A global shift is underway. As the world grapples with the urgent need to combat climate change, it’s clear that decarbonization is non-negotiable. Currently, a total of 133 countries are pledging net-zero emissions, aiming to limit global temperature rise to no more than 1.5 degrees above pre-industrial levels. However, fossil fuels stubbornly persist, making up approximately 80% of the world’s energy consumption, with emissions continuing to break records every year.
Meeting these ambitious climate goals necessitates a multipronged strategy, and one technology could help fill the gaps: nuclear power. It represents a tried-and-tested, zero-emission energy source that can contribute significantly to a secure, affordable, and clean energy future. It’s not just about reducing emissions, but also about powering our world in a way that is reliable and capable of meeting growing demand.
Nuclear needs to expand up to 800 GW to help provide energy resilience
Transitioning to a decarbonized energy system is no small feat. It is estimated that the U.S. alone will require an annual capital investment of approximately $1 trillion to make this happen by 2050. Renewables are undeniably a part of the solution, but uncertainties linger about their ability to grow fast enough to meet net-zero targets, not to mention their intermittent nature. Reliable base-load power will still be needed, and this is where nuclear energy comes into play.
Nuclear power contributes significantly to global energy resilience, being a source of round-the-clock, flexible power. It is a leading source of zero-carbon electricity in the United States and is a technology that’s ready to be deployed at scale, with 436 reactors already operational in 32 countries as of 2022. However, despite these advantages, the expansion of nuclear power faces significant hurdles, including public skepticism in key markets and an industry that has historically struggled with budget and timeline overruns.
The path forward demands an aggressive and innovative approach from the nuclear industry. To meet the estimated requirement of 400 to 800 GW of new nuclear capacity by 2050, it will need to be more agile, more innovative, and more competitive. This will mean overcoming a range of challenges, from financing to public perception.
To meet needs, we will require $500 billion in nuclear investments
The first step is to secure adequate financing for the sector. The transition to net-zero is the largest capital reallocation in history, and nuclear can and should make up a big piece of the puzzle. The industry may require up to $500 billion per year to support the development of new technologies and construction of new reactors.
Investments in nuclear energy have been increasing, with notable contributions from venture capital. In 2022, VCl investment in nuclear reached $1.1 billion, up from $442 million in 2021 and $100 million in 2021. It’s clear that investment in private nuclear companies will play a key role in innovative technology development.
Consider X-energy, a Small Modular Reactor (SMR) developer, which recently went public in a $2 billion deal. Or what about Westinghouse Electric, which was sold to Brookfield Renewable Partners and Cameco in a $7.9 billion deal. Or take TerraPower, a nuclear innovation company founded by Bill Gates, which announced $830 million in funding, one of the top 10 venture capital deals made in the third quarter of 2022.
Nuclear is essential for the energy transition
Nuclear energy is an indispensable player in the global energy transition. Its potential to provide reliable, zero-emission power at scale makes it a key part of the solution to the climate crisis. Overcoming the challenges that stand in its way will require concerted action and innovation, but the rewards – a secure, affordable, and clean energy future – are well worth the effort.