Nuclear Power’s Global Comeback

[Intro] (00:00):
As electricity markets continue to face pressure to decarbonize whilst also staying reliable, nuclear power is really back at the center of the conversation once again. From long-term new build activity to life extension projects, investment activity is growing globally. But what's really driving it and where is the momentum showing up first?

Shaheen Chohan (00:42):
Welcome to Navigating the Currents of Change. I'm Shaheen Chohan and I lead Global Analytics here at Industrial Info Resources. We're a global brand in market intelligence, delivering industrial project spending data that's verified and constantly updated, and built to inform and support fact-based decisions across over a dozen of the world's most capital-intensive energy and heavy industrial sectors.
Now, joining me today are two of IIR's top experts in the global power market — Britt Burt, Senior Vice President of Research for the Power Industry, and Brock Ramey, Assistant Vice President of Power Research. Welcome, gentlemen.
Now, in this episode, we'll dive deep into the nuclear resurgence — what's being built, what's being relicensed, and how global momentum is shifting in response to global decarbonization goals, grid reliability demands, and national energy strategies. So, gentlemen, let's get to it. Britt, if I may start with you — clearly, nuclear is back on the agenda. What's driving this renewed interest in having more nuclear coming into the fuel mix?

Britt Burt (01:57):
Just the booming electricity demand around the world — it's widespread. It's across Asia, it's across Europe, and it's across the US, and being built and developed at a more rapid pace. There's a lot of incentives to encourage that. But primarily it's the data centers and industrial growth and power demand from the residential side of things that's driving the build-out of nuclear capacity.

Shaheen Chohan (02:27):
And I guess also knitting that into the general requirement and pressure for the electricity markets to decarbonize — nuclear has a pretty decent green credential, right?

Britt Burt (02:40):
Absolutely. We have to have baseload power from somewhere. And at the moment — and we've been seeing this for quite some time — it's hard to see us moving forward with the decarbonization plans that are in place without nuclear capacity playing a huge role in that.

Shaheen Chohan (02:58):
Now, I guess in the past, nuclear played a big role. But am I correct that we saw a move towards retiring nuclear over the last few years? What initially caused those fleets to be put into retirement and shut down?

Britt Burt (03:20):
Yeah, there were a number of factors. One of the big ones was the incident at Fukushima in Japan. After that, we saw a lot of countries pull away from nuclear capacity. I mean, even prior to that, Germany had committed to decommissioning their reactors by 2020, and they closed the last one back in 2023, I believe. So there was that. And that was one of the major causes. Here in the States, we saw nuclear capacity having difficulty remaining competitive with natural gas and, to some degree, even the renewable energy that was being built. So it was a business decision to close or retire a lot of those existing assets.

Shaheen Chohan (04:05):
Now, Brock, you focus very much on the North American market — in particular, what's happening in the US and Canada. Similar to how the momentum of capital spending was driven in renewables by a lot of very supportive tax credits — are we seeing similar support mechanisms coming from the Trump administration that could help push new nuclear going forward?

Brock Ramey (04:34):
Construction is being pulled back, but an exemption through this bill, if it's going to continue, includes tax credits for nuclear restarts as well as uprates and capital project spending.

Shaheen Chohan (04:54):
So just to get some definition around restarts — this would be a tax incentive for units which have been idled and are offline, to bring those back on. Correct?

Brock Ramey (05:00):
Correct. And as far as restarts go, I mean, we're tracking a number of them here. The Palisades plant should restart this year. NextEra is looking at restarting the Duane Arnold facility in Iowa. And Santee Cooper is considering selecting an outside party to come in and complete the units at V.C. Summer that were stalled back in 2017. So a lot of activity in that area.

Shaheen Chohan (05:34):
And in terms of activity associated with capital spend — we know it's a restart project, but what is the activity that happens at these restarts?

Brock Ramey (05:45):
So they have to go through and revamp all the balance of plant. They have to re-inspect and revalidate the certification for the reactor. And a lot of times they're going in and completely revamping the steam turbine or the powerhouse piece of it — whether it's replacing rotors and major components. So it's a major capital spend for these. Some of them are half a billion dollars or more.

