclear technology say that nuclear power is a solution to climate change that came up even before the issue had taken centre stage in global politics. These same supporters maintain that nuclear technology has the ideal mix of high energy potential, low greenhouse emissions and a high degree of reliability when it comes to the ever-growing demand for power. But opponents of such a view decry the sweeping generalisations, biases and incomplete information that feed an almost-falsified narrative of nuclear energy that 'greenwashes' all its less than attractive bits. Though there is plenty of debate in this regard, it is generally accepted that nuclear energy produces a lot less carbon emissions as compared to coal in the process of energy production though the emissions are still worth noting if compared to the emissions created while using wind or solar energy. Critics also say that nuclear power plants are generally too expensive and too time-consuming to build as a practical solution for decarbonising the global economy on a tight timetable that the rapid climate change has handed to humanity. Indeed, the general view is that investment in nuclear technology distracts nations from making larger investments in wind, hydro, solar, etc., energy sources. Then, of course, there are the more significant public image concerns that nuclear power has in regards to safety issues. Nuclear accidents are rare and nuclear power plants on average are known to cause less worker accidents and deaths in the nearby community when compared to something like a coal power plant. But when something does go wrong with a nuclear power plant, it is not just nearby communities that suffer but rather nations as a whole. Consider the example of the Fukushima Daiichi accident in 2011 that was frightening enough to make the Japanese government back away from nuclear power for nearly a decade. Though nuclear power plants often bring jobs and subsidies to communities, it is understandable why they would, at least initially, be less than enthusiastic about having a nuclear power plant nearby. Then there is the issue of nuclear waste disposal, a real limiting factor for the technology given that humanity currently has no way of comprehensively dealing with nuclear waste that is produced as a result of energy production. At best, humanity can store these harmful isotopes underground, sometimes in deep geological disposal sites. But even these sites are not an absolute guarantee that the nuclear waste will not eventually leak out and cause contamination over its very long lifespan. But all these concerns do not mean that nuclear technology is currently at a dead-end. As the Indian government has stated, nuclear power is still an essential part of plans to attain net-zero emission targets. It is still a reliable technology that has allowed a country like France to register one of the lowest energy-production related emission rates in the EU without many of the large-scale disasters that have come to symbolise nuclear power to much of the world. More importantly, the technology has not reached its endpoint. One of the many expected future innovations in the technology includes the building of small modular reactors that produce less energy overall as compared to older generation nuclear reactors but also come with less safety risks and costs as compared to their full-sized cousins. All in all, it is clear that despite objections, criticisms and warnings, nuclear energy is still one of the more reliable methods of sustainably producing energy though there is a definite need to remain pragmatic regarding its dangers and limitations.

Next Story

The disposal of nuclear waste is a significant challenge due to the lack of a comprehensive solution for its harmful isotopes.

Nuclear energy is a low-carbon source of electricity that poses significant environmental and health risks, including the risk of nuclear accidents, like Fukushima and Chernobyl.

Title:

Content: As It Happens

Greenpeace opposes nuclear energy. Young climate activists say that's 'old-fashioned'

Young climate activists in Europe are calling on Greenpeace to drop its stance against nuclear energy.

Scientists say the generational divide not surprising, as nuclear disasters are distant memories for some

Young climate activists in Europe are calling on Greenpeace to drop its "old-fashioned" stance against nuclear energy.

Activists from five EU countries have launched the Dear Greenpeace campaign, asking the well-established environmental organization to get on board with what they see as a necessary tool in the fight against climate change.

"It's a message of desperation from my generation to theirs," Ia Aanstoot, an 18-year-old Swedish climate activist, told As It Happens host Nil Köksal.

"We are really, really desperate to have them in the struggle against fossil fuels. And it feels like a betrayal for them to be going up against nuclear power."

Greenpeace and other critics of nuclear power, meanwhile, say it continues to be too dangerous, polluting, and cost-prohibitive to be a viable solution to the climate crisis.

EU 'greenwashing' lawsuit

The Dear Greenpeace campaign is financed by the Belgium-based environmental non-profit Replanet, which says it does not accept financing from political parties or industries.

At the heart of the debate is whether nuclear energy should be part of the European Union's classification system for sustainable finance — a guide for private investors looking to fund green projects.

