Nuclear’s Second Wind: Is Nuclear Energy the Key to the Energy Transition?
-
Insight Article 10 July 2025 10 July 2025
-
Climate change
-
Energy & Natural Resources
There is a renewed interest in nuclear power generation given surging demands for energy. As various governments pledge to commit more to nuclear energy, some have described the current climate as a nuclear renaissance.
While this new attitude to nuclear has been touted as having the potential to revolutionise the transition to clean energy, remnants of past scepticism towards nuclear power persist.
This article looks at the current state of nuclear power generation and focuses on the impact that the UK Government’s new policy statement on nuclear energy might have on the sector.
National Policy Statement for Nuclear Energy Generation
Earlier this year, the UK government published an updated draft National Policy Statement for Nuclear Energy Generation (“EN-7”).1 EN-7 emerged from a consultation which assessed the reforms that could be made to the UK’s power grid through the use of nuclear energy, though notably, it extends only to exercise of powers in England and Wales, given devolution of powers to Scottish and Northern Irish Ministers. The consultation closed in April 2025, with a final version of EN-7 expected to be laid before Parliament in Autumn 2025.
EN-7 proposed three key changes to the nuclear energy system, with the aim of bringing greater dynamism and flexibility to the nuclear power industry in England and Wales:
1. Small Modular Reactors
Small Modular Reactors (“SMRs”), a subset of Advanced Modular Reactors that have less power capacity than traditional nuclear reactors, are included alongside other large-scale nuclear reactors at power plants. This suggestion is made given SMRs, in comparison to traditional larger reactors, require less initial capital investment, offer scalability to manage growing power needs and can be more easily installed at nuclear power plants.
2. Criteria-based approach
The previous National Policy Statement (“EN-6”), imposed a strict criteria system for nuclear power plant development, identifying a set number of locations where nuclear power plants could be developed by a specified date. EN-7 encourages a less constricted development approach by allowing plant developers to select their own sites based on a specified, but less rigid, set of criteria.
3. Removal of deployment deadline
EN-7 has removed the 2025 deployment deadline that was implemented under EN-6. The UK Government cited the reason for this change as giving more flexibility to nuclear projects, in the hope that the overall development process would be expedited.
General concerns around Nuclear Energy
This is not the first time in modern history that interest in nuclear energy has spiked. The Blair and Bush administrations of the early 2000s invested substantially in nuclear but saw little return from their investment. For example, of the 30 nuclear reactors that were ordered by utility companies in the US under Bush, only four went into construction. Of those four, two were ultimately abandoned after more than $9bn had been spent on their construction. 2
Other statistics show that power generated by nuclear energy globally has been declining since the 1990s. From generating 17% of all power in the mid-1990s, only 9% of global power is generated by nuclear energy today. Although more countries have signed the COP28 Declaration to triple nuclear energy capacity by 2050, there are questions as to whether this aspiration is reasonable.
It is therefore not surprising that the proposals made under EN-7 are facing scepticism. The main hesitations are:
1. Costs
Traditional power plants are notoriously expensive to build and operate. Recent plants, such as the Vogtle reactor in the US and Hinkley Point C in the UK cost an estimated $37bn and £46bn respectively to get up and running. From this perspective, there is clearly a need for change and it is hoped that deployment of SMRs will provide this. Steps are being taken in this regard, with Rolls Royce recently being chosen as the preferred bidder to work with Great British Energy - Nuclear on its SMR solution at three sites in the UK. 3
However, as SMRs are still a relatively new technology, we have not yet seen their results in practice and so the total cost per unit can only be an estimate at this stage. Due to their modular nature, SMRs should have a lower upfront capital cost per unit as they can be mass manufactured and then installed locally on-site. This makes them cheaper to build and install than traditional reactors.4 However, some argue that the per unit cost of a small reactor will actually be higher because they lose out on the benefits of economies of scale. 5
We will, therefore, not be able to say if SMRs truly represent a low-carbon, lower-cost solution to the energy problem until their capabilities have been tested in practice.
2. Delay
When compared to other sources of renewable energy such as wind, nuclear energy takes a significant amount of time to become fully operational. Each stage of the planning and construction of a nuclear power plant takes ten years to complete, and it then takes a further ten years for the plant to break even on a carbon basis. 6
Therefore, whilst a nuclear power plant takes around 30 years to build and break even on its carbon emissions, a wind turbine would do the same in around 18 months. In this sense, nuclear energy, and specifically SMRs, should be understood as a long-term commitment to climate change, rather than a short-term solution.
3. Uranium resources
Long-term investment into nuclear energy raises questions around the suitability of current uranium extraction efforts. According to projections set out in Uranium 2024: Resources, Production and Demand (the latest edition of the uranium reference produced jointly by the OECD Nuclear Energy Agency and the International Atomic Energy Agency), there are sufficient uranium resources to power society’s growth needs through to 2050. However, there are a number of factors which may hinder uranium exploration in the future. These include stricter regulatory processes and technical difficulties in the exploration process.
As a result, and given the crucial role uranium plays in nuclear power generation, efforts should be focused to ensure that there are sufficient uranium resources in the medium term. 7
Is there potential for a nuclear middle ground?
Another issue the power grid in England and Wales faces is that of ‘dunkelflaute.’ This is a German term to describe periods when ‘the wind does not blow and the sun does not shine.’ Whilst a slightly sombre phrase, it highlights the need to find an alternative source of green energy for when unfavourable weather conditions mean wind and solar cannot provide the energy society needs.
A suggested solution to ‘dunkelflaute’ is to utilise nuclear power in parallel to other sources of renewable energy, given nuclear energy is constant and does not depend on the same external factors. Some say that SMRs are actually not needed; rather, we should aim to extend the life of old nuclear reactors which would bridge the renewable energy gap for the time being. 8
To this end, some countries have already started recommissioning their older nuclear reactors, with Japan reopening 14 plants since the Fukushima disaster in 2011. 9
What’s next?
As the world revolves more around big tech and the increasing energy requirements that come with it, governments and private companies alike are looking for a clean energy solution.
While nuclear power is an option, it remains to be seen whether policymakers will overcome the challenges that come with the nuclear power generation. We must not forget that other alternatives are also competing to balance power systems that are reliant on variable renewable generation. It may be possible that development of large-scale battery energy storage systems overtake nuclear in the shorter term. In addition, pumped hydro storage might provide other solutions although they have their own cost challenges, as the recent decision by Drax to pause its Cruachan expansion project shows. 10 However, it is likely that nuclear energy will play a key role in both domestic and global power generation moving forward.
1 National Policy Statement for nuclear energy generation, EN-7: response and new consultation
2 See The record-breaking failures of nuclear power | Beyond Nuclear International, https://on.ft.com/4jKkjOh and Utilities ditch reactors that launched U.S. nuclear renaissance | Reuters
3 Rolls-Royce SMR selected to build small modular nuclear reactors - GOV.UK
4 What are Small Modular Reactors (SMRs)? | IAEA
7 Sufficient Uranium Resources Exist, However Investments Needed to Sustain High Nuclear Energy Growth | IAEA
10 Drax confirms strong outlook, rules out participation in cap and floor scheme for Cruachan II - International Water Power
End