Shaheen Chohan (06:16):
Licensing and permitting has always been a big challenge for all power generation plants, specifically nuclear. The licensing process is complex. Has there been any improvement or adjustments to US licensing?

Brock Ramey (06:31):
President Trump signed some executive orders in May. One of those is to shorten the licensing program by about 18 months. And I do believe that's going to be quite beneficial for the development here in the United States and in North America.

Shaheen Chohan (06:49):
And is that adjustment for new-build capacity, or is it also for relicensing?

Brock Ramey (06:56):
It is for both.

Shaheen Chohan (06:59):
Both. Now, Britt — obviously positive momentum for the US and coming from government support. Are we seeing any other supportive policy in other parts of the world, most notably Europe? Europe's a big nuclear market.

Britt Burt (07:11):
Well, it is. As I mentioned earlier, there are 40 countries that have created or are implementing favorable plans to move forward to more nuclear capacity. And 20 countries have signed on to agree to triple nuclear capacity by 2050. So yes, we're seeing — and these incentives come in multiple ways. We've talked about production tax credits, investment tax credits and things of that nature. But there's also loan guarantees and direct financing and low-interest loans, depending on the country we're talking about, that are being put into place to encourage growth in the nuclear sector.

Shaheen Chohan (08:02):
So outside of Europe, are you seeing any higher levels of capital spending in other geographies? Where are we seeing that?

Britt Burt (08:08):
Asia. Across Asia — certainly in China and India, that goes without saying, but also Indonesia. We're seeing more development there — a quite aggressive plan in Indonesia that we're seeing. You mentioned Europe — yeah, it's widespread in Europe. Latin America as well. So it's worldwide.

Shaheen Chohan (08:36):
Looking particularly at Europe, Brock — are there any particular countries within Europe that are maybe bringing nuclear into the mix, possibly for the first time?

Brock Ramey (08:43):
What we're seeing is in Italy and Denmark, they're easing their ban on nuclear. And then in Spain they are extending some of the operational timeframes of their fleet there. Another — I mentioned Germany earlier. Germany has closed down their nuclear reactors, but they've ended their opposition to others in the EU progressing forward with developing nuclear capacity. At one point, they were opposing the plans that France has for expanding nuclear capacity, and they've kind of backed away from that.

Shaheen Chohan (09:21):
Okay, I want to come back to this — we really can't ignore it. The fact that these projects are both complex, they're large, and they have a long lead time. Are we seeing a shift in the types of nuclear technology being used? In the heyday, it was ten years to build a project, multiples of billions of dollars. Are we now seeing a different type of capacity being brought to market?

Britt Burt (09:43):
Yes. Well, we expect small modular reactors — and there are multiple designs of smaller SMRs. We see multiple designs of those. And I think longer term we're going to see SMRs dominate the nuclear capacity because they can be used not only for power generation, but for supplying heat. I think one thing that's overlooked sometimes is they can also produce hydrogen from nuclear power. So the more we move into the hydrogen economy, I think we may see sites being built for that. We're still seeing conventional reactors being built around the world, including some on the horizon for the US by the way. But over the long term, I believe SMRs will dominate what we see moving forward.

Shaheen Chohan (10:41):
And I think we just saw an announcement from the state of New York very, very recently. Right?

Brock Ramey (10:43):
Yes. Governor Hochul in New York has directed the New York Power Authority to move forward with developing at least a gigawatt of nuclear capacity in upstate New York. And we believe it's going to be conventional reactors, but there could be some SMRs there as well.

Shaheen Chohan (11:02):
It looks like SMR is going to be the path forward to bringing nuclear back into the mix a little bit more. Just talk a little bit about the benefits of that — are they cheaper, they're small, smaller capacity. And do they bring them to market quicker?

Britt Burt (11:16):
They're smaller in capacity. We believe eventually there will be cost advantages to those — right now we're really not seeing that, but I think down the road with further development, we'll see cost advantages and they'll be quicker to build. These are units that are fabricated in a facility and then assembled in the field in modular pieces. So the idea being they're quicker to build, safer, and produce less nuclear waste. And Brock mentioned the executive orders by Donald Trump — one of those dealt with recycling and reusing used nuclear fuel as well, which is a huge step forward for the US because we have not done that. We've seen it done in France and Japan and maybe some other places, but not the US.