Greenpeace and several other non-profits are suing the EU Commission over nuclear's inclusion in that system, calling it "greenwashing."

"They were born from the anti-nuclear movement," Aanstoot said of Greenpeace.

For several years, Aanstoot participated in climate activist Greta Thunberg's Friday school strikes. Now she has applied to the EU Court of Justice to become an "interested party" in Greenpeace's lawsuit, so she can make her case for nuclear development.

"The EU's decisions on what is green should be based on science and being carbon neutral, and it should not be technology-biased," she said.

Greenpeace says investment money would be better spent on safer and cheaper renewable energy sources like wind and solar.

"We have the greatest respect for folks who are worried about the climate crisis and want to throw everything we have at the problem, but building new nuclear plants just isn't a viable solution. The top priority is to cut carbon emissions as fast and, ideally, as cheaply as possible, and nuclear fails on both scores," Ariadna Rodrigo, Greenpeace's EU sustainable finance campaigner, told CBC in an email.

She pointed to nuclear plant projects in the U.K. and France that are "behind schedule and billions over budget."

"The good news is that we don't need new nuclear. Solar and wind technologies are a much cheaper and quicker way to cut emissions, and with modern storage tech, 100-per-cent renewable systems are perfectly possible," Rodrigo said.

"We don't have the luxury of endless time and resources, so we should focus them on the solutions with the best chance of delivering."

Risk versus reward

Daniel Kammen — a professor of energy at the University of California, Berkeley, who studies nuclear engineering — says he's not surprised by this seeming generational divide.

"Youth who are convinced — accurately so, in my opinion — that the older generation do not appreciate the climate crisis … are saying if we're going to fight for the climate, we have to use all tools at our disposal," he told CBC.

He says the biggest nuclear disasters throughout history — Fukushima, Chernobyl, Three Mile Island — are, at best, distant memories for younger activists.

But despite what nuclear proponents say, Kammen says risk of another such disaster "is real and it's big."

"It's reasonable to be optimistic, but the deeper you look, the more sceptical one should be of every nuclear option."

M.V. Ramana — a University of British Columbia professor of disarmament, global and human security — says "the probability of these accidents is small — but it is not zero."

"Which means that as you build more and more reactors, there's a higher likelihood of more such accidents happening," he told CBC.

Waste and weapons

Ramana says nuclear energy is neither a desirable nor a viable solution to climate change.

"All nuclear plants necessarily produce radioactive waste. That's just part and parcel of the process of producing energy from a nuclear reactor, and there is nothing you can do to escape that," he said.

"We have, so far, not found any demonstrated, proven way of dealing with [this] waste safely anywhere in the world."

What's more, he says it's impossible to fully divorce nuclear energy from the possibility of nuclear arms development. The more countries that launch nuclear programs, he says, the greater the risk of nuclear weaponization.

But for Aanstoot, the cost-benefit analysis is clear.

"The climate crisis is such a greater risk to take that I feel like I'm a lot happier ladening my generation and the coming generations with the burden of managing a well-regulated, well-maintained and well-researched nuclear waste than I am with us having to deal with runaway greenhouse effects and massive climate disasters," she said.

Cost and time

But perhaps the biggest impediment to nuclear power, Ramana and Kammen say, is cost and time.

There's a reason nuclear plants have a tendency to run over time and over budget. Nuclear power is a complex process that requires massive infrastructure, specific expertise, and much-needed safeguards.

And as nuclear power gets more expensive, Kammen says wind and solar have only gotten cheaper and better.

"Every dollar you spend on nuclear power or building a nuclear reactor is a dollar that you're not spending on some other more feasible climate solutions," he said.

Aanstoot and her colleagues argue that solar and wind power alone can't generate enough power to meet the demands of an electrified future.

"We're going to need electric transport, an electrified industry and everything. We need a lot of stable electricity, and wind and solar will not cut it," she said. "And that means nuclear."

Kammen says the idea that renewable sources like solar and wind can't meet demand is "nuclear propaganda."

"Whether you do big grids with renewables, or small grids, it's reliable, it's scalable, it's cheaper," he said.

Looking to the future

There are two types of nuclear power that do have potential, says Kammen.

