More than 20 countries, including the US, Japan, and the UK, pledged at COP28 to triple nuclear power capacity by 2050 to meet net-zero carbon emission targets. The International Energy Agency (IEA) suggests that global nuclear power capacity needs to more than double to 916 gigawatts by 2050. The UK, for example, aims for nuclear to supply about a quarter of its electricity by 2050, up from 14% currently. This push is driven by increased power demand from data centers and the pursuit of energy sovereignty, with Morgan Stanley predicting $2.2 trillion in nuclear value chain investments by 2050.
However, these ambitions are hampered by persistent issues of cost overruns and project delays, making nuclear power less competitive than other low-carbon technologies like wind and solar. For instance, France's EDF is building the Hinkley Point C plant in England, which is now projected to cost up to $46 billion and be delayed until 2029, significantly exceeding its initial $18 billion budget and 2025 completion date. Similarly, the Vogtle plant expansion in the US is seven years late and $17 billion over its original $14 billion price tag.
The cost of building new large nuclear plants in advanced economies like the US, France, and the UK ranges from $150 to $200 per megawatt-hour, substantially higher than the $50 to $60 per megawatt-hour for solar and onshore wind. While the IEA believes future European nuclear plants could achieve costs of around $100 per megawatt-hour, making them complementary to wind and solar, the industry needs to consistently deliver projects on time and within budget to compete effectively. Strong political support can mitigate the impact of cost overruns, but it doesn't attract the necessary investment to drive down costs.
The US aims to quadruple its atomic energy capacity by 2050, involving potentially hundreds of new plants, and secured an $80 billion partnership for eight large-scale reactors. Private investment in smaller modular reactors (SMRs) reached a record $3 billion last year, with Amazon investing in a developer planning 144 SMRs. Despite this, critics like Edwin Lyman of the Union of Concerned Scientists argue that nuclear power remains more expensive and carries accident risks, questioning the viability of a "nuclear renaissance" given past failures like Vogtle 3 and 4, which were $18 billion over budget and caused consumer electric bills to rise by over $500 annually.
Analysts are skeptical about replicating cost reductions seen in China due to differing regulatory and financing models in the US. Without government-backed overrun insurance, utilities may be hesitant to invest in new projects. Experts like Julien Dumoulin-Smith of Jefferies highlight that nuclear has among the highest energy costs due to large upfront capital, making it less attractive amidst public affordability concerns. Achieving ambitious targets like quadrupling US nuclear capacity by 2050 is seen as highly improbable due to the protracted construction times and high costs involved.