Shaheen Chohan (12:13):
So guys, if we're seeing SMRs being able to be deployed quicker, cheaper and in a shorter timeframe — do you think there is a potential for new nuclear capacity to possibly displace the need for some of the other renewable fuels, such as wind and solar?

Britt Burt (12:36):
I'll give my take on this and Brock, you're welcome to add to it. I think we're going to continue to see renewable power being built, but we have to have baseload power. And so we're closing coal units down around the world — we continue to do that. Not every region of the world has the availability of natural gas like we do here in the US. So nuclear capacity makes sense as a baseload capacity.

Brock Ramey (13:01):
I would agree. So we think that baseload capacity — as we see more coal coming offline — could actually be supplanted. It used to be just natural gas. Right now, it could actually be these small modular reactors bringing nuclear into that, filling that gap.

Shaheen Chohan (13:19):
Very correct. Britt, there's obviously a very large operational fleet in existence around the world, and there's obviously a lot of relicensing that has already been approved — and a lot more still in the approval pipeline. I guess we'll see some stability in the volume of operational nuclear fleets out there, but also some new fleets coming to market. I guess that should support a lot of future in-plant capital spending going forward. Can you explain to folks what a lot of that in-plant CapEx is typically associated with?

Britt Burt (13:59):
Sure. Well, nuclear capacity supplies between 9 and 10% of the world's electricity — that equates to about 392GW. So we have that out there existing, and a lot of that, as they extend their licensing, they will do modernizations and life extension programs. And many times this leads to things like — for pressurized water reactors — replacement of steam generators, which are very large projects. We also see upgrading projects where they take an existing steam turbine and increase the capacity of that unit by about 15 or 20%, by doing some major modifications to those machines. Those are the major ones that we see. And Brock, I believe that we're seeing a lot of that take place here in the US, aren't we?

Brock Ramey (14:55):
We are. We're seeing a number of those coming about, because there is a lot of new additional relicensing coming through to keep operational fleets online. So we're seeing that bulk of new CapEx coming through. Yes, that is what's driving it.

Shaheen Chohan (15:14):
Okay, Brock, I just want to stay with you just for a second. I do want to come back to the small modular reactors. Do you expect to see more behind-the-meter usage and certainly an increase in integration of SMRs?

Brock Ramey (15:26):
Yes. We've seen numerous announcements with the integration of SMRs behind the meter. Here in the US, we've seen Amazon, Google, Microsoft talk about that — but not only here in the US, we do see this integration of SMRs globally. And we do believe that will continue — that integration will increase.

Shaheen Chohan (15:52):
So nuclear to support electricity demand — is data centers the primary driver?

Brock Ramey (15:58):
Yes, yes. And for national security here in the US, there's talk about adding more of them for military bases so that they have their own on-site power generation from nuclear capacity. But certainly the data centers is a big driver, hands down.

Shaheen Chohan (16:16):
And you know, you and I talk often on our global outlooks about the growing demand for electricity worldwide. If you look at the Middle East, or Southeast Asia, or Africa — areas that have power demand that's just growing tremendously — they're being considered for that as well.
I guess that electricity demand — as you said, in these Asian markets, rapid population growth, scaling of their industrial and manufacturing capacity — that's a really strong motivator for possibly considering adding this new baseload power provision into those Asian markets, especially if we could do it with small modular reactors, which are smaller, more cost-effective and quicker to deploy.

Britt Burt (17:07):
Right, right, exactly.

Shaheen Chohan (17:09):
So, gentlemen, that brings us, I think, to the conclusion of the podcast. Really big thanks. I think certainly this is an area that we're going to probably have more conversations with going forward in the future. Thank you, gentlemen, for sharing your insights and your perspectives today. Folks, if any of you have got any questions about any of the points discussed today, then please do reach out to myself, Britt or Brock via the contact details that you can see here. Finally, a big thanks to all of you who've taken time out to join us today. I hope we have helped you all better navigate some of the currents of change that we are seeing.