One is the use of modular nuclear reactors. Smaller an cheaper than traditional reactors, they're seen as a stopgap measure during a broader transition to wind and solar power. There are several in the works in Canada, but experts remain divided about their benefits

The other, Kammen says, is nuclear fusion.

Currently nuclear reactors generate energy by separating heavy atoms in a process called fission. Fusion, by contrast, forces atoms together. Unlike fission, it doesn't create radioactive byproducts, has no risk of nuclear meltdown and cannot be used to make nuclear weapons.

But it's also a process scientists are just beginning to unravel, and experts say we're decades away — at best — from putting it to practical use.

"There is absolutely no chance that anybody alive today is going to see commercial nuclear fusion energy," Ramana said.

"So it's not going to be, I think, something which we should even think about in terms of dealing with climate change. The climate problem is here and now — not in 50 years or 60 years."

Interview with Ia Aanstoot produced by Kate Swoger

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Nuclear power provides baseload low-carbon energy and on-demand load following that could be lost if removed, and high renewable penetration may require nuclear power to ensure system reliability.

Title:

Content: Against the backdrop of a global energy landscape that is evolving at an unprecedented rate, and driven by the urgent need to transition to secure and sustainable sources of power, the role of nuclear power in the energy mix and on the pathway to net-zero has seen a resurgence.

This trend is evident in the volume of policy, regulatory and financial initiatives in nations with a traditionally favourable stance toward nuclear energy, such as the US and UK, with the former’s Inflation Reduction Act (IRA) creating new incentives for nuclear generation through production and investment tax credits, and the latter’s establishment of Great British Nuclear (GBN). Similarly, even conventionally cautious nations such as Japan and South Korea are re-evaluating their previous policies, and some even reversing their plans to phase out nuclear energy.

Therefore, nuclear could assume a pivotal role in the energy transition. This significance is amplified when considering the inherent benefits of small and advanced reactors, which can provide power in remote areas and locations where the grid infrastructure is less developed or robust. They are designed to deliver not only baseload low-carbon energy but on-demand load following.

They are also projected to achieve nth-of-a-kind (NOAK) learning efficiencies earlier in a programme and development lifecycle due to their modular construction and factory build approach, and shorter build times. Small and advanced reactors also have the potential to utilise existing nuclear sites, and to co-locate with other technologies.

Nuclear could play a crucial role in the industrial sector, currently heavily reliant on fossil fuels.

Relative to renewables and storage portfolios – and outside of the baseload vs. intermittent characteristic – the above advantages are particularly noticeable at high levels of renewable penetration. Increased levels of renewable penetration will lead to a decreasing contribution of intermittent resources to system reliability, as the timing of electricity shortfalls will shift to other periods of the day and year where intermittent can't contribute. Therefore, in markets with high renewable penetration, nuclear could both complement and compete in the energy portfolios.

Nuclear could also play a crucial role in the industrial sector, which is currently heavily reliant on fossil fuels due to their low-cost and ability to generate high temperatures—attributes that renewable sources lack.

Advanced nuclear has the potential to facilitate industrial decarbonisation by providing clean, low-cost, high-temperature power, which is crucial for various chemical processes. The primary challenge, however, lies in validating and achieving the commercialisation and deployment phase of this technology. Whilst the levelised cost of electricity (LCOE) of wind and solar is attractive today, the imperative consideration remains the use case – and need – for small and advanced reactors technologies in hard-to-abate industries. Industries heavily reliant on high heat levels cannot solely rely on renewables sources for their operations.

Therefore, comparing the costs of wind, solar and nuclear does not capture the nuances of each technology: it is not as binary as often purported. Nuclear needs to be contrasted against other low-carbon technologies at the start of their cost reductions pathways. Examining the economic advantages of nuclear energy also needs to include its flexibility characteristics and ancillary services.

From a customer perspective, capturing the full ‘energy system thinking’ is vital to determine if a first-of-a-kind mover risk, and the price sensitivity that comes with it, is palatable – and, therefore, which technology and energy generation source will best enable climate change targets to be met.

Meera Kotak is associate principal at Charles River Associates

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Removing nuclear power could hinder climate change targets due to its low-carbon benefits and flexibility, and could increase reliance on fossil fuels.

