Nuclear power is a controversial but essential energy source, and may enjoy a renaissance in some regions amid energy security and climate change concerns.
Actual disasters and the threat of one have made nuclear an uncomfortable energy choice, yet it still provides about 10% of global electricity supplies. Despite the risks involved, as well as the challenges in waste management and public opposition to hosting nuclear power plants in their backyards, the energy source may enjoy a renaissance in some regions as the world grapples with the twin challenges of energy security and climate change.
The war in Ukraine has roiled energy markets and upended national energy transition plans. European leaders looking for alternatives to Russian oil and gas might rely more on nuclear in the years ahead as their countries gradually shift away from fossil fuels to renewable sources. Other countries in the Middle East and Asia may also need to turn to nuclear to supplement energy supplies while they scale up green power capacity. After all, the process of splitting atoms emits little to no greenhouse gas emissions, is very cheap once the plants are built, and generates considerable energy.
It’s also important to note that today’s reactors are very different from those of the 1950s — they’re safer, increasingly scalable, and more powerful. While many years away, new innovations are underway — such as
developments in nuclear fusion — that could reinvent the way we produce and consume nuclear energy. However, future progress aside, the sustainability challenges involved in nuclear energy are significant. Waste management, water consumption, and safety considerations are critical factors that may deter investments.
Overall, we expect to see a significant increase in nuclear capacity in the coming years. China, India and to a smaller degree the US and Europe have pledged significant sums to maintain and increase output. Policymakers from these nations have also reinforced nuclear’s role in their netzero transition plans. Nuclear technology players and plant owners may therefore present an opportunity for investors to gain exposure to a segment in our global Greentech theme.
In this report we consider the current state of the global nuclear energy industry, the scope for and regional distribution of new capacity, and new technological developments. We also look at the role of nuclear power in the energy transition and the associated environmental, social, and governance (ESG) issues. Finally, we analyze the implications of renewed interest in nuclear energy for the equity, credit, commodities, and alternatives markets.
See the full report, A renaissance of nuclear energy?, published 12 April, 2022.