The Next Nuclear Renaissance? Will a new wave of nuclear power projects deliver the safe and economical electricity that proponents have long predicted?

The following is an excerpt from an extensive article published recently by the CATO Institute and written by Steve Thomas, Emeritus Professor, Energy Policy, Business School, University of Greenwich and editor-in-chief of Energy Policy.

Despite a major public relations push in the media and with policymakers for new nuclear, the anticipated nuclear revival will not happen because of the fundamentals of the technology in terms of cost, construction time, and reliability. Commercial financiers will remain very reluctant to fund these projects if any of the risk falls on them. Nuclear projects also take far too long before a return on investment can begin to be earned, typically more than 15 years from investment decision to first power.

SMRs [Small Modular Reactors] will not meet their goals. For the technologies to succeed, it will not be enough for them to be cheaper than large reactors; they will have to compete with other low-carbon options such as renewables and energy efficiency measures. Gen IV designs may come along in the future, but experience suggests they are unlikely to progress to commercially available designs. Large reactor designs appear to be obsolescent. The ideas that were claimed would solve past problems were tried and failed in the previous attempted renaissance, and no new ideas to improve large reactors are emerging.

Life extension will keep nuclear capacity going for some time, although if there is an incident or accident that exposes the gap between past and current safety standards or if there is a serious equipment failure from undetected deterioration of components, the situation may change. A bigger challenge is that the older reactors get, the higher the O&M costs will tend to be. Already in the United States, life-extended reactors that are fully amortized and need only cover their O&M costs from market revenue are struggling to compete with the cheapest option, natural gas dual-cycle generation. As renewables and storage technologies continue to get cheaper, the economics of old nuclear plants will come under increased scrutiny in countries where reactors must compete in the wholesale electricity market.

Few utilities are prepared to risk their own money on new nuclear projects. In the past, investing in nuclear was not a financial risk to them because whatever costs were incurred could be passed on to consumers through regulated rates. Now, utilities that must compete in wholesale markets would be risking a large amount of their own money if they were to build new nuclear plants. New nuclear programs will have to rely on government finance, ownership, and government-imposed power purchase agreements so they are fully insulated from the wholesale electricity market. The record of utilities with nuclear experience in appraising nuclear technologies is far from good, but governments do not have the skills necessary to meet the requirements imposed by managing nuclear projects.

The mystery is why the nuclear industry retains any credibility. Throughout its history, nuclear proponents have made rosy claims about the safety and economics of the next generation of nuclear projects, but they have all gone unfulfilled. In the early years of nuclear development, claims that processes such as learning by doing, technology change, standardization, economies of scale, and economies of number would result in improved performance had an intuitive credibility. However, after repeated failures to produce the forecasted results, why are renewed claims of this type being taken seriously now? Is it simple ignorance of the past, or are there other factors that make policymakers cling to a belief in nuclear?

Why are people unwilling to consider the reason that nuclear projects fail so often is the technology itself? Instead, they fall back on old, tired excuses such as unsympathetic regulators, delays caused by local protestors, and simply not getting the right “recipe” for building nuclear power plants. In March 2025, UK Prime Minister Keir Starmer claimed:

For too long, blockers have had the upper hand in legal challenges—using our court processes to frustrate growth. We’re putting an end to this challenge culture by taking on the NIMBYs and a broken system that has slowed down our progress as a nation.

Starmer has created a taskforce to streamline safety regulation, but he has offered no evidence that the delays and cost escalation suffered at Hinkley Point C are in any way attributable to opposition or obstructive regulation—and he cannot because there is none.

The problem is not so much that money will be wasted on large numbers of uneconomic facilities. Rather, it is the opportunity costs of the time and human resources that are consumed by nuclear power and not available to other, quicker, more cost-effective and less financially risky options. We appear now to be facing serious risks from climate change, and there will not be a second chance if we fail to tackle it because too many resources are being consumed by an option—new nuclear—that will not work.

Read the full paper here.