Title:

Content: U.S. Energy Secretary Jennifer Granholm hinted at her support for nuclear power this week in an interview with Reuters, suggesting that California officials could reconsider closing the state’s last nuclear power plant — whose current licenses will expire by 2025. Granholm’s remarks come as nuclear power is gaining momentum in Europe, while also creating divisions among policymakers.

Mary Nichols is a senior visiting fellow at the Cornell Atkinson Center for Sustainability and a former chair of the California Air and Resources Board. Under her leadership, CARB enacted the first comprehensive cap on industrial greenhouse gas emissions by any major regulatory agency in the world. Nichols says California is on track to meet its energy needs through “an array of renewable technologies” and that reversing plans to close the state’s last nuclear plant would not be simple.

Nichols says:

“It was the owner, PG&E, that initiated the shutdown process. The plant was already uneconomical to operate and has not improved. All regulatory agency, unions and neighboring communities signed off on the plan. The process took years, and reversing it would not be a simple action.

“The plant sits in a location that blocks grid modernization and interferes with plans to develop clean, renewable resources including offshore wind. Like coal interests, the nuclear industry and its front groups will not stop searching for openings to expand its share of the energy portfolio. But California is on track to meet its current and future needs through an array of renewable technologies.”

---

Mark Lynas is a visiting fellow at the Cornell Alliance for Science and author of “Nuclear 2.0: Why a Green Future Needs Nuclear Power.” Lynas says we’re reaching a stage where anti-nuclear attitudes are in “full retreat” and that nuclear shutdowns will be both reassessed and reversed.

Lynas says:

"For too long, public opinion and scientific knowledge on nuclear power have been out of step. Scientists know that nuclear generates little waste, is one of the safest energy technologies ever invented, and can make a major contribution to decarbonizing societies in response to the climate emergency.

“I believe we are approaching a tipping point, where anti-nuclear attitudes are in full retreat, and where premature nuclear shutdowns will be reassessed and reversed in the U.S. and elsewhere.

“There is abundant evidence that where nuclear plants are retired early they are replaced by fossil fuels. Nuclear can also help balance the grid with the scaling up of intermittent renewables, making these technologies partners in the new zero-carbon energy economy."

Cornell University has dedicated television and audio studios available for media interviews supporting full HD, ISDN and web-based platforms.

- 30 –

Nuclear power is a stable and reliable source of energy, and France believes nuclear energy is necessary to achieve carbon neutrality by 2050, a potential advantage of keeping it in the grid.

Title:

Content: Nuclear research and development: sustainable investment or a “green drift ” scam?
Photo Credit: AP / Tachih Images
What we want you to know is
In the past few decades, nuclear power has already declined, but the sunset industry is now repackaging itself with “green energy ” and trying to return to the market with the image of“ climate savior. ”
Text: Ho Wai Hoon (Project Director, Centre for Greater China Studies, The Education University of Hong Kong), Lo Chin-yi (Co-Director, Centre for Greater China Studies, The Education University of Hong Kong)
At the beginning of the year 2022, nuclear energy has become the focus of international debate on energy strategy.
A few hours before the start of the New Year, the European Commission proposed a draft to classify natural gas and nuclear energy investment projects as “green investments ”, arguing that they are a means to help the transition to a future based on renewable energy and help Europe reduce carbon emissions, so they can be included in the“ Sustainable Finance Classification ” – a “Classification ” that will be introduced in 2020 to integrate environmental, social and governance factors into the investment decision-making system. Relevant economic investment and financing activities provide a set of standards, on the one hand, to promote the sustainable financial development of the market, and at the same time to eliminate the company's" green drift "behavior, is the first case of a global international organization.
Differences within the European Union
However, whether nuclear energy is “green investment ” has been divided in the EU.
In the context of the international community ’ s emphasis on sustainable development and climate change, green finance has become an important strategic tool, and proponents of nuclear energy believe that it is the most effective, stable and cheapest option to generate electricity without emitting greenhouse gases.
Under the pressure of carbon reduction, many countries need to reduce the proportion of coal and fossil fuel power generation, and nuclear power is the best alternative energy source.
As a result, France, which generates more than 70% of its electricity from nuclear power, announced last November that it would restart the construction of new nuclear reactors.
President Emmanuel Macron has stressed that nuclear energy will help France achieve its energy independence and its goal of becoming carbon neutral by 2050.
Some developing countries in Eastern Europe that are still highly dependent on coal and fossil fuels for power generation, such as Poland, Hungary, Bulgaria and Romania, are hoping to develop nuclear power in order to meet the requirements of rising electricity demand and carbon reduction, and it is clear that carbon neutrality cannot be achieved without nuclear energy.
The anti-nuclear faction, led by Germany, plus Austria, Denmark, Luxembourg and Portugal, strongly opposed the EU's proposal to include nuclear energy in the "classification law", arguing that it does not comply with the principle of "no major harm" and is only "greenwashing".
Since the 1986 Chernobyl nuclear accident and the 2011 Fukushima nuclear accident, many countries have witnessed the huge and far-reaching consequences of nuclear accidents for people and the environment, and have proposed energy policies to completely abolish nuclear energy.
In Germany, for example, after the Fukushima nuclear accident, it decided to close all nuclear power plants by 2022 and vigorously develop renewable energy.
Germany ’ s last nuclear power plants are set to close by the end of this year.
In fact, the global share of total nuclear power generation has steadily declined from nearly 20% in 1996 to 10% in 2020.
In the past few decades, nuclear power has already declined, but the sunset industry is now repackaging with “green energy ” and trying to return to the market with the image of“ climate savior ”.
The focus of the debate on nuclear energy has shifted from the most basic safety issues and how to properly dispose of nuclear waste to the agenda on climate change, energy supply security and economic impact.
Is nuclear energy worth investing in?
When we talk about nuclear energy, how can safety not be at the root of our concern?
Even if security issues are put aside first, will it solve climate change in time?
Is it really worth investing in?
One of the main reasons for the decline of the global nuclear energy industry is that it takes too long to build.
Of the 53 aircraft currently under construction around the world, the average construction time is 7 years, and 31 of them have project delays, the longest is even more than 36 years.
EDF announced this month that the construction of a new generation of nuclear power plant, which was expected to be completed by the end of this year, is being postponed to the second quarter of next year due to “yet another delay ” due to the epidemic.
Say “again ” because it has been postponed many times; the nuclear power plant started as early as 2007, when it was claimed that it could be completed in five years, and the result has been delayed for more than a decade, and it has not been finished.
The second reason why nuclear power is deterring investors is the rising cost of construction.
The estimated cost of a nuclear power plant in France was €3.3 billion, but it has since risen to almost four times, and now stands at €12.7 billion.
Thierry Breton, executive director of internal market affairs of the European Union, pointed out that from now to 2030, the existing nuclear power plants alone need 50 billion euros of investment; the new generation of nuclear power plants need 500 billion euros.
When we thought that technological progress could reduce costs, the truth turned out to be the opposite.
Investing in nuclear energy to save the planet?
As we all know, Microsoft founder Bill Gates has been obsessed with climate investment in recent years, and Breakthrough Energy Ventures, one of the founders, hopes to bring “breakthrough ” green energy technology.
He believes nuclear power is the ultimate solution to the climate problem. He has invested in Terra Power ’ s “new generation of nuclear energy ” for many years, and called on the U.S. government to invest in the“ advanced ” nuclear energy industry, “provide new funding, update relevant regulations, and show investors that it is serious. ”
Bill Gates has repeatedly applied to Congress for research funding, and has received more than $250 million in research grants from the Department of Energy.
Of course, the cost of construction of TerraPower ’ s new generation nuclear reactor is estimated to be as high as $1 billion, and congressional sponsorship is a big deal.
However, this nuclear power technology has not been successfully developed, whether it is "breakthrough" or just heard the sound of the staircase; close to the fire, looking at distant water to save, the earth can wait how many more decades?
“All investments involve risk, and the price of investment products can go up or down, or even become worthless.
Bill Gates, the business wizard, has certainly not forgotten to provide you with investment risk tips and disclaimers. He recently claimed at the SOSV “Climate Technology Summit ” that he does not need climate technology to make money, emphasizing that new technology requires a lot of investment but is not sure of a return.
So, is investing in nuclear energy really saving the planet, or is it just another “WeChat woman ” investment scam?
Editorial responsibility: Alvin
Edited by: Alex
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Nuclear power and intermittent renewables can partner in a zero-carbon energy economy.