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The exploding global demand for energy, combined with the urgent race to reduce carbon emissions, is focusing interest and investment on the once-staid, long-stagnant nuclear industry.

A promising lineup of advanced nuclear reactor technologies and more streamlined and flexible construction techniques are getting public and private funding as nuclear is increasingly seen as a critical piece of the decarbonization puzzle.

“In order to get to our climate goals, we actually absolutely must deploy nuclear, because otherwise the only solutions left to some of those applications will be fossil solutions — natural gas, backup diesel generators,” Kathryn Huff, former assistant secretary for nuclear at the U.S. Energy Department and now a professor at the University of Illinois Urbana-Champaign, told Cipher. “We will never get to net zero without that kind of 24-7 power that nuclear provides for some of those applications.”

Indeed, in the United States, nuclear energy’s importance is the rare point in energy policy with bipartisan agreement. Both chambers of Congress have supported the development of advanced nuclear reactors and passed a pro-nuclear law earlier this year. Abroad, Russia and China have also been investing in advanced reactors.

But the enthusiasm for nuclear technology has its critics. Technology, funding, regulation and even geopolitical concerns are at play — making it unclear if next-generation nuclear will get built fast enough and at sufficient scale to have a meaningful impact in the near-term.

Nuclear’s appeal

Unlike wind and solar, which only produce power when the wind is blowing and the sun is shining, nuclear plants run 24 hours a day, seven days a week. They also generate electricity without producing greenhouse gas emissions, making them an appealing alternative to natural gas and coal power plants as a clean source of always-on power.

Four nuclear reactors at the Vogtle power plant in Georgia. The third and fourth reactors are the most recent additions to the U.S. nuclear fleet, which currently has 94 reactors across the country. Photo credit: Georgia Power Company.

That kind of reliability is needed. The U.S. is projected to consume a record 4.1 trillion kilowatt-hours of electricity in 2024, up 3% from last year, according to the U.S. Energy Information Administration.

While ultra cheap renewables, batteries and other energy storage technologies will play a crucial role in weaning the world off fossil fuels, many industry leaders argue we cannot meet the massive scale of our energy needs and decarbonize without nuclear. It is well-suited for manufacturing, hydrogen production, replacing fossil fuels in industrial processes and more.

Recently, nuclear has been singled out as an ideal match for providing the electricity needed to support energy-hungry data centers that power artificial intelligence, for example. By 2030, data centers alone could consume as much as 9.1% of annual U.S. electricity, up from about 4% today, according to non-profit research firm EPRI.

“It’s very expensive to own a data center,” Huff said. “It is even more expensive to own a data center that’s only running at 70% time.”

Some large utilities are taking a fresh look at beefing up their nuclear generation as well, including Dominion Energy and Constellation Energy, although final implementation will take time due to many economic, commercial, operational and regulatory factors.

An artist rendering of an Oklo reactor powering data centers, seen off to the back right in this picture. “We had a sense” that AI was going to be “a significant driver” for nuclear energy, Oklo’s CEO Jacob DeWitte told Cipher. “We did not appreciate, though, how much and how fast. It’s been kind of crazy to see that, actually.” Image credit: Gensler.

Steel in the ground

Despite predictions for a nuclear renaissance, the future is still uncertain. Of particular concern: nuclear is and has been historically expensive.

In November, nuclear startup NuScale announced it had pulled the plug on a project it planned to build in Utah that would’ve provided power to local community-owned public utilities. The utilities were concerned about taking on the risks of a first-of-a-kind nuclear project and the soaring cost of building the plants made the energy too expensive.

“Launching a first-of-a-kind product requires courage and public-sector support,” Marcus Nichol, executive director of new nuclear at the Nuclear Energy Institute, told Cipher.

Nichol commended Congress and the Biden Administration for their support of new nuclear to help bring costs down, which he said, “is a testament to their commitment to getting these technologies deployed.”

In early July, President Biden signed the ADVANCE Act into law, designed to support development of advanced nuclear reactors by, among other actions, directing the industry’s top watchdog, the Nuclear Regulatory Commission, to reduce license application fees and bolster staffing to speed up reviews. Other examples include $2.5 billion to support advanced reactor development via the 2021 Bipartisan Infrastructure Law and $700 million to develop a fuel supply for advanced reactors from the 2022 Inflation Reduction Act.

“We’ve had a lot of strong bipartisan support. Budgets have been phenomenal,” Michael Goff, the acting assistant secretary for the Energy Department’s Office of Nuclear Energy, told Cipher.

“We have the most resources that I’ve ever seen … on advanced nuclear right now,” he said.

This is an artist rendering of TerraPower’s Natrium power plant, which it is constructing as part of the Advanced Reactor Demonstration Project, a public-private partnership with the U.S. Energy Department. Photo credit: TerraPower.

Skepticism and concerns

Not everyone agrees federal money should go toward nuclear, however.

David Schlissel, the director of resource planning at the Institute for Energy Economics and Financial Analysis, a non-profit energy finance research organization, published a paper in May arguing that investing in nuclear, given its long development time, is less responsible right now than investing in renewables, which are cheaper and faster to build.

“The Department of Energy has … wasted tens of billions of dollars of taxpayer money” supporting nuclear, Schlissel told Cipher, although he believes it makes sense to do research on nuclear for the future.

The risk of public resistance to nuclear projects in their communities and concern over where and how to permanently store radioactive waste also persists.

The tide of public acceptance of nuclear power may be changing. In 2023, 57% of Americans report being supportive of more nuclear power plants, up from 43% of survey respondents in 2020, according to the Pew Research Center.

However, Schlissel said people may be more open to nuclear energy in the abstract than they are to having it be their neighbor. A possible key flashpoint: no permanent repository for nuclear waste exists in the U.S.

“Do you think people are going to want nuclear waste co-located in their communities?” Schlissel asked. Even if the U.S. identifies a centralized place to store spent nuclear fuel, there could be pushback. “How do you think people in small towns are going to feel about having the trucks trucking radioactive waste, like garbage trucks, going through their streets?” Schlissel asked. They are “not going like that,” he said.

There are significant hurdles for the U.S. nuclear industry to overcome financially, politically and even logistically (like how to store nuclear waste). There are also looming geopolitical risks, nuclear experts warn.

For example, if the U.S. does not establish itself as a global leader in new nuclear technologies, said Chris Levesque, CEO of TerraPower, countries such as Russia, China and France could fill in the gap with their state-owned and heavily-subsidized companies.

“We’re in an international competition,” he said.

Editor’s note: TerraPower was founded by Bill Gates, who also founded Breakthrough Energy, which supports Cipher.