Wood Mackenzie believes nuclear should play a central role in decarbonisation for many countries. Under our base case, nuclear capacity expands 280 GW by 2050. Under our Global Pledges Scenario, consistent with a 2 °C warming pathway, a tripling of nuclear capacity is required. The biggest economic hurdle to the uptake of the latest nuclear and small modular reactors (SMRs) is cost.  

However, at present, nuclear is just one of a number of technologies – geothermal, green and blue hydrogen-fired power, gas or coal with carbon capture and storage, long-duration energy storage – vying to deliver reliable decarbonised electricity supply. All are expensive and need technological innovation to build a position in the market. 

For nuclear power to flourish, governments, developers and investors must work together to establish a new nuclear ecosystem, one that makes nuclear affordable and acceptable. The challenge of reshaping the future of nuclear is vast, but so is the opportunity.  

Nuclear policy is increasingly supportive

Policy is strengthening in favour of investment in conventional and emerging nuclear technologies in markets that account for more than half of global capacity.  

• North America: the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and several Department of Energy programmes have provided more than US$6 billion in public subsidies for uranium supply, operating nuclear capacity, SMR reactors and new reactor designs. 
• Canada: large-scale new builds are on hold. SMR deployment is being actively explored and GE-Hitachi’s SMR design is expected to be built in Ontario by 2028.  
• Europe: the UK has a twin-track policy to build both new pressurised water reactors (PWRs) and promote SMRs. France has added eight new reactors to its nuclear growth plans. Poland has plans for six new AP1000 reactors and is considering SMR plants. Turkey is building 4.8 GW, with an expected build time of about seven years. Romania has awarded a front-end engineering and design (FEED) contract to NuScale for the country’s first SMR power plant. 
• Asia: China is growing rapidly in terms of both existing and new technologies. Japan has approved an extension for existing nuclear reactors beyond 60 years. South Korea’s tenth electric plan targets six new reactors and makes stable power supply a top priority. In India, more than 5 GW of nuclear power is in active development, with 22 GW targeted by 2031. 

Building greater scale will depend on how fast costs fall to a level that’s competitive with other forms of generation. Wood Mackenzie’s modelling shows that if costs fall to US$120/MWh by 2030, SMRs will be competitive with PWR nuclear, gas and coal – both abated and unabated –  in some regions of the world. Further price declines between 2040 and 2050 improve the economics. This analysis incorporates our carbon price forecast for Europe of US$140/tonne in 2030 and US$177/tonne in 2050.  

What capacity levels would support lower SMR costs? Our expectation is that at least 10 to 15 projects – between 3,000 and 4,500 MW of capacity for a standard 300 MW SMR – need to be under development between 2030 and 2040. At these levels, economies of scale could be unlocked across the nuclear supply chain, based on research from the US Department of Energy. At this level of activity, the global industry would start to regain the momentum it had during the last nuclear growth phase from 1970 to 1990. By comparison, wind and solar needed 10 to 15 years, thousands of projects and continued public policy support to outcompete thermal generation. 

There are four key aspects of expanding nuclear that need greater focus:  

• Governments must lay the groundwork 

Policymakers need to set out clear rules for planning, permitting, regulation and safety; arguments that new nuclear is ‘safer’ have yet to be proved. A middle ground around permitting timelines ‒ one that allows public, industry, and government dialogue – is needed to produce predictable timescales. Incentives would need to be considered, along with regulations that include subsidies for nuclear under ‘green technologies’ – an ongoing debate in the EU that is hampering action.  

The US has developed the Civil Nuclear Credit Program and multiple tax incentives under the Inflation Reduction Act to kick-start investment. Governments could also launch competitive tenders with contracts for difference in long-term contracts for new power plants. This model successfully scaled up wind and solar in Europe without busting the public purse.  

These or similar steps will ensure that capital flows into the sector to finance growth. Policy support in the form of mandates to purchase nuclear power could also develop.  

• Expanding the uranium supply chain 

Russia’s invasion of Ukraine should be a wake-up call for the nuclear industry. Wood Mackenzie projects uranium demand to double under our base-case scenario and triple under our Paris-compliant Global Pledges Scenario. Russia is currently a key supplier to both low and highly enriched uranium markets, especially to Eastern Europe and France.  

Expanding uranium supply and processing would help promote long-term price stability and availability. Further recycling of uranium, exploring the use of plutonium recycling in civil nuclear programmes, and early-stage uranium alternatives, such as thorium, are also options to reduce nuclear waste and improve the overall efficiency of the uranium fuel cycle.   

• Developers need to establish and refine their skillset 

While many large infrastructure projects face delays and cost overruns, the nuclear industry has some of the largest overruns in the energy industry. SMRs will need to overcome nuclear’s challenging track record. No commercial, new-generation SMR plant is operating today.  

Concentrated technological learning over 10 to 15 years proved key to the dramatic cost declines in wind and solar. Nuclear will need to undergo something similar. The expertise to build nuclear plants needs to be consistently re-applied; developers should prioritise a few technologies rather than a wide array of options. This will result in greater cost savings and faster deployment over time. Knowledge will need to be localised; a global supply chain for nuclear technology is unlikely to develop due to national security concerns. A fresh generation of engineers must be trained to execute projects and operate plants. Developers must think long term, working with schools and universities to establish a pipeline of engineers to grow and sustain the industry.  

• Strong offtake agreements  

Utilities around the world want diverse options for reliable carbon abatement and, for many, nuclear will be an important part of the mix. To overcome cost concerns, offtake agreements will need to be more creative than ever. Buyers will need to place a value on nuclear’s ability to deliver stable zero-carbon power, zero-carbon process heat, nuclear-based renewable energy credits and power supply for low-carbon hydrogen. The cost of lowering carbon emissions via nuclear should be compared with other abatement options, including thermal power with carbon capture, utilisation and storage (CCUS) and direct air capture technology.